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Sunday 1 October 2023 Dublin: 17°C
Mark Stedman/Photocall Ireland
# mortgage sale
Ulster Bank sells off nearly 4,000 of its customers in massive family home loan book sale
90% of the loans due to be sold are family homes – about 3,200 accounts.

ULSTER BANK ANNOUNCED today it is selling off nearly 4,000 of its customers to a possible vulture fund. 

The bank confirmed this afternoon that plans are afoot to sell on another large portfolio of mortgages worth €900 million.

Unlike the last sell off of its customers, which was predominantly made up of buy-to-let properties, about 90% of the loans due to be sold this autumn are family homes – about 3,200 accounts.

The bank states these loans are worth about €810 million. The other 10% are buy-to-let  properties, about 400 accounts in all, worth a combined total value of €90 million.

An Ulster Bank spokesperson said the bank classes these loans as “non-performing mortgages”. 

The spokesperson stated that “following a concentration of effort with customers in difficulty to ensure that they were given every opportunity to agree a sustainable solution and to remain in a home that they can afford… the continued extension of forbearance cannot unfortunately be maintained”.

“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,” concluded the statement. 

There has been previous debates about who or what entity is obliging banks to offload their loans, with some, such as Finance Minister Pashcal Donohoe stating that the European Central Bank has demanded that banks reduce the level on what it calls ‘non-performing’ loan book.

However, last March, Fianna Fáil published a letter from the ECB which states there is no directive to improve bank loan books in this way.

Engaging with the bank 

Reacting to the announcement, Fianna Fáil’s Finance spokesperson Michael McGrath said: 

While none of the owner occupier mortgages are currently in a restructure arrangement, the customers concerned had been in on average five restructure arrangements with the bank. This points to the fact that most of these customers have been engaging with the bank but are simply unable to pay as opposed to being unwilling to pay.However, the bank has not said that these customers are not paying anything towards their mortgage.
By selling the loans in this fashion, the bank is taking the easy way out and has demonstrated little regard for the long-term welfare of its customers. It is my experience that these so-called ‘vulture funds’ are very difficult to deal with and have no interest in entering into long-term forbearance arrangements with mortgage holders.

McGrath that the number one priority of the regulators seems to be “to protect the health of the banks”.

“They have little concern about what happens to the customer once their loan is sold on by a retail bank within their remit,” he said. 

Political weakness

Sinn Féin’s Finance spokesperson said “once again, the vultures and banks are colluding to sell out thousands of Irish families. This bonanza for vultures is only possible because the government have given political support to vulture sales. Fine Gael are as responsible for this sale as Ulster Bank”.
He added that thousands of Irish families are facing the potential sale of their loans to a vulture fund and the government is actively encouraging it.
“The reality is that no loan, in arrears or otherwise, is safe under the current rules,” said Doherty, who added that his No Consent, No Sale Bill, which would prevent the loan sale without the permission of the mortgage-holder, to progress urgently.

“This is an important piece of legislation which will ensure that banks cannot sell on loans without the consent of the borrower,” he said. The government and the Department of Finance are staunchly opposed to the Sinn Féin Bill.

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