Cabot Financial

Taoiseach asks for details about letters sent to mortgage-holders demanding full payment of arrears within 30 days

Taoiseach has said it is now time for to review the tax treatment of vulture funds.

TAOISEACH LEO VARADKAR has asked for details to be passed on to him in relation to letters being sent to mortgage-holders demanding full payment of their arrears within 30 days.

The case, first published by, relates to Cabot Financial Ireland Limited, the debt collection agency, which was appointed by Promontoria Scarriff Designated Activity Company as the regulated entity responsible for dealing with its mortgage administration.

Last year, Ulster Bank sold a loan book portfolio, known as Project Scariff, worth €1.6 billion.

It consisted of €900 million of owner-occupier loans across 3,600 accounts and €700 million of buy-to-let (BTL) mortgages across 2,900 properties.

Pay up in full 

Correspondence seen by shows that Cabot has written to a number of borrowers who are behind in their payments, demanding that all arrears be cleared within 30 days.

This has been confirmed by the Central Bank of Ireland, which said in a statement: 

The Central Bank is aware that a regulated entity has written to a number of buy-to-let borrowers in arrears.

The letter, seen by this website, sent to mortgage-holders indicates that if they fail to pay up the full amount they owe, Cabot will have “no other option but to appoint a Receiver over the secured property”.

Sinn Féin’s Pearse Doherty raised the issue with the Taoiseach today during Leaders’ Questions stating that some of these people are only €3,000 in arrears.

“It is precisely because of the actions of Cabot Financial Ireland that people fear their loans being sold to vultures. Does the Taoiseach stand over this practice or does he now agree with Sinn Féin that it is time to clip the wings of the vultures?” he said. 

Doherty added:

I have received correspondence from a number of those mortgage holders which shows that they were in very small arrears, in some cases less than €3,000. The statement they got from the vulture fund demanded full payment, not just of the arrears but of the entire loan. They are being given seven days to make the payment, and to come up with hundreds of thousands of euro in some cases.
Some of the borrowers have serious health concerns in their households and the vultures which are sending the letters know about these concerns but they continue to issue the letters and the demands without any regard to what is happening. They are paying no regard to the fact that arrears are less than €3,000 in some cases and they are not facilitating any arrangements with borrowers.

Doherty said it is not just borrowers who are affected by the issue, stating that when a fixed-asset receiver is appointed, the tenants in these houses will be “turfed out onto the street”.

“Two sets of lives are being destroyed as a result of this policy and it is utterly chaotic for the families involved. It runs roughshod over any level of common decency in the way vultures and banks should be dealing with customers in arrears.

“All of this is a direct consequence of government policy, which is to roll out the red carpet to these leeches,” he said.

Review tax treatment

Varadkar said he did not know the specific details around the case but said:

“It is now time for us to review the tax treatment of property investment funds”. 

Finance Minister Paschal Donohoe is to carry out a review of their tax treatment in advance of the budget in October, said Varadkar, who added the review is being done “given that the picture has changed so much”.

“That is the prudent thing to do. Tax incentives are brought in at a time to stimulate particular activity but are then removed at a later period when they are no longer necessary. That work is being done at the moment by the Minister, Deputy Donohoe, and the Department of Finance,” added the Taoiseach.

Speaking about the specific case involving Cabot Financial, Varadkar asked Doherty to pass on the details to him, stating:

I do not have access to the information the Deputy has. If he would like to pass on that information about those particular issues that he is raising, I would be happy to have it inquired into, but having not known that he was going to raise this issue and having not to hand any of the information that he seems to have, needless to say I cannot comment on this in any meaningful detail. However, if the Deputy is genuinely concerned about those people – I am sure he is – I would be very happy for him to pass that information on to me.

Doherty said the government has designed a tax system that incentivises the funds to buy loans, which the banks “are more than happy to offload despite the dire consequences for the borrowers”.

He added that many vulture funds are now structuring their arrangements in such a way that they pay no tax at all in this State.

Doherty said the behaviour of calling in full arrears when in just 30 days was “absolutely disgraceful”.

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