By Joe Leogue
The Irish Mortgage Holders Organisation is warning that Ulster Bank’s sale of €1.4bn worth of home loans to US fund Cerberus is evidence that even homeowners who fall behind in their mortgage repayments but engage with their lender can see their loan sold to a vulture fund.
IMHO chief David Hall has criticised the Government for not reacting to the news that Ulster Bank will sell 5,200 non-performing mortgages, 2,300 mortgages of which are on private homes. He said the deal will see “mass homelessness”.
Mr Hall’s comments come as a leading homelessness charity warns that the sale of such portfolios will eventually bring greater “dysfunction” to the housing system.
In announcing the deal, Ulster Bank said the mortgages involved in the sale have, on average, made three restructuring arrangements with the bank in the past.
Mr Hall said it is evidence that the issue facing mortgage-holders in arrears is an inability to pay, not an unwillingness to engage with their lenders.
“This proves customers are engaging and can’t pay,” he said.
Meanwhile, the Peter McVerry Trust said it is concerned that the sale of mortgage portfolios to vulture funds will “inevitably lead to more cases of homelessness and bring greater dysfunction to an already chaotic rental and housing system”.
Trust CEO Pat Doyle said: “This latest announcement is a stark reminder that for tens of thousands of people in Ireland the financial collapse is not a distant memory but a daily reality.
“Regardless of whether these are people’s principal dwellings or whether they are tenanted buy-to-lets, they are people’s homes and they are now at a greater risk of losing their home than they were before these sales.
“The scale of these sales must be appreciated and understood. A conservative estimate is that 40,000 to 50,000 people have been impacted by the decisions taken by PTSB and Ulster Bank in recent days. It is an enormous issue and one that cannot be underestimated.
“Given the scale of the properties linked to these mortgages, it will be inevitable that moves by the vulture funds to gain the greatest possible return will lead to further inflation in rent and property prices in a volatile market. At a time when our housing system is very fragile, these massive selloffs will do little to bring the stability we need into the housing system.”
Mr Doyle said the trust understands there are mortgages beyond saving and that banks must deal with their debt. “However, this is not the time nor the manner in which to deal with these distressed mortgages. At the very least there needs to be time given to allow the hard work undertaken as part of the Rebuilding Ireland strategy to kick in.”