Mortgage functions for these with diabetes ‘delayed for as much as 12 months’

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Mortgage applications for people with diabetes are on hold for six or twelve months because mortgage protection has been turned down, the Dáil has heard.

Finance Minister Paschal Donohoe pledged to deal with banks in cases where borrowers cannot get their mortgages because they are denied mortgage protection insurance for health reasons that could make them more susceptible to Covid-19.

He told Sinn Féin’s financial spokesman Pearse Doherty that the issue had been raised by a number of TDs and constituents over the past few days.

“Although I cannot instruct the banks on this, I will contact them on this matter because I know, at such a difficult time for so many, that these decisions can make the situation even more difficult.”

Mr Doherty said there have been “heartbreaking” cases where “they basically bought the house and paid the bail”. The mortgage is approved and you fall at the very last hurdle.

“But they not only fell, they lost the house, they lost the bail and the law allows the bank to make an exception in this case.”

The Donegal TD said “the insurance industry needs to look at their policies and what happens when people have diabetes”.

He said this was raised a lot with TDs. “If you have diabetes, many providers defer applications for six or twelve months and that needs to be addressed,” as provided for in the Consumer Credit Act.

Mr Donohoe said the lender could, in most cases, legally require an applicant to purchase mortgage protection insurance before granting a mortgage.

In certain cases, however, such coverage is not necessary or inadequate and the law provides for “a number of limited exceptions”, for example where the borrower is “part of a group of people”.

Mr Doherty asked the Minister to raise the issue with the insurance industry as well, as some banks owned insurance companies.

“The Bank of Ireland has its own insurance company that does not provide mortgage protection for anyone who has had symptoms of Covid in the past three months. You keep them on hold for at least a month. “

The minister said “I appreciate the hardship it is causing” and planned to look into the matter further, “with the banks and why individual decisions can be made and to see if there are political ramifications”.