The Central Bank has published changes to its guidelines aimed at protecting mortgage holders facing arrears.
A new provision prevents banks can from imposing arrears charges or extra interest on people who are in arrears, but are co-operating with the new Mortgage Arrears Resolution Process (MARP) with effect from January 1.
The MARP is a framework which must be developed by all lenders to handle cases where home-owners are struggling with repayments.
The Central Bank says the changes to the Code of Conduct on Mortgage Arrears have been made following the recommendations of a Government expert group. The code will apply to mortgage lenders from January 1.
Among other changes, the code will now apply to people who tell banks that they could be at risk of falling into arrears. The revised code also puts limits on the number of unsolicited communications banks can make with mortgage holders in difficulty. The code also prevents lenders from forcing people in arrears to change from a tracker mortgage to another mortgage type.
Borrowers can also appeal decisions by banks on their cases to an internal appeals board which banks must set up. Independent brokers' group PIBA said that while the overall code was positive, the appeals process lacked independence.
Irish Mortgage Corporation director Frank Conway said the new code represented a much more pragmatic approach to help mortgage holders who were financially vulnerable. He particularly welcomed the plan to cater for mortgage holders who were not currently in arrears but were at risk.
