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Dublin: 11 °C Tuesday 19 March, 2019
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Ulster Bank to sell 5,200 'non-performing' mortgages to vulture fund

The portfolio, worth €1.4 billion, is to be sold to Cerberus Capital Management LP.

Image: Sam Boal/RollingNews.ie

ULSTER BANK HAS confirmed it has agreed to sell a portfolio of 5,200 mortgages to vulture fund Cerberus.

The portfolio is worth €1.4 billion and the bank said it does not contain any performing home loans or any home loans that are currently in an arrangement.

It is understood there are a small number of buy-to-let mortgages in the bundle that are in an arrangement with the bank but these have been deemed unsustainable. Many of the customers whose home loans are included in this sale had multiple forbearance arrangements with the bank.

There are 2,300 primary dwelling houses (PDHs) in the portfolio with an average arrears of €61,000 and an average of three forbearance arrangements with the bank. The average number of missed payments is 49.

There are also 2,900 buy-to-let mortgages in the portfolio with an average arrears of €32,000 and an average of four forbearance arrangements. For these loans, the average number of missed payments is 15 and the average length of time in arrears is 34 months.

The bank is giving customers 90 days notice of the sale to Cerberus Capital Management LP.

An Ulster Bank spokesperson said this “difficult decision” comes a decade after the financial crisis began and the continued extension of forbearance cannot 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,” they added.

“We will be in contact with all affected customers to help them as their loans transition to the new owner.”

The move by Ulster Bank follows the sale by Permanent TSB of  7,400 home mortgages and 3,300 buy-to-let loans to Lone Star, another vulture fund.

‘Unprecedented’

Commenting on this latest sale, David Hall CEO of Irish Mortgage Holders Organisation said today marks an “unprecedented two weeks of vulture fund sell offs”.

“Ulster bank say that of the 2,300 family homes they are selling to vultures, the family have been in an average of three mortgage restructuring arrangements. This proves the point which banks and their mouthpieces are ignoring. It’s about people’s ability to pay, not their willingness.”

Hall said banks, politicians and the Central Bank must be honest and “admit this is about people who can’t pay”.

“The Ulster Bank data shows that by confirming engagement by customers and attempts to pay.”

Fianna Fáil TD and chair of the Oireachtas Finance Committee John McGuinness said he has been contacted by many of the affected Permanent TSB customers in the last two weeks.

“It’s just horrendous,” he told TheJournal.ie. He said he does not believe the stories of these customers “match the spin” that the banks put out.

McGuinness also accused the two banks of deliberately announcing these sales during te Dáil’s summer recess.

“I’m repeating my call today for the Dáil to be recalled so we can debate this and to stop it from happening.”

He said he was disappointed that bank executives were not forthcoming about these plans when they appeared before the Finance Committee before the recess.

They didn’t tell us anything about the plans, if anything they misled us. They said they were working on them but given the numbers of loans it is obvious they were well on in the planning.

“Is this the society we want? We are going to be left with a very broken society. If the Dáil isn’t going to be recalled, there should be a very public protest, outside the gates of Leinster House. People have to be galvanised now against the banks and against an uncaring – and I won’t say government – political system.”

If you are affected by this sale or the PTSB sale to Lone Star, we want to hear from you – email michelle@thejournal.ie. 

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