Start gets behind MABS deal to protect struggling mortgage holders
Start is behind MABS deal to protect struggling mortgage holders
SPECIALIST mortgage lender Start said yesterday it was open to signing up to a new code which gives breathing space to customers who default on debts.
Twelve of the country's leading banks promised earlier this week to avoid taking legal action against customers who default on their debts.
This promise applies provided customers make genuine attempts at some form of repayment.
The deal was brokered between State-supported advisory service MABS (Money Advice and Budgeting Service) and the Irish Banking Federation.
Chief executive of Start Mortgages David Ingram said it had only learned about the protocols when details were published.
"Since learning of the protocol, we have reviewed it and we believe that our current policies and procedures are in line with those described in it," he said.
Mr Ingram said that for some time Start Mortgages had worked very closely with MABS to assist struggling consumers to manage their debt in order to formulate mutually acceptable, affordable and sustainable repayment plans similar to those recommended in the protocol.
He said that it was his understanding that the protocol had been developed over a two-year period. He added that the inclusion of all consumer lenders would have been in the best interests of consumers.
"We cannot understand why we were not, at any stage, included in these discussions."
The Start Mortgages boss said his firm fully supports the work of MABS.
Criticised
Launching the new code last Wednesday, Minister for Social and Family Affairs Mary Hanafin criticised the fact that lenders such as Start Mortgages had not signed up to it.
She said specialist lenders have a "moral obligation" to sign up for the code which commits banks to work with people with loan arrears rather than forcing them before the courts.
Specialist or subprime lenders provide loans and mortgages to people with poor credit histories but they charge sky-high interest rates.
Ms Hanafin said: "Subprime lenders are the people that every time you turned on your computer in the last while it flashed up asking you if you wanted a mortgage or a loan."
The new code would mean anyone with debts who engaged with lenders in a meaningful way would avoid a court summons.
Under the terms of the new code, lenders have committed to working with MABS advisers to resolve debt problems.
Those lenders that have signed up for the code said they recognise some people may not be able to repay all of the outstanding amount.
There will be no legal action, or an existing legal action will be suspended, if a repayment plan has been agreed. However, lenders have reserved the right to force the repayment of a loan and ignore the protocol.
The MABS protocol will become fully operational on September 28.
- Charlie Weston Personal Finance Editor
