Banks Renege on Mortgage Approvals

Banks that renege on mortgage approvals just because the employers of borrowers have availed of the temporary wage subsidy scheme have to be called out according to Mayo Sinn Féin TD Rose Conway-Walsh.

After receiving an answer to a Parliamentary Question from the Minister for Finance  on the matter Deputy Conway-Walsh said:

“I am dealing with a number of individuals and couples who started building their homes after receiving official loan approval.  They then sought to drawdown the first stage payment on completion to slab level only to be told that because their employer entered the temporary wage subsidy the funds would not be released.

This is outrageous.  What are they supposed to do?  Leave the house partially built?  I know couples where their income has actually increased and yet they refuse to honour the loan offer.  In one application the Ulster Bank cited “As responsible lenders we must fulfil our obligations to keep our customer safe and secure.  The applicant continued in full employment during the pandemic and is guaranteed full employment in the future.  Yet, she is penalised because her employer had a 25% reduction in turnover and has rightly availed of the temporary wage subsidy. 

How can the business decisions of a third party impact a mortgage decision?  Surely this cannot be legal or ethical.  I am encouraging people who are being treated this way to immediately lodge a complaint to the Financial Services and Pensions Ombudsman and I am bring these cases to the attention of the Central Bank who say that “it expects all regulated firms to take a consumer-focused approach and to act in their customers’ best interests at all times, including during the COVID-19 pandemic.

For the last number of years I have sat in the Joint Oireachtas Finance Committee holding banks to account on the Tracker Mortgage scandal which saw them being forced to pay back millions of euros they had robbed from customers.  They did everything possible to wrangle their way out of paying and showed no genuine remorse.  Now we see the banking culture has not changed one iota.  I fear the banks are again about to wreck the lives of many.  Their behaviour and conduct thus far in the latest crisis is appalling.  It is time for Government to step in and protect its citizens.”