Fianna Fáil Spokesperson on Finance Michael McGrath has said Start Mortgages must come before the Oireachtas Finance Committee to outline how they will deal with customers in arrears following today’s announcement that they are to purchase 10,700 non-performing loans from Permanent TSB.
Deputy McGrath commented, “Portfolio loan sales such as this are the easy way out for the banks as they strive to reduce their level of non-performing loans. It would be much better if Permanent TSB dealt with the loans itself and made case by case decisions involving restructuring the loans, writing off debt in some cases and only taking enforcement action as a last resort.
“While it is a positive at least that Start Mortgages is a regulated entity, there will be understandable concern among affected borrowers given its background as a sub-prime lender and the fact that it is owned by giant US vulture fund Lone Star. A key question is whether Start Mortgages will now offer a wide suite of restructuring solutions to borrowers in arrears.
“Lone Star has refused on several occasions over this past eighteen months to come before the Oireachtas Finance Committee. Having bought these loans, they now have an obligation to come before us and explain what their strategy is for managing them. When the Minister for Finance is consulted on this loan sale, he has to ensure Start Mortgages makes itself available for parliamentary scrutiny and oversight.
“In addition to the enactment of Fianna Fáil legislation requiring loan owners to be regulated by the Central Bank, we also need to see changes to the Code of Conduct on Mortgage Arrears requiring loan owners to consider all possible restructuring options – and not just the options considered by that institution. This would be a vital step to help those borrowers who are engaging with their lender to find a solution that allows them keep their home,” concluded McGrath.