Deputy Daly was responding to reports today that banks are issuing letters to distressed mortgage owners threatening repossession if arrears are not immediately cleared.
Mr Daly said: "Repossession is always the last possible resort for homeowners having difficulty paying their mortgages. Media reports suggest that unscrupulous lenders are adopting a menacing approach by threatening people in mortgage arrears with almost immediate repossession. It is important for all homeowners to be aware that there are a number of options open to them if they are having problems paying their mortgage.
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"The absolute earliest a bank can begin legal proceedings is three months after negotiations fail between the bank and the borrower, and a minimum of eight months has to have passed since the account went into arrears before legal proceedings can begin. This situation is unchanged by the revised Code of Conduct on Mortgage Arrears.
"The Mortgage Arrears Resolution Process provides homeowners with a number of options. This Government has been focused on putting forward a range of solutions aimed at keeping people in their family home. This includes the Personal Insolvency Service, and new targets set for the banks to ensure lenders are offering sustainable solutions to distressed mortgage holders.
"Any move by the banks to mislead homeowners on the range of options open to them is a very worrying departure. There is a clear need for the Central Bank to very closely monitor the practices being employed by the banks in dealing with the mortgage crisis."
(CD/JP)
