How to deal with your bank if you’re in mortgage arrears or pre arrears


Anyone who is struggling to pay their mortgage will have to engage in a lengthy and
sometimes complicated interaction with their Bank.
Doing this can be a mix of time consuming, stressful and intimidating and many people feel
they are constantly on the back foot.
However there are structures and procedures in place to assist borrowers and by following
these and other strategies the process can be a lot less daunting for borrowers.
If you run into difficulty with your mortgage either by being in arrears or before you go into
arrears (pre-arrears) you are afforded the protection of the Code of Conduct for Mortgage
Arrears (Revised June 2013) . The Code lays out the Mortgage Arrears Resolution Process
(MARP). This is a formal process which all banks are obliged to follow in dealing with those
in mortgage arrears or pre arrears and should be read. It is available on
There is a significant imbalance in power between the bank and borrowers. Whilst the
following might not guarantee your lender will be hypnotised and agree with your proposals
you will be better prepared for dealing with your bank.
These are general guidelines and the process for some can be unwieldy and you should
where possible obtain professional advice before signing any documents from your lender.
This may require you funding such advice by using payments to creditors however it is
important to get professional advice before signing anything.
The Mortgage Arrears process is for principle private residence only
The process is designed to assess a borrower’s financial position and come to an
agreement, based on a set of options, for a sustainable mortgage for that borrower.
If you are in arrears and have not yet done so you need to contact your lender. This will
place you into a very important category that of a cooperating borrower. Contact should be
made by phone and in writing. A full list of the heads of mortgage arrears departments for
each lender is available on
Now we meet the standard financial statement (SFS). This is the most important document
in this process and time and effort needs to be afforded when completing it. All lenders are
required to use this SFS as a guide when assessing options for borrowers. All lenders are
required to have a guide on how to complete this and the same is available on ours and the
Central Banks website. The information required in the SFS includes all household income,
expenditure, assets and liabilities. This should be completed honestly and accurately.
Information on all borrowers needs to be included and any guarantors may be required to
complete a separate SFS.
Each borrower is also required to submit accompanying documentation such as three recent
payslips or social welfare receipts and three months bank statements.
A completed and signed SFS with the accompanying documentation should be sent by
registered post to the arrears support unit of your lender. In the absence of banks being
The Irish Mortgage Holders Organisation Limited. Registered in Ireland No. 517549
Suite 139 The Capel Building, St. Mary’s Abbey, Dublin 7 –
Directors: Arthur Mullan, David Hall, Lucy Cronin, Tracy Mullan, Dr. Constantin Gurdgiev
required to publish the solutions they offer, you should ask in writing which mortgage
restructuring solutions they provide. Lenders are not obliged to provide all solutions on the
list outlined in the Code of Conduct (outlined below) and can pick and choose as they like.
Once the lender has received your SFS they are required to evaluate it against all solutions
they provide. Without any time restriction the lender will make an offer of a solution from its
list or alternatively may deem the mortgage unsustainable. Whatever options or none that is
made to a borrower the lender must outline why that decision was made.
You may request in writing that the lender liaise with a third party nominated by you. The
lender must comply with this request but the lender is likely to write to you directly with any
Potential Options under MARP (as per Section 39 of the Code of Conduct)
There are a range of possible options available to borrowers under MARP. No lender
facilitates all these options despite political utterances to the contrary , however borrowers
should request that all options are considered. More than one option can be used at the
same time. The options are:

  • Interest only payment for a specified period
  • A permanent or temporary reduction in the interest rate
  • Payment of interest and a part of the capital for a period
  • A payment break for a period
  • Extending the term of the mortgage
  • Changing the type of mortgage, except in tracker mortgages unless agreed
  • Capitalising the arrears and interest
  • Any voluntary scheme such as deferred interest scheme
  • Equity participation (lender takes a share, principal is reduced)
  • A split mortgage (serviced part warehoused part with or without interest on the
    warehoused part depending on the lender)
  • A debt write off
    The lender may communicate with you seeking clarification around what’s been submitted in
    your SFS. Following any clarifications given the lender should then write to you detailing
    what their proposed solution is. One advantage of the new code of conduct is that all
    restructure offers must include the advantages and disadvantages of the offer.
    Upon receipt of an offer from the lender you either accept which means you agree a new
    mortgage contract with your lender or your reject it. If you reject the offer because you don’t
    The Irish Mortgage Holders Organisation Limited. Registered in Ireland No. 517549
    Suite 139 The Capel Building, St. Mary’s Abbey, Dublin 7 –
    Directors: Arthur Mullan, David Hall, Lucy Cronin, Tracy Mullan, Dr. Constantin Gurdgiev
    like the offer or feel it’s not sustainable you risk being thrown out of the MARP process but
    you can then appeal. This must be done within the timeline advised by your lender.
    Unfortunately this appeal is to an internal bank committee. Any appeal is outside the MARP
    process and there is only a 3 month protection when you leave the MARP process before a
    lender can begin repossession proceedings. So dealing with any offer quickly is essential.
    Finally your lender might deem your mortgage unsustainable and suggest that you
    voluntarily sell or voluntarily surrender the property. In these circumstances the banks
    appeals system is also open to you.
    If your appeal to the bank fails you can take you case to the Financial Services Ombudsman this appeal can only be to deal with the operation of the MARP
    process and not the decisions such as mortgage solutions offered.
    Uncooperative Borrower
    The new code of conduct for mortgage arrears for the first time allows a bank to define an
    uncooperative borrower (section 28 of the Code of Conduct).
    If they consider someone un cooperative they are required to send a letter in writing giving
    time for the borrower to engage, if no response is received they are then allowed to make an
    unsolicited visit to your house giving you 5 days’ notice in writing (as per Section 26 of the
    Code of Conduct).
    If at any time the borrower engages then they reenter the process outlined at the start of this
    article. However if the borrower does not engage following the steps taken by the lender
    they are deemed uncooperative and repossession proceedings can begin immediately.
    If a borrower does not comply with reasonable request from their lender (such as completing
    an SFS) they risk being deemed uncooperative. An uncooperative borrower may be subject
    to penalty charges and interest and may not be eligible to utilize the provision of the 2012
    Personal Insolvency Act.
    It would be irresponsible for anyone not to advise that if you are in arrears or mortgage
    distress you must immediately engage with your lender.
    Practical Advice for those in MARP
    You should open your own MARP file and ensure that the process is at all-times
    Keep telephone contact to a minimum and make a note of any telephone conversations you
    do have, if possible record any telephone conversations and advise the lender when they
    call that you are doing so.
    A major disadvantage of the new code of conduct is that lender has no cap on the number of
    times they contact you, while all unsolicited communications must not be excessive,
    aggressive or intimidating, no steps have been taken by the Central Bank to ensure that
    bank behave reasonably.
    The Irish Mortgage Holders Organisation Limited. Registered in Ireland No. 517549
    Suite 139 The Capel Building, St. Mary’s Abbey, Dublin 7 –
    Directors: Arthur Mullan, David Hall, Lucy Cronin, Tracy Mullan, Dr. Constantin Gurdgiev
    If you feel you’re being harassed on the phone by your lender or any creditors it might be
    worth purchasing a cheap pay as you go phone, changing your contact details with the bank
    and any other difficult creditor reflecting your new phone number. This will allow you take the
    call or reply to the call (which you should do) at a time that suits you.
    Options following an unsuccessful MARP
    In the event that you’re unsuccessful in reaching an agreement with your lender through the
    MARP process and your lender indicates your mortgage to be unsustainable you have a
    further option to avail of an insolvency arrangement under the 2012 Personal Insolvency Act.
    Further information is available at
    For all borrowers experiencing mortgage distress they need to ensure that they are familiar
    with the Code of Conduct, ensure that they are engaged with their lender and if they feel
    they need further help or assistance to seek professional advice immediately.
    Irish Mortgage Holders Organisation
    Prepared by: David Hall, Director
    Stephen Curtis, Personal Insolvency Practitioner

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