Consumer protection concerns for IBRC mortgagesMonday 10 February 2014 23.49
People with Irish Bank Resolution Corporation mortgages are raising concerns that they could lose out on consumer protection when their loans are sold.
Liquidators KPMG are selling 13,250 loans originally issued by Irish Nationwide.
Half of the mortgages are in arrears.
If the loans are bought by an unregulated fund, the purchaser will not have to comply with the Central Bank's code of conduct on mortgage arrears.
In a statement the Department of Finance said the continuing applicability of the code will depend on who buys the portfolio of loans.
“The outcome of the sales process will determine if a solution is required. For example, in the event that Nama acquires the loan books, Nama is likely to apply best practice in this regard and no borrower will in any worse position."
The department said it has been instructed by the minister to examine the issue with the Central Bank, “with a view to bringing forward a solution.”
In a letter seen by RTÉ's Prime Time, the Central Bank told the department and liquidators it wanted any sale to result in "a continuity of borrower protections" under statutory codes.
It said it wanted any purchaser to have "policies, procedures, systems and control checks to appropriately" manage the mortgages.
It said this is "particularly relevant" for borrowers in arrears.
However, the liquidators said in a statement that the code was "voluntary and are not legally binding".
However, they added that buyers of the mortgage portfolios would have to honour "legal agreements" with borrowers.
Read David Murphy's blog: Irish Nationwide mortgage holders not getting a fair deal
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