Regulation of mortgage brokers to be reviewed | Irish Examiner. Mad stuff!!

THE Government is to examine laws regulating mortgage brokers after the case of a debt-ridden family affected by suicide was raised in the Dáil.

Junior Finance Minister Brian Hayes made the vow yesterday. The Irish Examiner earlier this week highlighted the story of Jennifer (not her real name), whose husband took his own life. She now faces the loss of the family home.

Fine Gael TD Paschal Donohue yesterday raised the plight of the widow and her late husband, who had secured a €300,000 remortgage loan through a broker despite being on social welfare, facing arrears and only having a small income from a fruit and veg stall.

Brokers Irish Mortgage Corporation (IMC) said the couple had a joint income of €100,000 when they sought the loan at the height of the boom in 2007.

Mr Donohue said: "This adjournment motion is prompted minister by a desperately sad case which I became involved in last week which received some coverage in the Irish Examiner.

"I have looked at the chain of events leading up to this sad event and at the financial transactions which led to the creation of that environment. There is no doubt but that mistakes were made by many parties along the way, including, tragically, the family involved."

After learning of Jennifer’s case, Mr Donohue said he was concerned about the role of mortgage brokers and financial intermediaries.

"The family concerned received a mortgage, the application form for which contained no evidence of a bank account. Also, the person granted the mortgage did not have life assurance, was not able to produce evidence of income and had already built up mortgage arrears from a previous mortgage."

The TD said regulation of mortgage brokers needed to be tightened, to protect vulnerable borrowers and ensure there was a clear paper trail between borrower, intermediary and lender.

The lender involved, Springboard Mortgages, has threatened Jennifer and her family with repossession of the home as she struggles to meet mortgage repayments.

The Central Bank is probing sales practices used by IMC, the broker which arranged the €300,000 loan.

Junior Minister Brian Hayes said the Central Bank had a registry of over 2,000 mortgage brokers. He said there may be questions about the supervision of brokers and the complaints system against them.

"If the Central Bank believe that it is necessary to change the law to give additional consumer protection as the deputy’s outlined, I think the Government would be clearly open to that," he added.

Mr Donohue said that others in the housing and mortgage sector had come across similar difficulties to the case of Jennifer’s family.

Mr Hayes said he expected direction on overhauling the laws for mortgage brokers to come from Europe and the issue was one which the Polish presidency of the EU was focusing on.

via examiner.ie

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