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Sell-Off of Mortgages to Vulture Funds

Peter McVerry Trust, the national housing and homeless charity has said it is concerned by the announcement from another Irish bank, Ulster Bank, that it has sold more than 5,000 mortgages to a vulture fund. The charity said the move, together with a recent larger sale by PTSB, would inevitably lead to more cases of homelessness and bring greater dysfunction to an already chaotic rental and housing system.

The charity’s CEO Pat Doyle said “This latest announcement is as stark reminder that for tens of thousands of people in Ireland the financial collapse is not a distant memory but a daily reality. Today’s news that Ulster Bank have sold over 5,000 mortgages to another vulture fund comes just days after PTSB announced the sale of over 10,000 mortgages. Regardless of whether these are people’s principal dwellings or whether they are tenanted buy-to-lets, they are people’s homes and they are now at a greater risk of losing their home than they were before these sales.”

“The scale of these sales must be appreciated and understood. A conservative estimate is that 40,000-50,000 people have been impacted by the decisions taken by PTSB and Ulster Bank in recent days. It is an enormous issue and one that cannot be underestimated.”

“These recent decisions are obviously financial ones that may be positive for the financial entities involved but they will undoubtedly have negative and widely felt consequences for the people impacted and Irish society for years to come. Given the scale of the properties linked to these mortgages it will be inevitable that moves by the vulture funds to gain the greatest possible return will lead to further inflation in rent and property prices in a volatile market. At a time when our housing system is very fragile these massive sell offs will do little to bring the stability we need into the housing system.”

“Peter McVerry Trust fully understands that the debt owed to the banks has to be dealt with and also accepts that many mortgages are beyond saving. However, this is not the time nor the manner in which to deal with these distressed mortgages. At the very least there needs to be time given to allow the hard work undertaken as part of the Rebuilding Ireland strategy to kick in otherwise we are simply creating an even bigger housing and homelessness problem at a critical juncture in the efforts to fix the housing system.

Mr Doyle urged the Minister for Finance, Paschal Donohoe TD to meet with the banks “It’s clear that the measures in place to deal with mortgage arrears aren’t working and we must do more to support people to arrive at sustainable solutions. There simply cannot be a scenario where we watch the financial institutions do deals that the Irish exchequer is once again left to deal with the consequences.”