The Central Bank wants lenders to make it easy for people to switch mortgages
It also wants banks to work together to help consumers switch.
THE CENTRAL BANK wants to introduce new rules that would make it easier for customers to switch mortgages.
This comes after the tracker mortgage scandal in which thousands of people who were entitled to a tracker interest rate on their mortgage were denied a right to one, or denied the option of one.
The exact number of people affected and the total amount of money taken from homeowners is currently under review and is expected to be completed by the autumn.
The Central Bank said today that many consumers who have switched mortgages had a positive experience, and that borrowers can save significant sums of money by switching.
It said that it will publish a consultation paper in the third quarter of the year proposing additional measures to facilitate mortgage switching for those consumers minded to switch.
Proposals that the Central Bank will explore will include:
- Lenders should provide greater clarity to consumers on the switching process itself, timeframes and potential costs of switching.
- New disclosure rules at trigger points in the mortgage life cycle, such as at the end of a fixed interest-rate term.
- The scope for increased co-operation amongst lenders during the mortgage switching process.
Governor of the Central Bank of Ireland and Member of the Governing Council of the European Central Bank Professor Philip Lane.
This comes after the Central Bank governor Philip Lane answered questions last week about how they regulate the banks following the tracker mortgage scandal.
In the Finance Committee today, Central Bank governor Philip Lane said that there was a “systematic and widespread aspect” to the tracker mortgage scandal.
It does require comprehensive approach; there was a cultural issue that was in favour of the lender and not in favour of the customers.
He also said that lenders should “never have been as aggressive as they were in terms of how they viewed these contracts”.
Why the research?
The research published today seeks to gain a better understanding of consumers’ perceptions, attitudes and experience of mortgage switching.
In addition to the consumer research, the Central Bank also conducted research amongst lenders, mortgage intermediaries and law firms in order to gain insights into their views of the mortgage-switching process.
Acting deputy governor of the Central Bank Bernard Sheridan said:
“It is clear that lenders could be doing more to facilitate consumers who are thinking about switching, be that switching to another lender or to another mortgage product with the same lender.
Lenders need, therefore, to examine these findings carefully.
“The Central Bank will progress its work in this area by publishing a consultation paper later this year which will set out proposed measures to help any consumer who is considering switching.”
Written by Gráinne Ní Aodha and posted on TheJournal.ie
