Fianna Fáil Spokesperson on Finance Michael McGrath TD has said the Central Bank’s review of the Code of Conduct on Mortgage Arrears published yesterday proves that so called ‘vulture funds’ place a greater reliance on short-term mortgage restructuring arrangements than mainstream lenders.
Deputy McGrath said the Central Bank has missed a golden opportunity to bring these funds to heel and introduce a level playing field for all mortgage holders in arrears.
Deputy McGrath, “Contrary to the spin that was put out before the publication of the report, the actual report confirms that these unregulated loan owners place a greater reliance on short-term restructuring options than banks or retail credit firms. The report also confirms what many of us who help borrowers already knew – that these funds are willing to sign up to a narrower set of restructuring solutions than banks.
“It is disappointing but not surprising that the Central Bank is not willing to review Section 39 of the Code of Conduct on Mortgage Arrears (CCMA) which only requires loan owners to consider the restructuring options from the suite of options offered by that firm. This provision allows vulture funds to cherry pick the alternative repayment options they wish to offer and are not obliged to even consider all options. In effect, they can ignore the main restructuring options if they wish and the Central Bank still deems them to be fully compliant with the CCMA and the Mortgage Arrears Resolution Process.
“Data released by the Central Bank to the Oireachtas Finance Committee earlier this year reveals that unregulated loan owners, or vulture funds, have provided only 6% of all restructure arrangements between April 2017 and March 2018. This is despite the fact that they own 10% of all loans in arrears and 19% of all loans in long term arrears.
“Fianna Fáil has consistently stated that adequate consumer protections should be in place to tackle the mortgage arrears crisis. Fianna Fáil brought forward legislation to regulate vulture funds and this Bill is set to pass by the end of the year,” concluded McGrath.