# Central bank mixed message on vulture funds



## Open air (28 Feb 2018)

So now the central bank are saying that if you are in a agreement with your lender that your loan should not be sold to a vulture fund.Amazing that this comes up now, years after so many of us were cast aside by our banks to vulture funds in 2013/14. I personally had an agreement with Bosi and certus, but was still transferred to tanager. Looks like legal advice is going to have to be sought even more, as clearly the central bank are incapable of enforcing their own so called "rules"


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## Brendan Burgess (28 Feb 2018)

Open air said:


> So now the central bank are saying that if you are in a agreement with your lender that your loan should not be sold to a vulture fund



Where are they saying that? 

It makes no sense. 

Any lender can sell on any loan to whomever they like. 

Brendan


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## Brendan Burgess (28 Feb 2018)

IdesofMarch said:


> I think that Government along with (FF) are going to legislate that if your original lender allows ARA's including split/warehousing, reduced interest, interest only for a period, capitalisation of arrears etc., then the vulture fund must also offer the same arrangements.



Hi Ides

I don't see that in the Bill as currently drafted. 

https://www.oireachtas.ie/viewdoc.asp?DocID=37804&&CatID=59

Brendan


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## Sarenco (28 Feb 2018)

Brendan Burgess said:


> Where are they saying that?


I'm not aware of any pronouncement to that effect by the Central Bank.  As you say, it would make no sense.


IdesofMarch said:


> I think that Government along with (FF) are going to legislate that if your original lender allows ARA's including split/warehousing, reduced interest, interest only for a period, capitalisation of arrears etc., then the vulture fund must also offer the same arrangements


Here's a link to the FF private members bill.  It doesn't contain any of the provisions that you have suggested.
[broken link removed]


IdesofMarch said:


> There are a number of reasons for this including that the defendant could argue that their guarantees under the contract were reduced because of the sale to the vulture fund.


What guarantees?  These are portfolios of loan agreements.  If they have been modified, then the loan agreements as modified is what will transfer to the relevant funds.


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## RedOnion (28 Feb 2018)

My understanding is that separate to the proposed legislation, CBI have been asked, by Pascal Donohoe, to review the code of conduct on mortgage arrears.

I haven't seen any statements from CBI on the matter.


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## Andy836 (28 Feb 2018)

Question on the FF bill.

When I heard McGrath and a couple of other FF spokespeople launch this PR campaign, one thing stuck out. 
In nearly all of the radio interviews they would not only reference home "owners" but they'd also comment on farmers.
The whole media furore about PTSB has been about home loans being sold. There was no commentary or release from PTSB relating to farming debts. So it's very odd to specifically call out farms (outside of general SME loans).
Is this really about family homes for FF, or is that a cover - I presume a lot of farming debts are being sold off too. I presume small farmers would be good solid voters for FF.


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## Brendan Burgess (28 Feb 2018)

Andy836 said:


> So it's very odd to specifically call out farms



Hi Andy

I had not noticed that, but a reason might be that unlike other businesses, a farm is usually also the family home.

Brendan


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## Sarenco (28 Feb 2018)

IdesofMarch said:


> I think the Government is planning to beef up the CCMA.


The Minister has simply requested the Central Bank to review the CCMA (which he described as "balanced and fair") - the Government hasn't requested the Central Bank to "beef up" anything.
https://www.rte.ie/news/2018/0227/943951-central-bank-code-of-conduct-mortgages/


IdesofMarch said:


> Presently, only a breach of the time moratorium on issuing legal proceedings by credit institutions is a defence to repossession


The Supreme Court held that, when hearing a repossession case, a court can have regard for only one provision of the CCMA, namely the obligation on a borrower not to bring legal proceedings within the allowed moratorium period.  It would be completely impractical for the Courts to form a view as to whether or not a lender had made every effort to agree an alternative payment arrangement.

In any event, any such change would be completely unnecessary in view of the "no veto" PIAs that are now available to distressed borrowers.


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## Andy836 (28 Feb 2018)

Brendan Burgess said:


> Hi Andy
> 
> I had not noticed that, but a reason might be that unlike other businesses, a farm is usually also the family home.
> 
> Brendan



That's probably true. 

But doesn't get away from the fact that is also leveraging the family home for business purposes and not to simply pay for a "home"


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## Sarenco (28 Feb 2018)

IdesofMarch said:


> I know what Justice Peter Charlton said in the Supreme Court on this issue, but you can restate it for viewers if you wish.


Why would I want to do that?  I was simply trying to explain why any Central Bank review of the CCMA could not, of itself, bring about the change that you originally suggested (I note that you subsequently amended your post).


IdesofMarch said:


> I have to ask how would it be impractical for the Courts to form a view whether a vulture fund has offered the same restructuring arrangements as were available to the borrower by the original lender.


Again, you're missing the point.  If a loan agreement has been modified prior to its transfer then the transferee will acquire any interest in that loan agreement as modified.  In other words, the issue is moot.


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## Open air (28 Feb 2018)

The central bank was contacted on monday by a customer who has a tracker mortgage, the mortgage is now with a vulture fund. The customer is not receiving the correct interest rate. The customer was asked by the central bank phone agent, "is the fund regulated or unregulated" the customer replied " what difference does that make?" , the lady replied " if they are unregulated they can do what they want with your interest rate"!!!. Incredible from the keepers of our financial institutions


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## Sarenco (28 Feb 2018)

IdesofMarch said:


> If (when) portions of the CCMA are put on a statutory footing then of course they could.


Sure but before you amended your post you were suggesting that the Central Bank review exercise could itself result in a situation where other elements of the Code could be considered by the Courts.

We can all speculate about possible future legislation but I'm not aware of any public statement that would lead anybody to believe that the Government is considering introducing legislation to put any element of the CCMA on a statutory footing.


IdesofMarch said:


> In relation to loan modification, if the modification is permanent without a review, then yes you are correct.


It's really very simple - the fund steps into the shoes of the credit institution and enjoys exactly the same contractual rights and obligations as the credit institution.


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## Sarenco (28 Feb 2018)

IdesofMarch said:


> I believe Government are trying to strengthen consumer protection so that borrowers will be treated relatively in the same manner whether they are with a fund or regulated credit institution.


I've no doubt that's what you believe but we have already pointed out to you that the proposed legislation does not include provisions to that effect.


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## RedOnion (28 Feb 2018)

Andy836 said:


> In nearly all of the radio interviews they would not only reference home "owners" but they'd also comment on farmers.


Yes, I had noticed this. They also mention small businesses. It's probably just so they're not accused of ignoring the loans that were already sold by ACC / UB.


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## RedOnion (28 Feb 2018)

Open air said:


> The central bank was contacted on monday by a customer who has a tracker mortgage, the mortgage is now with a vulture fund. The customer is not receiving the correct interest rate. The customer was asked by the central bank phone agent, "is the fund regulated or unregulated" the customer replied " what difference does that make?" , the lady replied " if they are unregulated they can do what they want with your interest rate"!!!. Incredible from the keepers of our financial institutions


Tell them to contact the CB again, because they were misinformed! 
I'm assuming the servicer is regulated?


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## Sarenco (28 Feb 2018)

IdesofMarch said:


> CBI has no ability to legislate, however they do have the ability, if requested, to advise the legislature. This is what is happening. You will probably read about the proposed changes in legislation in due course.


Pure speculation.  Based on nothing more than your fevered imagination.


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## Open air (28 Feb 2018)

Well the fund is not, but the people that collect the money on behalf of the fund are regulated. Couldnt believe the misinformation been giving out by CB employees.If this person believed this lady and never followed up on this it would be a disgrace


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## newtothis (28 Feb 2018)

RedOnion said:


> Tell them to contact the CB again, because they were misinformed!
> I'm assuming the servicer is regulated?



How were they misinformed exactly?


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## Sarenco (28 Feb 2018)

IdesofMarch said:


> Talking about speculation, I hope my posts are more informative than your incorrect and misconceived  posts regarding Bank Of Ireland Staff Trackers where you stated, again and again, that these impacted cohorts would not get their tracker mortgages restored. You were wrong of course, because a lot happens behind the scene that you are obviously not aware of. This is Ireland.


Sorry Ides but we have had to correct you on multiple occasions on this thread alone.  You seem to think it's helpful to post inaccurate statements of fact or law.  I don't think that's remotely helpful to anybody.

You are, of course, free to speculate about what you think might happen in the future but please do not present your speculations as statements of fact or imply that you have some insider knowledge if that's not the case.

I hate to have to correct you yet again but I never once said that any Bank of Ireland staffer would or would not have their tracker restored.  I simply said that I couldn't see any contractual basis for their claims on the basis of the documentation posted on here.  I still can't.  Nor could the Central Bank.


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## Sarenco (28 Feb 2018)

newtothis said:


> How were they misinformed exactly?


Because the acquirer of a loan agreement has to observe the term of that loan agreement - including any interest rate provision contained in that agreement.


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## RedOnion (28 Feb 2018)

newtothis said:


> How were they misinformed exactly?


Because firstly it's a breech of contract law, and while CBI might not have enforcement powers against the fund, that doesn't mean a fund can do whatever they like.

And then, since the service providers are all regulated, the CBI does have enforcement powers on them to ensure the contract is followed.  There's a whole piece of legislation devoted to them: http://www.irishstatutebook.ie/eli/2015/act/21/enacted/en/print.html


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## Sarenco (28 Feb 2018)

I'm afraid I don't share your interest in fiction so I don't understand what you mean by that reference.  

Equally, I've no expertise in moral philosophy.  

I am, however, very interested in trying to be accurate in what I say.  You, clearly, don't share that particular interest.


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## Sarenco (28 Feb 2018)

Oh but I do understand why a tranche of (but certainly not all) relevant BOI staffers are being put on trackers.

The Central Bank put pressure on BOI to do so on the basis of what the Central Bank imagined was the parties' "expectations".

Nothing to do with their contractual entitlements.

I will ignore the ad hominem.  Frankly, it's boring.


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## Sarenco (28 Feb 2018)

IdesofMarch said:


> No political pressure? How naive. Maybe your not as smart as you think you are.


I'm afraid I've no idea what you are talking about.  It's a matter of public record that BOI changed their position following the Central Bank's "challenge" of what they considered BOI's "overly legalistic" interpretation of the relevant mortgage contracts.

As it happens, I'm not particularly smart, far from it.  I just happen to think it's important to try and accurately reflect the factual or legal position as I understand it and not to just make stuff up because it suits my agenda.  You obviously don't share that approach.


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## Open air (21 Mar 2018)

Rang the central bank of ireland this morning for clarity on the rates of interest that the ecb currrently charge, "sorry sir we would not have that kind of information".


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## Webster (21 Mar 2018)

Open air said:


> Rang the central bank of ireland this morning for clarity on the rates of interest that the ecb currrently charge, "sorry sir we would not have that kind of information".



The current main refinancing rate that the European Central Bank charge banks for main refinancing operations is 0%, but you would be better off going to the interbank market, Eonia, Euribor etc. where the rate is currently negative (Yes, you read that right; if a bank takes a loan from another bank, the other bank will effectively pay you for taking it (cost of money these days)). For loans for the Irish mortgage market, Irish banks pay between 0.6% and 0.9% depending on the lending institution.


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