Government Proposes Additional Protections for Homeowners in Default

The origins of the new Bill lie in the Keeping People in their Homes Bill, a Private Member’s Bill from early 2017.  The new Bill will amend the Land and Conveyancing Law Reform Act 2013 to deal with circumstances where an insolvency remedy is not available to a borrower pursuant to the 2013 Act.

In considering an application for repossession, the Bill will require the court to have regard to the following factors:

• the overall proportionality of the application;
• the circumstances of those residing at the property;
• proposals put forward by either side to allow the borrower to remain in the property and the response thereto.  This includes a proposal for participation in a Government scheme for distressed mortgage holders; and
• where the mortgagee is not the original mortgagee, the amount paid to purchase the mortgage by reference to the debt outstanding in respect of the mortgage.

Circuit Court statistics show that the number of repossession orders granted in respect of principal dwelling houses in that court peaked in 2015 but has decreased since then.  By the end of quarter 3 of 2017 the average number of these possession orders was 62 per month.  There was also a falling number of new cases issued.

While the details of the Bill will not be known until a draft is available, the broad outline provided follows a consumer-protection-oriented legislative trend.  Some aspects of the Bill may largely reflect existing practices but others (eg a requirement to disclose and have considered the value paid for the mortgaged debt) are likely to be controversial.  The Bill will undoubtedly be watched closely by consumer advocates, mortgage-lenders and loan purchasers alike.