James Fitzsimons: Code of conduct gets it wrong yet again on arrears
The banks are still not offering sustainable solutions to those in mortgage trouble.
THE publication last week of the Central Bank's new Code of Conduct on Mortgage Arrears could have cleared the way for those in financial distress to get back on track. When it changed the forbearance period from 12 months to eight, it labelled the majority as "not co-operating" and sent a message to the banks to repossess, so that it can keep our paymasters in Europe happy. Those who were coming around have been forced back into their shells. Now it is guaranteed they won't achieve their targets.
The new code is full of holes and they need to go back to the drawing board. It would have worked if it had given everyone a clean slate from which to start. Whether they are in arrears for three months or three years, the clock should start now. Nobody should be branded as not co-operating, provided they engage with their lender now. After all, it took five years to come up with the personal insolvency arrangements and even that is not ready.
The system isn't working because the banks are not offering sustainable solutions and those in arrears cannot see it working for them. It's no surprise that the system has got it wrong again, but it's a pity it can't get it right even once. What calibre of expert is guiding them? Maybe the banks will see where it is going wrong and use common sense to achieve what we need. They must be frustrated too.