Government aware of homeowners’ PTSB planned mortgage sale concerns – minister
The minister said the Government will review the laws on repossessions.
Finance Minister Paschal Donohoe has said he is deeply aware of homeowners’ concerns over the proposed sale by Permanent TSB of millions of euro worth of mortgages to vulture funds.
Mr Donohoe said the Government will review the laws on repossessions following criticism surrounding the bank’s plans.
The bank intends to sell loans connected to 14,000 private homes in an effort to reduce the number of non-performing loans on its books.
The home loans make up the majority of the 18,000 mortgages it intends to sell as part of a portfolio worth 3.7 billion euro.
The minister said the board of the bank has moved ahead with the process and does not need his consent to do so.
“I’m deeply aware of the concern and vulnerability that many may feel as a result of the announcement by Permanent TSB,” Mr Donohoe said.
“What I also have to be conscious of is that we have a Central Bank regulator that is saying to Permanent TSB that it needs to reduce its non-performing loans.”
It is essential that for the long-term health of Irish banking that we have a third bank that is sustainable and is secure Paschal Donohoe, Finance Minister
He added that the bank has one million customers and has deposits worth 17 billion euro.
“It is essential that for the long-term health of Irish banking that we have a third bank that is sustainable and is secure,” he said.
“As against that of course I appreciate the concern that people feel about this announcement and that loan owners in particular feel and I’m really acutely aware of that.”
The Government owns 75% of the lender on behalf of the Irish people.
The minister made the comments as a protest took place at one of PTSB’s main Dublin city centre branches in opposition to the threatened sale of the loan portfolio.
Sinn Fein’s Pearse Doherty said there is massive public concern at the proposals.
PTSB have an obligation to answer questions from TDs and senators being contacted by concerned homeowners Pearse Doherty, Sinn Fein finance spokesman
The finance spokesman called for the bank to be brought before an Oireachtas committee next week.
“PTSB have an obligation to answer questions from TDs and senators being contacted by concerned homeowners, all the more so as this is a bank owned by the people,” Mr Doherty said.
Amid calls from opposition parties for proper regulation of funds, PTSB said the loans would be covered by the Central Bank’s code of conduct for mortgage arrears.
It is not a tenable position that the organisation controlling your loan ... is allowed to be beyond the reach of the Central Bank. Michael McGrath, Fianna Fail finance spokesman
Fianna Fail finance spokesman Michael McGrath said any organisation that owns a loan, be it a mortgage, farm loan or SME loan, should be properly regulated and accountable.
“It is not a tenable position that the organisation controlling your loan and making all the important decisions concerning it, is allowed to be beyond the reach of the Central Bank,” Mr McGrath said.
He added: “It is a simple truth that these so-called vulture funds have no interest in entering into long term restructuring arrangements in relation to your loan.
“In fact, they are straight up about the fact that they do not offer these solutions. That is because they have a different business model and they have no interest in working out a loan book over a long time horizon.”
Taoiseach Leo Varadkar said the Government is looking at whether existing regulation needs to be amended.
“It is already the law that any loans that are sold on to another company can only be sold to a company that is regulated or has an agent that is regulated,” Mr Varadkar said.
“And we are considering whether we need amend the law to strengthen regulation in this area.”