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A 'difficult decision': Ulster Bank confirms it will sell 6,500 mortgages in arrears

Around 3,600 of the mortgages are private dwellings that have fallen in arrears.

Image: Sasko Lazarov/RollingNews.ie

ULSTER BANK HAS confirmed that it is to offload 6,500 non-performing loans from its books.

Loans totalling €1.6 billion encompassing 3,600 private dwellings and 2,900 buy-to-let mortgages are set to be sold off.

The potential for the sell-off had been mooted back in February, but has now been confirmed.

Concerns had been raised for both the homeowners who may be facing so-called vulture funds if the bank chooses to sell of their loans, as well as for tenants who may be left in limbo when the mortgage on the property they’re renting gets bought by such a fund.

In a statement, Ulster Bank described the move to sell off the loans as a “difficult decision” which “comes a decade after the financial crisis began and the continued extension of forbearance cannot be maintained”.

A spokesperson added: “Not all mortgages are sustainable and we are obliged to reduce the level of non-performing loans on our balance sheet. For mortgages that are not sustainable, additional forbearance will not bring them back to a performing position.”

It is understood that 73% of the private dwellings first went into arrears between seven and nine years ago, while three-quarters of the buy-to-lets have been in arrears for more than 12 months over the lifetime of the mortgage.

The average arrears on the private dwelling homes is €52,000 while the average on the buy-to-lets is €31,000.

In a statement this evening, Sinn Féin’s Pearse Doherty described the sale as “completely unacceptable”.

“I have no doubt these mortgages, the majority of them family homes, will end up in the hands of the vultures unless the sales is prevented,” he added.

Doherty said that there are realistic options that could be looked at instead, including the mortgage-to-rent scheme, split mortgages and write downs.

Speaking to TheJournal.ie in March, John Mark-McCafferty from housing charity Threshold said that renters could find themselves evicted through no fault of their own if a vulture fund buys the property they’re renting.

“The tenant has very few rights in the situation where a receiver moves in,” he said. “The receiver wants to monetise that loan. And regardless of how well the tenant has paid the rent, the receiver can evict them from their homes in a way they can’t with the homeowner.”

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Sean Murray

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