Code of Conduct on Mortgage Arrears (CCMA)

The Central Bank's Code of Conduct on Mortgage Arrears (pdf) is the main code of relevance to people whose mortgage is in arrears or in danger of slipping into arrears. It requires lenders to wait 12 months before taking legal action about mortgages in arrears. However, this requirement does not apply if a borrower is deliberately not engaging with the lender.

The CCMA requires mortgage lenders to adopt specific procedures when dealing with borrowers experiencing arrears and financial difficulties. Such procedures must be aimed at helping you as far as possible in your own particular circumstances.

Recent developments: The Central Bank has published a consultation paper (pdf) on proposed revisions to the CCMA. It will issue a revised version of the Code, based on the outcomes of the consultation, by the end of May 2013. In the interim, it has published clarifications and interpretations of some provisions of the CCMA as it stands – see “Clarifications of CCMA” below.

Read more in the press release about the CCMA consultation and the Central Bank’s detailed mortgage arrears resolution targets (pdf).

Scope of CCMA

The CCMA applies to mortgages on primary residences only. It defines primary residence to include “a residential property in this State which is the only residential property owned by the borrower” as well as the more common definition of “the residential property which the borrower occupies as his/her primary residence in this State” (your main home).

The purpose of this wider definition is to apply the protections of the CCMA to people who are trying to maximise their income to help pay the mortgage on their main residence/home, whether or not they actually live in it.

The Code also covers borrowers in pre-arrears. It defines pre-arrears as follows: "A pre-arrears case arises where the borrower contacts the lender to inform them that he/she is in danger of going into financial difficulties and/or is concerned about going into mortgage arrears".

The CCMA applies to all mortgage lenders operating in the State, apart from credit unions and local authorities (see ‘Local authority loans’ below).

Requirements of CCMA

The CCMA sets out the framework that lenders must use when dealing with borrowers in mortgage arrears or in pre-arrears. It requires lenders to handle all such cases sympathetically and positively, with the objective at all times of helping people to meet their mortgage obligations.

Under the CCMA, lenders must have the following:

• A Mortgage Arrears Resolution Process (MARP) to be used when dealing with arrears and pre-arrears customers. The 5 steps for the MARP are:
  1. Communication
  2. Financial information
  3. Assessment
  4. Resolution and
  5. Appeals
  Read more about the Mortgage Arrears Resolution Process
• An Arrears Support Unit (ASU) to assess arrears and pre-arrears cases
• An internal Appeals Board to consider appeals from borrowers in relation to ASU decisions and the lender’s treatment of the borrower’s case under the MARP.

Lenders must also:

• Ensure that communications with borrowers are presented in a clear and consumer-friendly manner
• Make an information booklet available to borrowers in arrears (or pre-arrears) including details on the MARP, relevant contact points for arrears issues and details of websites with mortgage arrears information, such as mabs.ie and keepingyourhome.ie
• Provide a dedicated section on their website for borrowers who are in or facing financial difficulties. This section must include the above booklet and links to the above websites.
• Ensure that the level of contact and communications from them, or from any third party acting on their behalf, is proportionate and not excessive
• Wait at least 12 months before applying to the courts to commence legal action for repossession of a property (this does not apply if the borrower is not co-operating with the lender).

Lenders must not:

• Initiate more than 3 unsolicited communications with a borrower, by whatever means, in a calendar month, other than correspondence required by the CCMA or other regulatory requirements – but see “Clarifications of CCMA” below
• Require a borrower to change from an existing tracker mortgage to another mortgage type, as part of an alternative arrangement offered to the borrower in arrears or pre-arrears.

In general, if you feel that your mortgage lender has failed to follow the CCMA, and if you have exhausted the appeals process, you can complain to the Financial Services Ombudsman

However, since 7 February 2013, the Financial Services Ombudsman cannot pursue complaints against the Irish Bank Resolution Corporation (IBRC) without the consent of the High Court.

The Central Bank has published a booklet for consumers Mortgage Arrears – A Consumer Guide to Dealing with your Lender (pdf) along with a set of FAQs (pdf).

The Free Legal Advice Centres (FLAC) have published a guide to the CCMA (pdf).

Clarifications of CCMA

The Central Bank has published 2 documents which clarify the provisions ofthe CCMA. They are a set of interpretations on contact provisions (pdf) and a set of clarifications on contact and other issues (pdf). The contact provisions of the Consumer Protection Code 2012 (see below) are also clarified.