Mortgage arrears code 'has zero legal standing' for IBRC

The two final bidders for the loan book held by the Irish Bank Resolution Corporation have agreed on a voluntary basis to adhere to the Central Bank's guidelines.

However Kieran Wallace, under questioning from Fianna Fáil's Michael McGrath, said the agreement did not mean they would be legally bound to the code of conduct on mortgage arrears.

This is a transcript of their exchange on the issue:

Michael McGrath: "What status does that (agreement) have? Can you advise where is that going to be written down in this whole sale process? What piece of paper will that be on?"

"It's actually just a voluntary agreement. It won't be on any particular piece of paper," said Mr Wallace.

Michael McGrath: "It's not written down anywhere at all?"

Kieran Wallace: "No."

Michael McGrath: "So it has zero legal standing?"

Kieran Wallace: "That is correct."

Some 13,000 Irish Nationwide mortgages are to be sold by the former Anglo Irish Bank. If the loans are sold abroad, the mortgages will no longer be subject to Irish consumer protection law.

Deputy McGrath said: "You have thousands of IBRC mortgage holders who now feel they are potentially going to be at the mercy of an unregulated, unsympathetic, foreign-owned fund and they will find themselves completely exposed, isolated and vulnerable to whatever that fund decides to do with their mortgage."

Update 6pm: The two final bidders for the accounts held by the Irish Bank Resolution Corporation have agreed on a voluntary basis to adhere to the Code of Conduct on Mortgage Arrears.

Kieran Wallace, admitted as above that the agreement had no legal standing, but added the adherence to the Central Bank's arrears code has been confirmed in email correspondence.

"Having had discissions with the relevant bidders, my personal view is they will honour that commitment," he said.