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Buying back your IBRC mortgage: what we don't know

The Irish Mortgage Holders Organisation says its members’ needs have been considered last.

Image: Eamonn Farrell/Photocall Ireland

IF YOUR MORTGAGE was taken out from Anglo Irish Bank or Irish Nationwide, you could soon have the chance to buy it back.

That’s one of the ways the Government are considering to dispose of the several thousand mortgages that are still with IBRC.

Background

The plan first came to light last week after the Government announced that the IBRC was repaying the State €12.9 billion.

As part of that deal, it was also decided that the remainder of the loans will be sold off without going back into NAMA, as was originally the plan.

These are the loans that haven’t been sold off to international investors like Lone Star, or other private equity funds that have been eagerly snapping up Irish assets.

Most of them are domestic mortgages, and most aren’t in arrears.

Buy back special

It was reported last week that one of the options being considered by the Government is allowing these mortgages to be ‘bought back’ by the people who originally borrowed from one of the bailed-out financial institutions.

In practice, this would mean getting another mortgage from another bank, and transferring the debt across.

TheJournal.ie talked to Stephen Curtis of the Irish Mortgage Holders Organisation about what the deal could mean for borrowers.

“It does throw up a number of challenges – first, would mortgage holders be able to raise the finance? If their house is in negative equity, would a bank give you negative equity mortgage? Would you need a deposit?”

He criticised the selective leaking of the plan to some newspapers, saying it is another example of the needs of mortgage holders themselves being considered last when solutions to the issue of the IBRC loan book are being considered.

“There is a cohort of vulnerable borrowers…and all the way along, the common thread is that they don’t know what’s happening, they don’t know the set of potential resolutions that the lender is going to give them.”

He said that the possibility of buying back your own mortgage will be good news for a small subset of people with the liquidity and positive credit rating to make it an option for them.

“For anyone with the ability to raise finance, this will be good news, but needs to be done in a structured and organised way, not read in a newspaper.”

He said that “there needs to be a level playing field for everyone from the smallest mortgage up to the biggest corporate borrower.”

Curtis argued that those who can’t afford to buy back their mortgage – in other words the most vulnerable, he says – could be left at the mercy of what he calls “vulture funds”.

Ultimately, no decisions have been made about how the remainder of the loan book will be dealt with, but the waters seem to have been muddied even more by the suggestion that holders themselves could buy them back.

Curtis summarises: “It’s added more uncertainty for anyone who has an IBRC mortgage. Without explaining how it works, it’s not helpful.”

Honohan ‘not happy’ about mortgage sales to vulture funds>

The government has sold thousands of mortgage holders ‘down the river’ – Donnelly>

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About the author:

Jack Horgan-Jones

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