Central Bank to review practice of lenders adding legal fees to arrears

Central BankThe Central Bank of Ireland has announced it will review the practice of lenders adding legal fees to the mortgage arrears accounts of homeowners involved in repossession cases.

Doubts have been raised over whether the practice is compliant with the Bank’s Code of Conduct on Mortgage Arrears (CCMA) and the Consumer Protection Code (CPC), among other regulations.

The Central Bank has confirmed that it is now “examining the reported practice”, The Irish Times reports.

In a statement, the Bank added: “The Central Bank continues to encourage any borrowers who are in, or at risk of, financial difficulty to engage with their lender to ensure they receive the full protections of the statutory code of conduct on mortgage arrears.

“This includes a restriction on lenders from imposing charges and/or surcharge interest on arrears arising on a mortgage account in arrears, unless the borrower is not co-operating.

“Where a borrower doesn’t engage and is deemed as not co-operating, they will no longer be protected by the CCMA.”

Related posts