Parliamentary Question addressed to the Minister for Social Protection

To ask the Minister for Social Protection if she will clarify the person’s who may become a member of the panel of advisors of the new independent advisory service for mortgage holders; if her attention has been drawn to concerns among professions such as financial brokers that they will suffer from loss competitive advantage if they are admitted to this scheme at a much later date; if she will give consideration to immediately admitting such professions which are well regulated and meet the criteria of the scheme; and if she will make a statement on the matter?

Reply

I recently announced a three-phased approach to establishing a comprehensive Mortgage Arrears Information and Advice Service to provide the necessary supports to assist people in mortgage distress. The approach differentiates between mortgage information and mortgage advice. The first two involve the enhancement of the website www.keepingyourhome.ie and the establishment of a Mortgage Arrears Information Helpline within the Citizens Information Board both of which focus on the provision of comprehensive mortgage arrears information in particular to people in arrears or pre-arrears.  

The third element of the service is the provision of independent financial advice to mortgage holders who are being presented with long term mortgage resolution proposals by their lenders. This advice will be provided by a panel of accountants drawn from members of the main accountancy institutes in Ireland who have agreed to participate and support this independent service.

When a lender is proposing longer-term mortgage resolutions, the lender will advise the borrower to obtain independent financial advice on the proposed arrangement and that, if the borrower wishes to avail of this option, that the lender will pay €250 to an accountant of the borrower’s choosing for the provision of this advice.

An operating protocol for the provision of this advice has been agreed between the main recognised accountancy bodies and the lenders. The general scope of the advice will be limited to the borrower’s principal private residence.

The advisory framework has commenced with practicing accountants because they already operate within a regulatory regime which includes qualitative oversight by their regulating bodies and in these circumstances it was possible to establish the advisory framework for people with mortgage distress within a relatively short timeframe.

There is nothing to inhibit other financial intermediaries from continuing to give advice on mortgages as requested by borrowers. It is intended to review the operation of the advisory framework in June 2013 at which point other interested parties who meet the criteria in terms of qualifications, experience, independence, professional indemnity insurance, etc., may be considered for inclusion.

The accountancy bodies have already notified their members about the new service with a view to having the panel in place before the end of September. The panel will be available on a county by county basis and the details will be available on the website www.keepingyourhome.ie