Have you seen or heard MARP in conversations with your lender? Perhaps MARP is mentioned in letters arriving in the letterbox but don’t know what it means? Don’t worry, we are here to help break down the jargon and show you how the Mortgage Arrears Resolution Process could help you in your current situation.
What is mortgage arrears?
First, let’s start with defining mortgage arrears. Being in mortgage arrears means that you are behind on paying off your mortgage. It is the result of missing some or all of your mortgage loan repayments to the lender. A lender can be one of the main high-street banks, or a credit servicing firm, sometimes called “vulture funds”.
Mortgage arrears cans happen for many reasons. It could happen because of illness, loss or a reduction in income, or some other reason outside your control. It’s important to know that supports are available. Continue reading to learn more.
What is the Mortgage Arrears Resolution Process (MARP)?
The MARP is a framework that sets out rules of how the lender must deal with borrowers when they enter into mortgage arrears or are in pre-arrears. It forms a major part of the Code of Conduct on Mortgage Arrears (CCMA); a statutory code set out by the Central Bank of Ireland.
What are the steps in the MARP?
(1) Communication with borrowers: this determines how the lender will engage with the borrower to inform them of their arrears.
• Be clear: it is a requirement to have clear communication, so the borrower can understand what is happening.
• Excessiveness – it’s a no!: Communication from the lender must not be excessive.
• Inform: the lender must inform borrowers if they plan to sell their mortgage loan to a credit servicing firm (sometimes called “vulture fund”).
• Be compliant: the new owner of the mortgage loan must be compliant with the MARP.
Dealing with the lender on your own can be hard. Some people get confused with all the jargon and requests for information. If a borrower feels this way, they can have an adviser from MABS deal with the lender on their behalf. This does not mean the borrower can leave everything with the MABS adviser; the borrower must still work with them throughout. To make an appointment with an adviser, use our office finder
(2) Financial Information: to give a full and clear picture of a borrower’s financial situation, a Standard Financial Statement (SFS) must be completed. If a borrower is confused or overwhelmed by the SFS, they can complete it with the assistance of an adviser from MABS. The SFS is covered in more detail later in this blog.
(3) Assessment: when the SFS has been filled in, it must be submitted to the Arrears Support Unit (ASU) of the lender. The ASU will review the SFS but will also take into account the borrower’s personal and family circumstances when considering potential arrangements.
(4) Resolution: this determines how the lender will engage with the borrower to inform them of their arrears.
What protections does the MARP give borrowers?
The MARP protects borrowers from being immediately evicted from their homes if they fall into mortgage arrears. It ensures a borrower is given eight months’ notice from the date their arrears began before legal proceedings can start. This time allows the borrower to work towards an arrangement that keeps them in their home, wherever possible.
If a proposed arrangement is rejected, an Appeals Board (made up of three senior personnel from the lender in question) will review the situation. Sometimes the lender will reject an arrangement proposed by the borrower, but this does not mean the end. A rejected proposal must be reviewed by an appeals board, which is made up of three senior personnel from the lender. The lender must acknowledge receipt of the appeal within five days and communicate a decision within 40 days.
Important- A borrower can lose protections of the MARP if they do not engage with the lender. Not engaging can be seen as non-cooperation and allows the lender to begin legal proceedings for repossession of the home. Engaging can improve the chances of a borrower keeping their home, and it shows they are willing and focused on finding a solution.
What does a Standard Financial Statement (SFS) look like?
All SFSs must contain the same questions as set out by the Central Bank. A standard sample document can be found however, the colours, font and design can differ on the SFS documents dependent on the lender. The key thing to remember is that the questions and content remain the same. An adviser from MABS can help borrowers in mortgage arrears complete their SFS for free.
How to start the MARP process?
It’s important to remember that it’s never too late to address home mortgage arrears. Most importantly, it’s recommended that a borrower contact their lender as soon as possible if they are in mortgage arrears. The longer a situation is left, the harder it can be to take the first step to get help.
Listed below are the MARP guidelines for lenders/credit servicing firms, and how borrowers can begin their MARP process.
If you are in mortgage arrears and fear you are at risk of losing your home, call the MABS dedicated Helpline on 0818 07 2000, message us on WhatsApp 086 035 3141 or find your local office and make an appointment.
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