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Leah Farrell
fair mortgage bill

'It's your job to call the vulture funds out': High Court Master pens letter to Micheál Martin

Edmund Honohan urged the Fianna Fáil leader to support a piece of legislation he wrote that is currently before the Dáil.

THE MASTER OF the High Court has written to Fianna Fáil leader Micheál Martin, urging him to support legislation aimed at keeping people in their homes. 

Edmund Honohan wrote the Affordable Housing and Fair Mortgage Bill, which was introduced in the Dáil last year by Fianna Fáil TD John McGuinness. Although McGuinness introduced the bill, it is not clear whether his party colleagues will support it. 

In a letter sent to Martin at the end of December, the High Court Master said neither he nor the Taoiseach had come up with “any plan of action” to tackle the housing crisis at its root.

The long drawn out saga of [Kevin] Boxer Moran’s bill and Michael McGrath’s increased regulation provisions suggest to the observer that the government is only toying with these ideas (and watering them down in transit) hoping the overarching objective of bank insolvency is reached before legislation is passed.

Honohan was referencing a private members’ bill that had been introduced by the party’s finance spokesperson Michael McGrath. The bill was signed into law on Christmas Eve. 

Under the new legislation, vulture funds can now be investigated by the Central Bank and the regulator can take enforcement action against them. 

In speaking about banks and vulture funds, Honohan tells Martin “it is your job to call them out”.

“It appears that the government has now caved to the vultures and quietly abandoned its earlier Mortgage to Rent model. Remember when Leo, in opposition, said he’d not pay another red cent to the junior bondholders?

Allowing the VFs [vulture funds] to make tax-free windfalls creates years of unnecessary extra capital outflow when the country has Credit Union and not-for-profit resources it could easily tap instead. Another bondholder-type surrender!

“It’s past time that you re-engage with the Fair Mortgage Bill. Do not make the mistake of dissing it just because Deputy McGuinness is promoting it. Please look beyond that.”

Christina Finn / YouTube

The Affordable Housing and Fair Mortgage Bill brings together a number of pieces of Irish and European law to reinforce them. It also proposes the establishment of a ‘national affordable cooperative housing exchange’, which would allow not-for-profit housing providers to buy distressed loans and lease the properties to the borrower. 

The bill also covers the provision of housing by not-for-profit, non-state entities with ethical funding. And it provides for a reconfiguration of the government’s Abhaile scheme – which currently provides vouchers for legal or financial advice – to broaden its services. 

Honohan in his letter suggests Martin is  “perhaps worried that mortgagors in arrears who are turned into tenants under the Mortgage to Rent proposal are, in some way, freeloaders and not ‘respectable’”.

Are all now tarred with the strategic defaulter tag merited by a small minority? Are they all “deplorables” in a bourgeois consumer society and to be left to the thin options in the insolvency system?

“The immediate question for policy makers is: given the current shortage of housing, are there families in mortgage arrears (or tenants of landlords in arrears) who should NOT be evicted? Which families?” he asks. 

Last month Fianna Fáil did criticise the Taoiseach after he commented that vulture funds often offer better write-downs on loans than banks. Leo Varadkar also said at the time that he is reluctant to use the term “vulture fund” because he believes it is a “political term”. 

At the time Michael McGrath said the comments were “really quite bizarre and underline how out of touch he is with the reality facing thousands of families across the country”. 

“Many of the deals referred to by the Taoiseach entered into by these vulture funds involve the loss of the home, the farm or the business.”

Fianna Fáil declined to comment on the content of the High Court Master’s recent correspondence. 

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