A politician who met the promoter of a private trust — which has recently accepted hundreds of properties from distressed borrowers — believes its bid to thwart lenders is a scam.
Fianna Fáil senator Thomas Byrne said he discussed the Kilkenny-based trust with its operators and was told more than 1,000 debtors had placed their properties into it.
It was already reported that at least 600 landholders had put their assets into the private trust since it was opened up by businessman Charlie Allen late last year.
Those who have joined the scheme include a number businessmen — including Bill Cullen.
However, Mr Byrne said he was not convinced by the loophole which the trust claims to have spotted in mortgage documents.
“The scheme purports to put mortgages into a private trust and thereby take them away from the banks and take them away from the ability of the banks to repossess properties. I met one of the promoters of this scheme here in Leinster House on Tuesday and I am deeply suspicious of the scheme,” he said. He used absolute privilege available to members of the Seanad to make the comments.
Word of the trust has spread nationwide and seen people queuing at meetings to sign their assets into it.
People then lease their properties back from the trust for a nominal sum.
Larger debtors and those with commercial loans contribute up to 10% of outstanding debts to the trust in order to protect their assets.
Mr Byrne said the trust charges people €250 to enter the scheme on the assumption that they can avail of an apparent flaw which has been spotted in mortgage deeds. This is supposed to be designed to stop banks and other lenders from getting at the assets with repossession orders.
“I asked for details of this flaw. The promoters refused to divulge the details of the flaw to me. I was also told this scheme operates on a referral-only, or invitation-only basis... the promoters in fact told me they signed up in the low thousands [of subscribers] to this scheme,” he said.
Mr Byrne also said his meeting with the trust broke down when he said he was associated with the work of the New Beginnings group.
But the trust’s attitude increased his suspicions. “The secrecy, the fee, the unknown legal basis, the clamming up when the New Beginnings organisation was mentioned have led me to believe that this scheme has all the hallmarks of a scam. And I want to urge the public to be wary of this.”
When contacted by the Irish Examiner the operators of the trust said they may comment on Mr Byrne’s allegations next week.
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