Thousands of ordinary mortgage holders around the country have been left isolated and vulnerable following the sale of over half the IBRC mortgage book to two US hedge funds, according to Fianna Fáil Finance Spokesperson Michael McGrath.
Deputy McGrath was speaking following confirmation by the IBRC Special Liquidator that 64% of the loans by value had been sold to Lone Star and Oaktree Capital.
Deputy McGrath stated, “The voluntary compliance of these funds with the Code of Conduct on Mortgage is no substitute for the legally binding and enforceable protections that other mortgage holders in Ireland benefit from. This voluntary compliance has no legal standing whatsoever and is utterly unenforceable. The question for the government is: if a customer in this situation believes the Code is not being honoured, who do they turn to?
“The bottom line is that these US funds are unregulated in Ireland. This leaves the mortgage holders is a very vulnerable position. Without the statutory backing of the Code of Conduct on Mortgage Arrears, the fund would be perfectly within its legal rights to demand full repayment and initiate legal proceedings on a mortgage holder that misses one repayment.
“By allowing this sale to proceed and denying the mortgage holders of their legal rights, the government has sent a signal to the other banks in Ireland that the sale of mortgage books in this manner is now fair game. I continue to believe that legislation on this issue is urgently needed and certainly cannot wait until 2015 as the government is planning.
“The IBRC mortgage holders have been very badly let down by the government. They are now relying on the kindness of strangers. NAMA will now probably end up with over a third of the IBRC mortgage book and this also raises issue in terms of NAMA’s capacity to deal with a large number of individual mortgage cases.”