Banks accused of ‘washing hands’ of problem mortgages

Banks accused of ‘washing hands’ of problem mortgages

Banks have been accused of washing their hands of mortgage problems and of treating borrowers and families like commodities.

Transport Minister Shane Ross made the remarks as he hit out over Ulster Bank’s sale of over 5,000 home loans to the American vulture fund Cerberus for €1.4 billion. This follows the sale of 7,400 private home loans by Permanent TSB to Start Mortgages, an affiliate of US firm Lone Star.

Mr Ross accused banks of “washing their hands of their problems” by selling non-performing loans to vulture funds.

“It’s absolutely unacceptable when people who are residents who live in their homes suddenly become commodities for a bank.

“[Banks] wash their hands of their problems by selling these loads off to vulture funds. Vulture funds behave in a very different way once they get hold of these loans... in a way which is utterly and totally unacceptable, which regards people in their home as numbers who just have to be basically screwed out of their money and ejected from their homes if necessary,” he told Newstalk radio.

Mr Ross said a bill is being introduced aimed at keeping people in their homes. This is being spearheaded by Independent Alliance colleague and OPW Minister Kevin Boxer Moran.

It will give judges the discretion to allow families stay in their homes under court decisions.

“And that will I hope get a fast track through the Dail.”

He said this would oblige judges to take into consideration not just the fact that people have defaulted on their mortgages but the fact they need to be in a home.

He said the Government supported separate Fianna Fail legislation to protect homeowners when it came to funds taking over mortgages.

Also we are supporting Michael McGrath’s bill, which imposes regulations on the owners of the loans as well. It is something deeply regrettable to me that people are now being regarded as… that people’s mortgages are now being regarded as kind of commodities, when in fact people depend on them for their livelihood and to remain in their home.

But other parties want stronger interventions to protect families.

Solidarity TD Mick Barry yesterday called for a mortgage-to-rent intervention scheme to be introduced to keep families in homes.

He called for measures to be taken to secure state ownership of properties with severe arrears and the rolling out a mortgage to rent scheme.

The Cork North Central TD said these measures are necessary to prevent “an explosion in homelessness” by renting to those who cannot repay mortgages:

“Vulture funds are only interested in making as much profit as quickly as possible by selling these properties at higher prices. The decision by Ulster Bank, PTSB and KBC to sell them is going to result in more children sleeping in Garda stations.

“Now is the time for action. The Government must introduce a mortgage-to-rent intervention scheme to prevent evictions and a spike in homelessness.

“The Government have failed the Irish people month in, month out on the housing issue but if they kowtow to the markets and refuse to act on this issue it may well be their biggest betrayal yet.”

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