# Should we be in MARP if all we want is a payment holiday?



## Emmaf (16 Nov 2013)

Can anyone answer this please?

Is it normal to be put into the MARP process when applying to your bank for payment holiday / moratorium to enable unpaid maternity leave?  

The website keepingyourhome.ie quotes the MARP process as for being for those in arrears or pre-arrears.

''Under the CCMA, lenders must operate a Mortgage Arrears Resolution Process (MARP) when dealing with arrears and pre-arrears customers.''

We applied for payment holiday for to consider unpaid maternity leave, showed we were not in arrears and had savings, yet letters which eventually came back to us have put us into the MARP process.  

We wrote to bank immediately to clarify...letter was ignored.  Called numerous times, waste of time.  Different answers every time.  Wrote again with our question, listing the letter as 'formal complaint' and sent registered post.  It arrived.  Emailed a copy of the same formal complaint letter to a staff member who replied it was sent to appropriate team.

That was 40 days ago. Now considering contacting Ombudsman, as we want the bank to answer this as concerns it will affect future credit or have implications.  We just want to know why we are in MARP and what are the implications and if we are not in arrears can they remove us from it?

A staff member in another high street bank advised me we should most definitely NOT be part of MARP and to contact senior figures to emend this immediately.  Confused.....Can anyone shed some light?

 Thank you.


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## Brendan Burgess (16 Nov 2013)

Well if they don't give you a payment holiday, will you go into arrears? 

If so, then you are in pre-arrears and should be in MARP. 

If you have savings, why are you looking for a payment holiday? Why not just keep paying your mortgage out of savings? 

Going into arrears will affect your credit rating. Going into MARP will be noted on your ICB record but does not affect your credit score, so it won't affect your credit rating as such. 

I don't see much point in contacting the Ombudsman. It will take too long to sort out the problem.


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## Emmaf (17 Nov 2013)

Thank you for your response Brendan.  Apologies for posting in wrong area.

To answer what you asked:

No, we won't go into arrears if we don't get payment holiday.  But we want to keep savings so won't take the payment holiday if it is going to affect our credit rating by being part of MARP.  Will only accept payment holiday if it has no adverse affect on us long term, and thats what no one can answer.

I have been told on the phone by bank staff that a payment holiday is different to going into arrears, but is just all dealt with by same department therefore the application had to go through this department.  Other staff have told me that a payment holiday is similar to be being in arrears. Other staff again have told us that the bank will put every mortgage query through MARP because the government need to see the figures to be able to justify establishing it...We are not getting a straight response from anyone! We just want to know what is the correct answer here?

What you have told me is the straightest reply we have had yet, but we need to hear this from our bank.  Surely thats a basic request for them to answer?

What I am looking for is the bank to tell me exactly where we stand on this as there seems to be a confusion in what we are being told and a reluctance to put anything in writing, and even to respond to our letter when sent to them as a 'formal complaint'.

We want the information in writing from them before we can make a decision and no one will respond to us.  We feel it has to go to the Ombudsman if they won't answer us in writing.  Happy to hear other thoughts / advice?


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## Brendan Burgess (17 Nov 2013)

Emmaf said:


> T
> 
> No, we won't go into arrears if we don't get payment holiday.  But we want to keep savings



It seems to me that the reason for savings is to build up a fund for unpaid maternity leave. 

I don't understand why you would not use your savings. 

By not using your savings, you are borrowing at the mortgage rate to save at, what is probably a lower, savings rate. Any interest earned is subject to 41% DIRT. 

It's a good idea to have a small emergency fund, but it's not a good idea to borrow at expensive mortgage rates for  a big savings fund. 

Brendan


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## Emmaf (17 Nov 2013)

Thanks.

But do you know is it normal to be put into the MARP process when applying to your bank for a mortgage payment holiday when not in arrears or pre-arrears?  

Why do you think they have not responded to our question?  Just even from a customer service standard, nothing...!


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## wbbs (17 Nov 2013)

Unless it is a specific feature of your loan offer that you are entitled to a payment break  then you are in  effect asking the bank for a restructure of some sort on your mortgage, this is why they are routing it through the department that makes all those decisions which of course is the same to them as a MARP proposal.  

It will involve increased payments at the end of the moratorium ( a payment holiday is too pretty a term, makes it sound like it's something nice and free!) either for the coming year to make up the difference that was unpaid or for longer in which case you will pay well for your 'holiday'.  

If you could manage to pay those months from savings as suggested assuming you have enough left over for emergencies etc then you would be better off to do it that way.


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## Bronte (18 Nov 2013)

Emmaf said:


> Why do you think they have not responded to our question? Just even from a customer service standard, nothing...!


 
This bit I can help you with, because they are incompetent and you are only a number. How about calling to your branch and insisting on seeing the manager until he sorts out Dublin with you.

Which bank is it?


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## cremeegg (18 Nov 2013)

A payment holiday is a ridiculous idea from a customers point of view.

If you skip say 3 months payments of €1,000 on a 4% mortgage, with 20 years remaining.

It will cost you €3,000 by 4% €120 by 20 years that is €2,400.

Payment holidays were dreamed up by the banks in the good days as a way to make more profit, avoid if at all possible.


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## Dilly (20 Nov 2013)

A payment break is unnecessary if you can afford the repayments. Essentially you asked for a restructure on your mortgage and as you are not in arrears you were classed as pre-arrears, in banks eyes you are not in arrears now but have looked for restructure and are therefore in danger of being arrears in the future. 

I presume you didn't tell them you had savings to cover the payments anyway?

As previously said here a payment break will cost you more in the long run its probably worth re-thinking.


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## Brendan Burgess (20 Nov 2013)

cremeegg said:


> A payment holiday is a ridiculous idea from a customers point of view.
> 
> If you skip say 3 months payments of €1,000 on a 4% mortgage, with 20 years remaining.
> 
> ...



Emma

I don't think you should take a payment holiday if you have savings.

But cremeegg's explanation ignores the time value of money. It also ignores the fact that people may use overdrafts or credit cards to pay their mortgage.  It also ignores that people may be getting a higher rate of deposit interest on their savings. 

Payment breaks are an excellent idea where people are under pressure. When your circumstances improve, you can  overpay if you wish.


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## Emmaf (20 Nov 2013)

Thank you for the advice.  I got more advice on here than I did from the branch.  The bank is AIB.

Nobody in AIB has answered our question to date.  We asked for all the info up front so we could make a decision based on information...nothing.

I called into our local branch and asked who could I speak to about it.  Was told to leave my number.  No one rang.  Called in again and asked for a name and then asked to see this person.  Was told I would be contacted with an appointment.  Was literally feeding my baby when she called 3 days later.  I asked If I could call her back and explained why.  She told me in no uncertain terms that she was available for me now or never!  "it's 4.45 mrs Emma - I walk out the door at 5pm and have 9 other calls to make before then, so now or never'.  (On my life this is true).  I asked could she give me an appointment and she said no, my options were to take it or leave it.  I explained we wanted to talk it through as did not understand all the implications etc.  Was told she did not have authority (She is a Mortgage 'Relationship Manager') and I needed to speak to someone in Bankcentre.....end of.  No names.  'A big place' she said.  Bankcentre have been useless.

We provided financial statements, pay slips, everything they asked for and more and declared our savings.  I was sure it would not be granted due to the savings.  But We didn't understand the implications of taking it and how repayments would then be, as well as this whole MARP thing. Thats what we wanted to speak to someone about!

Have requested all info on our account from their Data Protection Department as well as transcripts of calls.  Writing to the Ombudsman once we hit 40 days from formal written complaint.  Purely from a standards and good practice front we should have been answered months ago.  We will keep going until we get an answer and the bank do what they are meant to and answer us.  

In the meantime we've closed our accounts with them and those of our children.  Mortgage remains but can do nothing about that for now.


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## laobhise (9 Jan 2014)

Hi Emmaf, 
just wondering what happening for you? Going through exactly the same thing with AIB at the moment. I want to take a 5 month moratorium on my mortgage to facilitate the extra 16 weeks of unpaid maternity leave. Submitted my forms back in December- and have just been told I am now being put into MARP process. We have saved enough to cover outgoings for the 5 months but we wont have enough saved to cover the mortgage payments and want to take the maximum time possible with baby. 

Due back in work in March so not going to know in time now to let them know as they said it will take another 10-12 weeks. 

Surely taking time for maternity leave shouldnt have to go through MARP??? If your credit rating is affected is that not discrimination on the grounds of gender for taking maternity leave??

So angry with them right now and thinking of closing all our accounts with them too.


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## Emmaf (10 Jan 2014)

Hi Laoibhise

AIB never responded to us even when we sent letters of complaint asking for clarification.

Our complaint is now with the Financial Ombudsman.  I'm happy let you know what happens.  We were given a lot of incorrect information throughout the process, such as 'there are two moratorium lists - a good one and a bad one!  You will be on the good one!'  Yet When we asked for clarification in writing no one could provide this.  So frustrating.  It appears they make it up as they go along.  

Emma


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## Emmaf (10 Jan 2014)

ps: Laoibhise, Congrats on the little one


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## dub_nerd (11 Jan 2014)

laobhise said:


> Surely taking time for maternity leave shouldnt have to go through MARP??? If your credit rating is affected is that not discrimination on the grounds of gender for taking maternity leave??
> 
> So angry with them right now and thinking of closing all our accounts with them too.


 
It is not "taking time for maternity leave" that is going through MARP. It is not paying your mortgage according to the schedule you agreed with the bank when you took out the loan. The bank doesn't care if you're taking time for maternity leave or taking time for a trip to Mars. Are you actually serious that you think your gender entitles you to not pay your mortgage on time??!


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## laobhise (20 Jan 2014)

Thanks Emmaf- will keep fingers crossed. 

dubnerd- the point is  that women are entitled by law to take 16 weeks of unpaid maternity  leave after a baby but if you have a mortgage as most families do then  how can you possibly avail of this entitlement unless your salaries are  high enough to be able to save 4-5 months of salary. Banks used to  understand this and once you could show that you could meet the  increased payment after the leave it was fine- as per my first. Its not  like I want a holiday from my mortgage to spend money on myself. The  first year of your babys life is a very special time and being with your  baby for those extra 16 weeks has been shown to be beneficial for baby.  I just want to do the best for my child. If women arent facilitated to  take these 16 weeks through a moratorium then I cant see how most  families with mortgages can afford to take this entitlement. Should the  16 weeks only be for women whom dont have mortgages or whose salaries are high enough to  facilitate them to save for this time??


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## wbbs (20 Jan 2014)

Of course you are entitled to take it in law but that is of course going to be dependent on an individual's financial situation like lots of things are.

I was a mortgage adviser for many years and I honestly can say this was not a common reason for a payment break request or at least I did not come across many.   Some mortgage types had facilities where you could pay 10 payments instead of 12 thus skipping 2 months of your choosing but it was not the same as a payment break.   

The sad fact of life is that yes these 16 weeks unpaid are only if you can afford them, there are several young children and babies in my extended family and none of them took the unpaid leave as they needed the income.   This is not the bank's fault or anything they have to facilitate, it is something you as parents have to plan for.   Might sound harsh but that's the business reality.


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## dub_nerd (21 Jan 2014)

laobhise -- I understand the point you are making, but I wonder has  your view been coloured by the fact that banks did all sorts of things in the so-called Celtic Tiger years that were far from normal. I got quite used to hearing acquaintances talking about how they would automatically get top-up loans for furnishings etc. on top of 100% mortgages. I hadn't heard of payment breaks for maternity leave, but perhaps they were _de rigueur_ then too. After all, it was in the banks financial interest to extend your payment terms, in the days when they had money to lend and didn't consider any risk of default. (A payment break is essentially a top-up to a loan). But equally, those days clearly ended quite some time ago. I completely agree with you about the benefits to babies of having that extra time, but unfortunately -- as wbbs said -- there's nothing requiring anyone to help fund it.


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## Emmaf (17 Feb 2014)

Hi, I just wanted to share the update of our situation with you.  Many thanks to those who assisted along the way.  

We took our complaint to the Ombudsman.  The bank were given 15 working days to issue us with a final response.  They didn't, so we contacted the Ombudsman to relay this.

Within one week from this date we received a letter from the bank stating as follows:

'...Your request for a moratorium was submitted to our Arrears Support Unit (ASU) in error as the colleague who submitted the request was not aware that it should have been processed under normal business terms.  As a result of this error your application was assessed and approved under the Mortgage Arrears Resolution Process (MARP).  Due to this processing error your account was flagged as a MARP account, which was not correct.  I confirm that we have amended your records accordingly and your account no longer reflects a MARP status.  I confirm your account will no longer report as a MARP account and I assure you that there has been no adverse effect internally or externally to you.....'  The letter ends with a recognition of incorrect processing and delays to us and a compensation offer of €250.

We also requested under Section 4 of the Data Protection Acts 1988 and 2003 for copies of transcripts of calls in relation to our account.  We received a letter to go to the local branch and collect this information.  There was quite an amount of information pertaining to our initial mortgage application - no transcripts of calls at all though.  I will still be requesting these.  

However I just wanted to share this in case it can assist anyone else, in what has been a hugely stressful ordeal.

Emma


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## MirandaO (13 Mar 2015)

Thank you Emma for sharing your experience.  This has helped us greatly as we have found ourselves in the same position and we are now going to go through the Financial Ombudsman also as we cannot get a confirmation from AIB Bank that we are entitled to have our application processed under normal business terms without being flagged MARP.  Can you give us the address or name of who signed your letter from the ASU?  It may help us saving time with the process.  Much appreciated.

Miranda


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## AlbacoreA (13 Mar 2015)

Emma, did you get anywhere with the payment holiday, or did you give up on that idea.


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## AlbacoreA (13 Mar 2015)

I assume a bank doesn't have to give you payment holiday unless its in your contract?


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## MirandaO (25 Mar 2015)

AlbacoreA said:


> I assume a bank doesn't have to give you payment holiday unless its in your contract?


Yes Emmas letter states that it was assessed and approved.


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## AlbacoreA (25 Mar 2015)

I thought it said their application was accessed and approved. Not explicitly that its in their contract.  Though I agree its logically to assume this is indeed the case. 

I was asking though in a more general sense for other people. As I've read previous discussions where the working of the "payment holiday" has been contested by the bank.


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