I’ve fallen behind with my mortgage repayments and the bank has asked me to fill out an “SFS Form” before they will consider an alternative repayment schedule. What exactly is this form and how do I complete it?
Mortgage repayment problems are a source of significant stress and anxiety for homeowners and you are certainly not alone in this difficult situation. According to recent Central Bank data, 10.2% of residential mortgages were in arrears of more than 90 days at the end of March 2012.
The Central Bank’s Mortgage Arrears Code sets out specific procedures a lender must follow when borrowers fall behind with their repayments. Your lender must consider each case on an individual basis and make every effort to assist you in meeting your mortgage obligations. As long as you are cooperating fully with the bank, they may not apply to the courts for a repossession order on your home for a period of at least 12 months from the time you first fall into arrears.
The Standard Financial Statement (SFS) that your bank has requested is an industry standard form used to gain information about your financial circumstances. It will provide your bank with a better idea of what you can afford to repay each month and enable them to determine the best course of action for you. The form asks for details of your mortgage, your monthly income and expenditure, your assets, any other debts and the reason you require a mortgage review.
Your bank must help you to complete this form and will already have a lot of the required information on file. Make sure you complete the form honestly, as otherwise you may be seen to be “non-cooperative” and the 12 month moratorium on your bank applying for repossession will no longer apply.
Your completed SFS will then be reviewed by the lender’s Arrears Support Unit, who will take into account all circumstances relevant to your particular case before making a decision. As well as the information on the SFS, they will consider your personal circumstances, your total indebtedness, your current repayment capacity and your previous repayment history. Although they are not obliged to restructure your repayments, most lenders will if you are doing your best to cooperate with them.
If your lender is unable to reschedule your repayments, they must give full details of the reasons for this in writing and notify you of all other options available to you. There is also the possibility that you may feel you can’t accept the arrangement they have offered. In both these cases, you have 20 business days from the date that you’re notified of the lender’s decision to make an appeal through their Internal Appeals Board. If you are unhappy with the results of this appeal, you can then take your case to the Financial Services Ombudsman.
You have already taken the crucial first step when facing mortgage arrears, which is to make contact with your lender to discuss the situation. Allowing arrears to build up will only make the problem worse, so it’s important to keep communicating with your bank. The sooner you engage with them, the sooner you can identify the best way to get back in control of your finances.