- BPFI launches second phase of Dealing With Debt campaign to highlight new and existing supports for concerned mortgage customers
- Credit Servicing Firms and MABS collaborate on expansion of streamlined customer engagement framework
- Initial eligibility criteria agreed by main lenders for customers of credit servicing firms seeking to switch their home mortgage
Wednesday 6th September 2023 – Banking & Payments Federation Ireland (BPFI) has today launched the second phase of its Dealing With Debt campaign to highlight new and existing supports available for mortgage customers who may be experiencing financial difficulties in light of the continued cost of living pressures and recent increase in interest rates.
The information campaign aims to ensure concerned mortgage customers are fully aware of the assistance and range of options available to them and is also appealing to borrowers to contact their provider as soon as possible if they are struggling to meet their mortgage or other repayments.
Central to the campaign, which includes substantial national and local advertising, is the comprehensive online resource DealingWithDebt.ie. This provides in-depth information on how lenders will work with customers who are at risk of missing a repayment or are already behind on their repayments, the full range of tailored repayment solutions available for borrowers in difficulty, and the best actions customers can take if they are under financial strain. It also sets out the key contacts for all lenders and credit servicing firms in addition to independent consumer support bodies.
Credit Servicing Firms and MABS collaborate on streamlined customer engagement framework
Among the new supports announced by the industry today, Credit Servicing Firms are working closely with the Money Advice and Budgeting Service (MABS) on a streamlined customer engagement framework to accelerate the agreement of sustainable repayment plans for customers in financial difficulty. The framework, which is already being successfully implemented by Pepper Advantage Ireland, centres on bi-weekly forums with MABS regional offices to discuss individual cases and affordable and sustainable solutions for customers who are struggling to meet their mortgage repayments. It also involves an escalation process for cases which are particularly sensitive. The introduction of this model at Pepper has led to a significant improvement in the shared understanding, by all parties, of workable solutions for customers which has resulted in the acceleration of resolutions for borrowers. The remaining Credit Servicing Firms are now engaging with MABS on the expansion of this initiative across the industry.
Initial eligibility criteria agreed by main lenders for customers of credit servicing firms seeking to switch their home mortgage
In addition, lenders AIB, Bank of Ireland, Permanent TSB, Avant Money, Finance Ireland and ICS Mortgages have agreed initial eligibility criteria to provide clear guidelines for home mortgage customers of Credit Servicing Firms who are seeking to switch their mortgage. Credit Servicing Firms have committed to working with these criteria to support customers switching and to ensure they are aware that they may have options to switch their mortgage. The main mortgage broker representative bodies, Brokers Ireland and the Association of Irish Mortgage Advisors, have also agreed to communicate these criteria to borrowers seeking to switch their home loans.
In order to be eligible to switch under these guidelines, customers need to be making full capital and interest repayments on their mortgage. In addition, customers must have no arrears on their home mortgage or any other lending in the past two years. Once customers meet these and other initial criteria*, applications will be assessed on a case-by-case basis in line with individual lender credit policy.
Additional supports for customers of credit servicing firms who wish to discuss their mortgage switching options
The three retail banks AIB, Bank of Ireland and Permanent TSB have put in place dedicated phone numbers for customers of Credit Servicing Firms who wish to better understand and discuss their options for switching. Open from today, the lines are backed by specialist support teams who can talk potential switchers through the options. Avant Money, Finance Ireland and ICS Mortgages also have teams in place to deal with any queries from customers looking to switch. Alternatively customers may also wish to talk to a mortgage broker for advice on their options via Brokers Ireland (brokersireland.ie) and the Association of Irish Mortgage Advisors (aima.ie).
To support homeowners who may be unsure if they are eligible to switch, BPFI has published an information leaflet (available here) which outlines for customers the various elements of the agreed initial criteria that will be taken into account during the switching application process. The leaflet also details the dedicated phonelines for each of the banks which customers can contact to discuss their options.
Speaking on today’s announcement, Brian Hayes, Chief Executive, BPFI said: “As we launch the second phase of our Dealing With Debt campaign today BPFI and its members are acutely aware of the difficulties being faced right now by many customers in light of the continued cost of living and interest rate pressures. This issue was very much at the heart of last week’s round table meeting between the Minister for Finance, Michael McGrath TD and senior representatives from across the industry.
“The principal aim of our campaign is to make sure that anyone who is worried or struggling with their mortgage or other loan repayments knows there is help available from their provider including a wide range of short and long-term repayment solutions which can be tailored to each borrower’s circumstances. These can include, for example, interest only repayments, where you just pay the interest on your mortgage for an agreed time, reduced payments, where you pay less than the full amount for an agreed period or extending the term of the mortgage which reduces the monthly repayments.”
“It is important to emphasise that the supports which are available from providers apply to those who may already have missed a repayment as well as to those customers whose payments are fully up to date but feeling under financial pressure. Our key message today is that the most important thing you can do is to contact your mortgage lender or financial services provider as soon as possible or indeed a trusted third party such as MABS among others. As a starting point we are urging customers to go to our DealingWithDebt.ie website where they will find a range of practical information. This ranges from an explanation of the various repayment options available to how to contact their provider or where to seek independent advice.”
Mr Hayes continued: “Also of significance today are the additional measures announced in respect of customers of credit servicing firms. This includes work underway on a streamlined customer engagement framework between Credit Servicing Firms and MABS which is proving hugely beneficial for customers of Pepper, where it is already operational, and where workable solutions are now being put in place more quickly. Furthermore, mortgage lenders have today set out initial eligibility criteria for customers of credit servicing firms seeking to switch their home mortgage. While we acknowledge not all customers will be eligible to switch due to their individual circumstances, our key objective today is to provide clarity on the initial required criteria to switch. If customers of Credit Servicing Firms wish to explore their switching options, we encourage them to consider their individual circumstances against the initial eligibility criteria and, if they feel they meet them, to contact our retail banking members via their dedicated phonelines to discuss their options further. BPFI has also published an information leaflet which will be useful to borrowers in helping them understand the requirements which can be found on our website DealingWithDebt.ie.”
*The initial criteria agreed by the main lenders are as follows:
- Customers must be repaying capital and interest on the full outstanding mortgage i.e. there is no split/warehoused element of the mortgage, and the mortgage is fully up to date
- The customers’ credit history, i.e. their Central Credit Register (CCR) record, must show a clean repayment track record without arrears for at least the past two years.
- Customers must be able to demonstrate that they have sustainable income which is adequate to repay the mortgage in full over the lifetime of the loan.
- Customers must have a satisfactory bank account performance i.e. no unpaid items such as a direct debit or standing order and all the customers’ other loans/debts must be up to date.
- The current Loan-to-value (LTV) of the mortgage must be less than 90%
- The circumstances that gave rise to any previous financial difficulty must have been resolved.
Once customers meet these initial criteria, applications will be assessed on a case-by-case basis in line with individual lender credit policy.
The dedicated phonelines for customers of credit servicing firms who wish to discuss their mortgage switching options are as follows:
- AIB – 0818 303 035 or visit Mortgage Switcher |AIB
- Bank of Ireland – 0818 200 390 or visit Thinking of Switching? | Mortgages | Bank of Ireland
- Permanent TSB – 0818 210 585 or visit Switching from another financial service provider (permanenttsb.ie)
Note: Banking & Payments Federation Ireland (BPFI) represents the banking, payments and fintech sector in Ireland. Together with its affiliates, the Federation of International Banks in Ireland, and the Fintech & Payments Association of Ireland, BPFI has over 125 member institutions and associates, including licensed domestic and foreign banks and institutions operating in the financial marketplace here.