Fianna Fail calls for vulture fund regulation
Political opposition to the selling off of distressed mortgages deepens.
Fianna Fail has called for new laws to regulate vulture funds as a second bank announced it may sell off millions of euro worth of mortgages.
The party’s finance spokesman Michael McGrath said swift action is needed to ensure that such international investors are fully monitored by the Central Bank ahead of any loan portfolio sale.
Ulster Bank is the second bank to announce a sale of distressed loans with 7,000 loans in arrears being offered.
Chief executive Gerry Mallon said the bank was setting aside 68 million euro for a deal that it may sell the mortgages to foreign funds.
It follows deep criticism of Permanent TSB’s decision to sell off loans linked to 14,000 private homes as part of a portfolio worth 3.7 billion euro.
The case for full regulation of these vulture funds is compelling Fianna Fail's finance spokesman Michael McGrath
Finance Minister Paschal Donohoe has previously said the Government cannot prevent the sales but that he is deeply aware of homeowners’ concerns. Laws on repossessions are being reviewed as a result.
But Mr McGrath said: “The case for full regulation of these vulture funds is compelling.
“If the fund buys a mortgage, a farm loan or an SME loan, it makes all the crucial decisions about the future of that loan. Despite this, the vulture fund is untouchable, unaccountable and entirely beyond the reach of the Central Bank.”
Fianna Fail is to introduce new legislation on regulation next week.
Mr McGrath also called for the 2013 Code of Conduct on Mortgage Arrears to be reviewed. He said 38,000 family home mortgages now owned by non-bank entities, including over 11,000 by unregulated vulture funds.
“Mortgage holders who are fully honouring the terms of a restructuring agreement need greater protection,” the opposition spokesman said.
“The fact that vulture funds do not have to offer some of the main restructuring options such as arrears capitalisation, term extension or split mortgage places distressed borrowers whose loans are with them in a perilous position.”