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Lenders told to be upfront with mortgage applicants on impact of wage supports

 

 

Charlie Weston  

November 16 2020 12:35 PM

Move comes after some applicants were unable to draw down loans when lenders found out their employer was impacted by the pandemic

BANKS and other lenders have been told to be upfront with mortgage applicants whose employers are using the State wage subsidy scheme.

It comes after a number of mortgage applicants were unable to draw down home loans when additional checks by lenders found their employer was impacted by the pandemic.

In the summer AIB was forced into a U-turn after issuing an internal memo to staff outlining how it was “pausing” lending to customers on the pandemic unemployment payment and the wage subsidy.

The banking group found itself at the centre of a storm when it was revealed it was halting all applications for mortgages at AIB, Haven and EBS from those on State supports.

It changed tack and said it was now accepting new mortgage applications from customers who are on the State’s Covid-19 supports.

But AIB group and the lenders have been reported to be refusing to release funds on mortgage applications that are already approved, when additional checks show employers have signed up for the wage subsidy scheme.

In some cases the income of the person applying for the mortgage is unaffected, but lenders are taking a negative view if others in the applicant’s firm are on the wage subsidy.

Now the Central Bank’s head of consumer protection in the supervision division, Helena Mitchell, has written to the chief executives of banks and other mortgage lenders telling them to make it clear well in advance if they intend to refuse applications or drawdowns due to the impact of Covid-19.

Read more…

For more information on Seaspray’s mortgage broking service or to review your existing mortgage, please contact john.finnamore@seasprayfs.ie or call +353 1 7070 000

This is a summary article re-published from an article written by Charlie Weston of independent.ie on Monday, November 16th. Full article is available to read here

Seaspray Financial Services Ltd trading as Seaspray Private And Seaspray Mortgages Is regulated By The Central Bank Of Ireland. 

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