Irish Nationwide mortgage holders face being ‘thrown to the wolves’

Mortgage holders tied to loans with Irish Nationwide face being “thrown to the wolves” or unregulated firms and left without financial protection, it has been warned.

Fianna Fáil announced details of a bill yesterday to extend rights to borrowers if the loan books of banks are sold, which TDs said would take a number of small legislative changes.

However, one Government TD said any universal promise to protect borrowers whose loans are sold on may be legally unsound and leave the State open to compensation claims.

The disagreement centres around the upcoming sale of Irish Nationwide’s mortgage book. The former bank’s loans are now tied up inside the Irish Bank Resolution Corporation.

The loan book, which covers more than 12,000 borrowers, must be sold by IBRC’s special liquidator by the end of March or the loans will instead be transferred into the State’s bad bank, Nama.

As the law stands, customer mortgages can be sold to a third party not regulated by the Central Bank.

Such a sale for Irish Nationwide’s customers would “greatly expose those mortgage holders to very significant risks,” said Fianna Fáil’s Michael McGrath.

“If the mortgage is sold to an unregulated entity and if you get into any difficulty at all with a mortgage, they will be in position to move essentially immediately.

“These mortgage holders are being thrown to the wolves by the Government. It is completely unacceptable.”

Mr McGrath said data from last year showed half of Irish Nationwide mortgage holders were in difficulty.

The bill would also apply to the customers of any other financial institution whose home loan is sold to an unregulated third party.

Finance Minister Michael Noonan said he was open to looking at the proposals. A spokesman said he also wanted to see who was interested in the sale.

However, Fine Gael TD Simon Harris said any such protective move could leave the State open to legal action. “Implementing Fianna Fáil’s legislation could heap further costs at the feet of taxpayers, by leaving the special liquidator and the State open to legal challenge and compensation,” he said.

Earlier this week, Mr Noonan stated: “I will keep this area under review and have asked my officials to continue their assessment of the issue.”

More on this topic

Debt advocate Hall predicts ''end of road'' of mortgage sales to vulturesDebt advocate Hall predicts ''end of road'' of mortgage sales to vultures

Short-term mortgage offers attract but may cost more in long runShort-term mortgage offers attract but may cost more in long run

Mortgage approvals increase slightlyMortgage approvals increase slightly

Set aside 30% of housing developments for first-time buyers, FF saySet aside 30% of housing developments for first-time buyers, FF say


Lifestyle

AS Joaquin Phoenix rose to the podium to collect his Academy Award for Best Actor, ears were peeled as the actor made his speech about inequality and our disconnect with the natural world.Paul McLauchlan: Leading men lead the way on Oscars red carpet

She’s the Cork singer dubbed the next Kate Bush, shortlisted by Universal, the world’s biggest record label, as their artist to watch in 2020. This will be the year of Lyra, writes Ed PowerLyra: Meet the new Kate Bush - and she's from Cork

For relationships to endure, we need to be loving not just on Valentine’s Day but all year round, a Buddhist teacher tells Marjorie BrennanOpen hearts: The Buddhist approach to love and loving

More From The Irish Examiner