Fianna Fáil Spokesperson on Finance Michael McGrath has criticised today’s announcement by Ulster Bank that it has agreed terms on the sale of a mortgage book to US vulture fund Cerberus and has said in effect the bank is outsourcing the enforcement activity on these loans.
Deputy McGrath commented, “While it is certainly the case many of these mortgages have been deep in arrears for some time, the net effect of the transaction remains that another bank is outsourcing its dirty work to a US vulture fund. What tools does Cerberus have at its disposal for dealing with these loans that Ulster Bank doesn’t have? The bottom line here is the banks and the Government are simply washing their hands of the problem.
“Having seen the way Cerberus treats many of the commercial borrowers whose loans it bought through the various Promontoria vehicles, it is hard to see many of these mortgage holders managing to successfully negotiate a restructuring solution with them.
“It is not clear from the Ulster Bank statement whether these mortgages are being bought by a regulated or unregulated entity and this is something the bank needs to clarify. Under the Fianna Fáil legislation that is at Report Stage in the Dáil, whoever will be calling the shots on this portfolio and making the key decisions will have to become regulated by the Central Bank if they are not already.
“The sale again underlines the abject failure of government to put in place a safety net in the form of a properly functioning mortgage to rent scheme for borrowers where a mortgage restructure is deemed not possible.”