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Ulster Bank sold mortgages to vulture fund despite offer to buy loans for mortgage to rent

The vulture fund that bought the loans has confirmed it is not currently putting forward cases for this scheme.

Image: RollingNews.ie

ULSTER BANK INCLUDED a number of loans it had received mortgage-to-rent proposals for in its recent portfolio sale to a vulture fund, it has emerged.

Earlier this month the bank confirmed it had agreed to sell a portfolio of 5,200 mortgages, which it described as ‘non-performing’ to Cerberus.

CEO of the Irish Mortgage Holders Organisation and iCare Housing, an approved housing body, David Hall has flagged a number of cases he is dealing with where iCare had made a mortgage-to-rent proposal to Ulster Bank, but this loan was sold before the bank responded. This deal, if accepted, would have allowed customers to remain in their homes and pay rent to iCare. 

The Mortgage to Rent scheme is one of the options for people who are in arrears on their home loan. It allows an approved housing body or association like iCare to buy the loan from the bank and then rent it back to the original borrower so they can remain in their home.

Hall said iCare has made a number of proposals on behalf of Ulster Bank customers putting them forward for this scheme and in eight cases so far, customers have received letters telling them their loan was included in the recent sale.

Speaking to TheJournal.ie he said that because Ulster Bank has not agreed to give discounts in sales to iCare, it “would have made more money” on that individual loan by selling to the housing body.

“I don’t understand it. It is better for everyone’s sake – they receive mor money and it’s in the best interest of the customer because they stay in their home. This is a clear indication of their consumer policy.”

These customers are ineligible at this stage for any restructure, they are only eligible for mortgage to rent. Hall has also recently received correspondence from Promontoria, a subsidiary of Cerberus which now owns these loans, confirming it is not “at this time” putting cases forward for the scheme.

“We keep hearing that customers are protected even if they’re sold to a vulture fund, we’re told that vulture funds do mortgage to rent – it’s time to call a halt to all the lies,” Hall said.

These are just normal families in trouble. There is all this talk about customer not engaging but here they have engaged. The engagement level required to bring them forward for mortgage to rent is phenomenal. They have to go through the social housing system, the banking system, ourselves and the housing agency. These people are in the most vulnerable category and there was a solution there. Now they have no option. 

A spokesperson for Ulster Bank declined to comment on Hall’s claims. Cerberus did not respond to a request for comment.

At the time of the sale earlier this month, Ulster Bank said the average arrears among the 2,300 primary dwelling houses was €61,000. The bank had said it was a “difficult decision” to sell these loans.

“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.”

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