Revised Code of Conduct on Mortgage Arrears Published


The Central Bank has published a revised code of conduct on mortgage arrears (“CCMA”), effective from 1 July 2013.  As with previous editions of the CCMA it applies to mortgages in respect of principal private residences only.  This note highlights the key changes from previous editions of the code.


  • The definition of a not co-operating borrower has widened.  The definition now includes circumstances where a borrower is meeting mortgage repayments but have an arrears balance.  It also captures circumstances where there is a failure to engage with the lender.  The lender is required to issue a warning letter prior to designating a borrower as not co-operating.

  • Prior to commencement of legal proceedings a lender must have made every reasonable effort to agree an alternative arrangement with the borrower.  Legal proceedings may commence on the later of 3 months after date of issue of a letter rejecting an alternative arrangement (by either borrower or lender) or 8 months from the date on which the arrears arose.  

  • The limitation on 3 unsolicited contacts per month has been removed: lenders can make unsolicited contacts with a borrower, provided the communications are proportionate and not excessive taking into account the circumstances of the borrower.  

  • Unsolicited visits to a borrower’s residence can be made (provided certain conditions are met) where there has been a failure to communicate by a borrower.  

  • Where an alternative arrangement is offered, the implications of this must be explained to a borrower.  Where it is refused then the lender must explain the reasons for a refusal and also set out other options such as voluntary surrender, trading down, mortgage to rent or voluntary sale including the impact of those options on  the borrower’s credit rating.

  • If a lender concludes that there are no appropriate and sustainable options to allow a borrower retain a tracker mortgage then a lender may offer the borrower an alternative arrangement that requires the borrower to change to another mortgage type. 

For The Borrower For The Lender
Borrowers need to be careful that any failure to engage could render them liable for designation as not co-operating  Wider scope to designate borrowers as not co-operating 
12 month moratorium on legal action no longer applies Lender can now proceed with legal action earlier
Possible loss of tracker mortgage if no appropriate and sustainable alternative can be agreeda If removing a borrower from a tracker mortgage, lender must offer a long term affordable and sustainable repayment arrangement
Lender can make unsolicited contacts with borrower (including calls to borrower’s home in certain circumstances)
No opportunity for independent oversight or external appeal
There are restrictions on when lenders call to borrower’s homes and care must be taken  that the CCMA is complied with

The recent case of Irish Life and Permanent (“ILP”) .V. Duff highlights the importance for lenders to comply with the CCMA. ILP sought an order for repossession, which was granted in the Circuit Court but subject to a stay. The matter was appealed to the High Court, one of the grounds being that ILP had not complied with the CCMA. It was held that whilst the CCMA is not equivalent to legislation and does not absolve borrowers from their contractual obligations under their mortgage, non compliance with the CCMA by a lender could disentitle them from obtaining an order for possession. Therefore, care needs to be taken by lenders in dealing with the CCMA that firstly they are applying the appropriate CCMA (depending on the particular circumstances in each case) and that it is being applied correctly.

 For further information on the operation of the code of conduct on mortgage arrears please contact Roisin Bennett at or any other member of our property team on 01 6619500. 

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