Lenders warned by Central Bank on clear communication with mortgage holders
The Central Bank has warned lenders that it expects them to clearly
communicate with customers at all stages of the mortgage application
process, including customers who have already received loan offers.
In a letter to the CEOs of the lenders, the bank said they must make
clear to customers that where there has been any material change to the
customer’s circumstances prior to the drawdown of funds, the loan offer
may subsequently be withdrawn, paused or varied.
The bank said it was issuing the reminder because it had become aware
through its supervisory work that mortgage lenders have implemented
changes to their mortgage application processes as a result of and in
response to uncertainty arising from the Covid-19 pandemic.
“Some of these changes have resulted in additional credit checks
prior to the drawdown of mortgages, to ensure that there has been no
material change to the customer’s financial circumstances, and that the
customer remains likely to be able to meet his/her obligations under the
credit agreement,” wrote Helene Mitchell, Head of Consumer Protection
at the Central Bank’s Supervision Division.
“However, some mortgage lenders have not sufficiently considered the
impact of these changes on customers in the mortgage application process
and have not managed communications with these customers in a proactive
and consumer-centric way.”
The Central Bank has asked lenders to provide it with confirmation
that it has reviewed any changes it has made to the mortgage application
process in light of the Covid-19 pandemic, to establish whether or not
“the relevant systems, policies, procedures, practices and customer
communications” are in line with its expectations.
also told firms to confirm that where they identify any systems,
policies, procedures, practices or customer communications that are not
in line with its expectations it has taken appropriate action or will
undertake any necessary follow up actions as a matter of priority.
The lenders must provide the confirmation requested by the bank by December 4.