The Keeping People in Their Homes Bill [No. 25 of 2017] (the “Bill”) was published as initiated on 23rd February 2017.
The Bill as drafted seeks to introduce significant new additional safeguards to mortgage holders in arrears in relation to their principle private residence by amending sections 96 and 97 of the Land and Conveyancing Law Reform Act 2009 (the “Act”).
As drafted, the provisions in the Bill would substantially enhance the protections already in place - for example the Central Bank Code of Conduct on Mortgage Arrears and the specific provisions of the Personal Insolvency Act 2012 in respect of the principle private residence.
The proposed insertion of a new Section 97 into the Act seeks to introduce specific legislative guidance with regard to circumstances in which orders for possession will be granted by the Courts. Of note, under the proposed new Sections 97 (4) and (5) of the Bill, the factors that would be considered by the Court upon any application for possession by a mortgagee would include:
- Whether the order being sought pursues “a legitimate aim”, is justifiable by reference to a “pressing social need”, and is “proportionate” by reference to a number of different factors including the amount of principle and interest paid by the mortgagor and the suitability of alternative options such as a lifetime mortgage; and
- The likely impact on the rights under the ECHR of mortgagor and the mortgagor’s household to include the extent to which an order will affect the physical and mental health of all members of the household.
Further, specific reference is made to the proposed considerations that should be taken into account in respect of mortgages which have been the subject of loan sales, including the following:
- The amount paid for the purchase of the loan or underlying mortgage by reference to the level of debt;
- The value of the loan or mortgage on the enforcing entity’s balance sheet, and the market value of the property at time of court hearing; and
- The availability of tax relief for the enforcing entity in relation to the relevant non-performing loan, or in respect of its nonperforming loans generally.
The Bill also provides that new Sections 97 (4) and (5) apply retrospectively.
The Bill is at First Stage at present, but its progress through the legislative process will be closely monitored by all stakeholders in the property and mortgage market.