More lenders bring in tighter rules for mort­gage seek­ers

Some bor­row­ers re­ceiv­ing wage sub­si­dies will need as­sur­ances from em­ploy­ers

The Irish Times - - Front Page - JACK HOR­GAN-JONES and FIACH KELLY

Sev­eral Ir­ish lenders have in­tro­duced tighter checks and stricter con­di­tions on mort­gages for those in re­ceipt of Covid-era wage sub­si­dies.

In some in­stances, bor­row­ers will have to pro­duce ev­i­dence from their em­ploy­ers that their wage is sus­tain­able after sub­si­dies elapse. In cou­ples where one per­son is on a wage sub­sidy, some lenders will in­sist the sec­ond part­ner is able to cover the en­tirety of the mort­gage with their wage.

It comes after The Ir­ish Times re­vealed yes­ter­day that AIB had set a de facto block on mort­gage lend­ing to those in re­ceipt of the tem­po­rary wage sub­sidy scheme (TWSS).

Per­ma­nent TSB said cus­tomers on the scheme can draw down their loans “sub­ject to their em­ploy­ers pro­vid­ing as­sur­ance on the sus­tain­abil­ity of their in­come when the TWSS comes to an end”.

Reg­u­lar in­come

Fi­nance Ire­land, a non-bank lender which is more than 30 per cent owned by the State, said “where an ap­pli­ca­tion has been ma­te­ri­ally af­fected by a Covid-re­lated sub­sidy, loans can­not be drawn down un­til a re­turn to reg­u­lar in­come can be ev­i­denced”.

A spokes­woman for Ul­ster Bank said it was ac­cept­ing new mort­gage ap­pli­ca­tions where one or both ap­pli­cants were on the wage sub­sidy scheme. How­ever, it said it would re­quire “con­fir­ma­tion of in­come and em­ploy­ment” be­fore ad­vanc­ing a loan of­fer. It is un­der­stood Ul­ster Bank will in­sist that where one ap­pli­cant in a cou­ple is on a wage sub­sidy, the sec­ond ap­pli­cant who is not must be able to cover the en­tire loan.

Bank of Ire­land said it was still lend­ing to those in re­ceipt of the sub­sidy. The bank said that while a num­ber of ap­pli­ca­tions had been “de­ferred”,

“mort­gages are draw­ing down daily for cus­tomers in re­ceipt of the Gov­ern­ment sub­sidy where over­all sus­tain­able af­ford­abil­ity has been sat­is­fied”.

“Where in­come has changed, we are li­ais­ing with cus­tomers to un­der­stand their up­dated cir­cum­stances and as­sess if these are ex­pected to change again in the fu­ture.”

AIB’s pol­icy drew crit­i­cism from both the Taoiseach and the Min­is­ter for Pub­lic Ex­pen­di­ture and Re­form yes­ter­day.

Michael McGrath said he was “not happy” about the devel­op­ment, and had “con­veyed his op­po­si­tion and con­cerns” to bank­ing groups and the gov­er­nor of the Cen­tral Bank.

AIB has said its poli­cies are kept un­der re­view, and that it is “im­per­a­tive the mis­takes of the past are not re­peated”.

Brian Hayes, chief ex­ec­u­tive of the Bank­ing and Pay­ments Fed­er­a­tion of Ire­land, said lenders had a “le­gal and reg­u­la­tory re­quire­ment” to lend pru­dently. “[Banks] have a fun­da­men­tal re­spon­si­bil­ity to lend in this en­vi­ron­ment, but they can­not do reck­less lend­ing,” he said.

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