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Concern from homeowners as 13,000 IBRC mortgages to be sold

Deputy Stephen Donnelly appealed to the Finance Minister to allow families to bid for their own homes at market value.

Stephen Donnelly
Stephen Donnelly
Image: Oireachtas screengrab

THE GOVERNMENT HAS been called on to allow homeowners to buy their IBRC mortgages that are due to be sold.

The call came from Deputy Stephen Donnelly in the Dáil today, who pointed out that in a number of weeks the special liquidator of the IBRC, KPMG, is planning to sell more than 13,000 mortgages on the open market.

The mortgages were originally issued by Irish Nationwide.

Donnelly said he has spoken to families, who have told him they have two concerns about this.

The first is that they are not going to be allowed bid for their own mortgages. The mortgages are to be sold in batches of several thousand at a discount.

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Donnelly said that under the current plan, the discount on the mortgages will be “turned into profits for large financial firms rather than benefitting thousands of Irish families as it could”.

He said that the families’ second concern is that when their mortgages are sold, they “are going to be stripped of very important protections” from the Central Bank code of conduct mortgage arrears, and the Financial Ombudsman.

Bid

He said that Finance Minister Michael Noonan has the power to allow families to bid for their own homes at market value.

He asked the minister in October if he would exert that power, but “he refused”, citing advice that it would be more efficient to sell the mortgages in batches, said Donnelly.

Donnelly asked the Taoiseach about the issue, wanting to know if the homeowners in question should be allowed bid for their own mortgage at whatever discount is being offered to firms.

He also asked if Enda Kenny would introduce legislation that will guarantee all mortgage holders in Ireland the same level of protection from the Central Bank code of conduct of mortgage arrears and the Financial Ombudsman.

Responsibility

Taoiseach Enda Kenny said that the special liquidator has responsibility for how the assets of IBRC are sold.

He said that the decision to sell as part of a portfolio is “more efficient” and that interference by the State in these matters could lead to challenges from other creditors in the bank.

He added that the continued applicability of the Central Bank code of conduct of mortgage arrears in respect of IRBC’s residential mortgage protection depends on the regulatory statutes of whoever acquires the portfolio.

Minister Noonan had examined the issue in consultation with the Central Bank, said the Taoiseach. “It is a complex legal issue [that] will require some pretty careful consideration,” he said.

Kenny said that the outcome of the sale process will determine what needs to be done at that point.

Donnelly said that a “wait and see after the contract is signed” approach is not good enough.

“There is no trade-off between getting the best price for a mortgage and helping these families,” he said. “This is potentially a win-win [situation].”

“Would you at least take one more look and see if something can be worked out,” he appealed to the Taoiseach.

Read: NAMA redeems €750m in senior bonds from IBRC liquidation>

Read: Today is the deadline for bidders to buy IBRC loans>

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