THE ONE-YEAR moratorium on house repossessions which the State’s banks agreed to last year will not be automatically rolled over under proposals to be unveiled by the Financial Regulator tomorrow.
Under the proposed changes to its statutory code, the Financial Regular will recommend that the moratorium should be extended beyond the initial 12 months only when a homeowner meets repayments agreed with their lender after a debt resolution process begins.
Under the new code, lenders will introduce an agreed mortgage-arrears resolution process and homeowners who enter the process will be able to agree new repayment terms with banks and building societies and benefit from a one-year moratorium on home repossession.
“As long as homeowners are meeting payments agreed under the new process, then the moratorium will roll over but it is based on people meeting those agreed commitments. It will not give people free rein to renege on repayments,” a source within the regulator’s office told The Irish Times.
When the new system allowing homeowners with mortgage arrears to agree new repayment terms was announced last month, Financial Regulator Matthew Elderfield committed to producing proposals for an updated statutory code before the end of August.
The proposals are likely to incorporate much of the code agreed last month and will put forward a number of new proposals.
Under the code, banks and building societies cannot charge those involved in a resolution process extra interest or penalties and they are prohibited from changing the terms of low-interest tracker mortgages to increase repayments.
