Residential Mortgage holders
“In total 47,000 mortgages are in the hands of non-bank lenders. Many of these are home owners whose loans have been sold to vulture funds. The Fine Gael-Labour government botched the previous attempt to legislate in this area. The Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 was a cop out which left the key decisions relating to mortgages in distress in the hands of unregulated funds.
“We were left with a half-baked system whereby the servicing agent for the mortgage is regulated but the same requirement will not be placed on the actual owner of the mortgage. This anomaly must now be dealt with. The Dáil must also amend the legislation to ensure that any borrower who has entered in to a restructuring arrangement and who is sticking to it cannot have that payment structure arbitrarily cancelled by the acquirer of a loan or an agent operating on their behalf”.
“We would require Institutional landlords to give longer notice period in the case of multiple properties, to prevent a situation where a local market is inundated with tenants looking to rent properties. This would prevent a repeat of the situation currently taking place in Tyrrelstown. Where a vulture fund (or bank) appoints a receiver over a rented property, they should be required to take on all of the responsibilities of a landlord, including the obligation to return a tenant’s deposit in full”.
“The issue of SME loans being sold to investors is going to come to even greater focus in the weeks ahead as Ulster Bank plan to a loan book of up to €6 billion. Unfortunately there has been a familiar pattern is previous sales whereby investors buy loans at a substantial discount and use various strategies to trigger a default in the borrower’s loan, essentially a “loan to own” strategy. This results in the crushing of viable businesses with vulture funds able to shift massive short term profits to other jurisdictions in a clandestine and tax-free manner.
Vulture funds should not be able to appoint a receiver with almost no notice to the borrower. Borrowers should get sufficient notice that a receiver is to be appointed and, where a loan is called in, the borrower should be given a reasonable period of time to attempt to re-finance or re-structure the loan. In addition it is our view that the state owned banks should support firms who want to refinance with a mainstream credit provide. We will also prevent other predatory practices including significantly increased interest rates and unjustified increases in fees and charges,” concluded Deputy McGrath.