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Customers in Financial Difficulty- Primary Residence

Need help with your mortgage repayments?

At Bank of Scotland plc we understand how the pressures within the current economic climate may have the potential to present real challenges to customers’ financial circumstances. We also appreciate that added pressure on your financial situation could then result in you experiencing difficulty in keeping up with mortgage repayments.

If you are currently having difficulties paying your mortgage, or are concerned that you may experience financial difficulties in the future, then we may be able to help you.

To meet our obligations under the Central Bank of Ireland’s Code of Conduct on Mortgage Arrears, (the “Code”), we have in place a four step Mortgage Arrears Resolution Process (“MARP”) to help customers in mortgage arrears or those at risk of going into arrears in the future. These four steps are:

  1. Communication with you
  2. Understanding your financial situation
  3. Assessing your situation
  4. Reaching a resolution

A printable version of our Mortgage Arrears Resolution Process can be downloaded here.

As part of the Code, we will apply our MARP to your mortgage loan which is secured by your primary residence in the Republic of Ireland. To be clear, your primary residence qualifies as either:

  • the residential property you occupy as your primary residence; or
  • a residential property which is the only residential property owned by you in the Republic of Ireland

Our Customer Support

Bank of Scotland plc has appointed Pepper Asset Servicing (“Pepper”) to provide customer support and administration services to Bank of Scotland plc and to support Bank of Scotland plc in the management of its business in Ireland and Northern Ireland. Pepper has an experienced and dedicated team who work closely with any mortgage customers who are either experiencing, or are anticipating, future difficulties in making their mortgage payments. Pepper will ensure that our MARP is followed and that the best outcome possible is reached.

How our Mortgage Arrears Resolution Process (MARP) works

The four steps are:

  1. Communication with you
  2. Understanding your financial situation
  3. Assessing your situation
  4. Reaching a resolution

1. Communication with you

Talk to us – don’t ignore the problem

Addressing or realising there is a problem is one of the most important steps towards reaching a solution. You should contact Pepper as soon as you realise you are in, or at risk of falling into financial difficulties. Once you make contact, they can immediately start working with you to reach a solution. We would like to agree a solution with you before you encounter any further difficulties or your situation worsens.

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2. Understanding your financial situation - the Standard Financial Statement

Understanding your finances

The first step to resolving your financial difficulties is understanding your finances. When you contact Pepper to tell them that you are either in financial difficulty or in danger of getting into financial difficulty, or when Pepper contacts you in relation to your arrears situation, you will be asked to complete a Standard Financial Statement. Pepper can help you to complete this form. Please refer to the ‘Useful Contacts’ section for contact details.

It is important to fill out the Standard Financial Statement accurately, honestly and fully and provide any documentation requested to allow us to fully assess your situation. Standard Financial Statements should be completed and returned to Pepper.

The Standard Financial Statement and the consent form can be downloaded here.

Additional Information which may assist you with submitting your Standard Financial Statement can be downloaded here.

Please note:

  • Incomplete statements may be returned to you and this may delay the process.
  • You may also be asked to provide additional documentation to support the information you have provided, e.g. bank statements.
  • You may wish to obtain independent advice to help you with completing forms such as the Standard Financial Statement.e.g. Advice may be available from the Money Advice and Budgeting Service.
  • The Central Bank of Ireland has also published a guide to completing the Standard Financial Statement. This guide can be found on its website at www.centralbank.ie.

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3. Assessing your situation

Financial Assessment

Once you have completed and returned your requested documentation to Pepper, their Arrears Support Unit will use the information provided by you to assess your situation on its individual merits. The Arrears Support Unit will carefully consider:

  • your personal circumstances
  • your financial circumstances - household income, expenditure and domestic budget
  • your overall personal debt
  • the information provided in the Standard Financial Statement
  • your current ability to make repayments
  • your previous repayment history
  • any other information that impacts the assessment i.e. illness, disability etc.
  • any proposal you have submitted

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4. Reaching a resolution

Possible Outcome

Pepper’s Arrears Support Unit will explore all available resolutions in an attempt to arrange a new repayment plan with you. They will take into account both your interests and our responsibilities as the lender.

Alternative repayment arrangements are available, however, these vary from case to case and are subject to an assessment of your individual circumstances, where applicable or appropriate, such as:

  • affordability;
  • arrears on account;
  • previous alternative repayment arrangements;
  • maintenance of previous alternative repayment arrangements;
  • ongoing sustainability of any alternative repayment arrangements offered by us.

Having assessed all of the information provided, Pepper will decide which alternative repayment arrangement they believe is best suited to your individual circumstances.

They may decide that it is not possible to reach a resolution. If this happens we will write to you with the reasons for the decision.

If an alternative repayment arrangement is agreed, it is important that you keep to the terms of the arrangement. If there is a change in your circumstances that may affect the arrangement, you should contact Pepper immediately. The terms and conditions of your mortgage will continue to apply, except to the extent they have been modified by the new alternative repayment arrangement.

Please note:

  • An alternative repayment arrangement may be affordable to you in the short term but could be more expensive over the life of the loan.
  • You are required to maintain your full contractual repayments until we have processed your request and informed you of our decision.

Alternative repayment arrangements - explained

Interest Only Payments: This alternative repayment arrangement means that only the interest is repaid for a specific agreed period of time. Paying interest only will result in a lower monthly repayment. No capital is repaid during the interest only period which may result in you paying additional interest on your account over the remaining term of the loan. Note if the interest rate on your loan changes while this alternative repayment arrangement is in place, your repayment amount will increase or decrease in line with the interest rate change.

Interest and Part Capital Payments: This alternative repayment arrangement means that you pay your full monthly interest and a reduced amount of your capital for a specific agreed period of time. Your monthly repayments will be higher than with an interest only payment, as you are paying both the interest and some of the capital of the loan. As you will be paying off less capital during the alternative arrangement period, this may result in you paying additional interest on your account over the remaining term. Note: if the interest rate on your loan changes while this alternative repayment arrangement is in place, your repayment amount will increase or decrease in line with the interest rate change.

Reduced Payments: This alternative repayment arrangement means that you pay a fixed monthly repayment which is less than the monthly payments agreed in your original mortgage for a specified period of time. As you will be paying off less capital during the alternative arrangement period, this may result in you paying additional interest on your account over the remaining term.

Moratorium: A moratorium is an agreed period of time during which you will not be required to make payments to your account. As you will be paying neither capital nor interest during the moratorium period, this will result in an increase to your account balance and may result in you paying additional interest on your account over the remaining term.

Please Note: The above alternative repayment arrangements offer a temporary solution to any financial difficulty you may be experiencing and therefore no other changes will be made to the terms and conditions of your mortgage, including the agreed term over which your mortgage will be repaid. As all the above alternative repayment arrangements will result in you paying less capital than would have been the case had the contractual payments continued to have been paid, your account balance will be higher than anticipated and therefore your existing contractual payment may no longer be sufficient to repay the mortgage within the agreed term. Should the bank be required to recalculate your contractual payment following the expiry of an alternative repayment arrangement (for example, if there were to be a change to the account interest rate), then the new contractual payment will be calculated to ensure that your account is repaid within the agreed term.

Extension of the Mortgage Term: This alternative repayment arrangement allows you to extend the life of your mortgage as a means of reducing your actual monthly repayments by spreading the amount owed over a longer period. Whilst this will result in lower monthly repayments, it should be noted that interest will be charged over the extended period.

Capitalising the Arrears and Interest: This alternative repayment arrangement means that all outstanding mortgage arrears will be added to the remaining principal balance and repaid over the mortgage term. Your monthly instalment will be recalculated and adjusted in line with your original terms and conditions.

Trade Down: If you are no longer able to meet existing mortgage repayments we may allow you to sell your existing property and purchase a property of lower value, thereby reducing your mortgage repayments. Note that this option is only available where you meet certain criteria.

Voluntary Sale: This is where we may allow you to sell your property and use the funds from the sale to reduce or clear your remaining mortgage balance including your arrears.

Voluntary Surrender: This is where we may allow you to move out of the property and we will sell the property on your behalf. The funds from the sale will be used to reduce or clear your remaining mortgage balance including your arrears.

Mortgage to Rent (MTR): Mortgage to Rent is a government initiative that allows you to remain in your family home. Mortgage to Rent is where you voluntarily surrender your family home to the Bank who, with your agreement, sells the family home to an Approved Housing Association at the current market value. An Approved Housing Association will own the property and you will pay rent to them. You will no longer own the property. The availability of Mortgage to Rent is subject to criteria set out by the government under the Mortgage to Rent initiative.

Important Information

  • You will remain liable for any outstanding debt, interest and all associated costs if your property is sold and the sale proceeds are less than the outstanding balance of the loan.
  • The availability of any resolution is subject to an assessment of your individual circumstances and meeting certain criteria.
  • Once a resolution is put in place, we will review this arrangement at your request or at intervals that are appropriate to your arrangement.
  • We may require you to sign a confidentiality agreement as part of a resolution. We recommend that all borrowers and their spouse or civil partner (where relevant) seek independent legal or financial advice prior to entering into a confidentiality, settlement or alternative repayment agreement.
  • If an alternative repayment arrangement has been agreed you should ensure that your life assurance in place is sufficient to cover your revised mortgage terms.
  • If you have a full term interest only mortgage agreement you should ensure that you have a suitable repayment plan in place as the entire amount that you have borrowed will still be outstanding at the end of the mortgage term.
  • Please note that details of your Mortgage Account, including any arrears balance and any alternative repayment arrangement agreed with the Bank, may be reported to the Irish Credit Bureau, and/or any other credit reference agency. This may adversely affect your credit rating.
  • Interest will be applied to the outstanding balance of the loan. This balance includes any element of unpaid interest and charges which will accrue interest and be capitalised to the loan

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Bank of Scotland plc has appointed Pepper Asset Servicing to provide customer support and administration services to Bank of Scotland plc and to support Bank of Scotland plc in the management of its business in Ireland and Northern Ireland.

Telephone calls may be recorded to confirm instructions given and for quality control, training and regulatory purposes.

Bank of Scotland plc. Registered in Scotland No. SC327000. Registered office: The Mound, Edinburgh EH1 1YZ. Bank of Scotland plc is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom and is regulated by the Central Bank of Ireland for conduct of business rules. Financial Services Register no. 169628.