# "vulture funds just want to evict people to turn a quick profit"



## Brendan Burgess (30 Aug 2018)

This is a point made by many people in criticising the vulture funds. 

But they can turn a quick profit by selling the mortgages on.  I want to compile a list of such transactions. 

1) March 2018 Goldman Sachs and Pimco issued a bond based on the Danske performing mortgages they bought. 

_Goldman Sachs and Pimco, the buyers of Danske's €1.74bn residual retail book, have moved swiftly to capitalise on the rising investor appetite for Irish residential mortgages with the launch of a €1.55bn bond deal backed by performing home loans. 


Goldman Sachs and Pimco paid close to 95c in the euro for the Danish bank's retail book, outmuscling competition from final-round bidders Bank of Ireland, Elliot Management and Prudential.
_
2) October 2017  Bank of Ireland bought 1,000 home loans from Shoreline Residential 

_[broken link removed], the Sunday Times reports, has bought a portfolio of more than 1,000 home mortgages from Shoreline Residential, an affiliate of the American private equity group Lone Star, for an undisclosed amount. The deal represents a further step in the bank’s strategy of growing its loan book by acquiring mortgages after they have been restructured by distressed debt specialists._

Any other examples?


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## Steven Barrett (30 Aug 2018)

Even the name vulture funds gives off the connotation that they are picking at the carcasses of the distressed, something peddled by the politicians. But imagine what state the pillar banks would still be in if they still had all of these debts? And from a mortgage holder point of view, the main banks wouldn't negotiate with people unless they were willing to give 5 years of pain for a write off. The vulture funds bought the debt at a discount, so are much more willing to do a deal if they are making a profit in doing so. 



Steven
www.bluewaterfp.ie


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## Open air (30 Aug 2018)

Yet to meet someone who got a "deal" unless they could provide cash up front, or refinance elsewhere. 4 years into having my loan bought by a vulture fund, havent missed a payment in that time, and still in the court system, tanager ltd,,plenty plenty people in the exact same boat


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## AlbacoreA (30 Aug 2018)

Some people try to merge the issue of social housing and housing policy with private housing. Investment funds are only interested in the latter. 
People only try the merge the two issues because of the complete abdication of Govt to provide social housing. They've outsourced it, to the private sector. 
Some countries have social housing policies that put restrictions on private housing development, to make provision for social housing. 
But in Ireland as with much of planning and building its largely circumvented, and the Govt turns a blind eye to it. Whereas other countries enforce it.  

So if the investment funds have a negative impact on social housing, then its because the Govt allows it.


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## newtothis (30 Aug 2018)

Brendan Burgess said:


> This is a point made by many people in criticising the vulture funds.



Probably because there is more than a grain of truth in it. It’s not the absolute truth using the language you did (i.e. “just wat to evict people”), but it’s certainly true that vulture funds just want to turn a quick profit. Because of the way they operate, evictions are much more likely to happen.

There is a fundamental difference between the banks and the vulture funds: the timeframe of the loan provided. Banks provided the loans originally on a long timeframe (i.e. decades); vulture funds are interested in timeframes measured in months, typically less than 24. This has a huge impact on the type of solutions possible for someone who’s loan has been sold to a fund. Essentially, anything that does not provide a cash return for them within their timeframe will not be contemplated.

There are certainly some advantages of dealing with a fund in preference to a bank, notably the speed they operate at if you are in a position to come to an arrangement, but because of their timescales the chances of losing your home, either by forced sale or repossession, is greatly increased.

Thus, it is not an irrational complaint to have your loan transferred to a vulture fund.


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## Bronte (30 Aug 2018)

newtothis said:


> Thus, it is not an irrational complaint to have your loan transferred to a vulture fund.



I'm sorry but you haven't actually proved your point.  How are evictions more likely to occur? And is it a fact that there are more evictions in Ireland with vulture funds.


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## AlbacoreA (30 Aug 2018)

One of the spokesmen from one of these funds was interviewed on Irish TV about one of their deals here where they bought a load of apartments. 
He seemed baffled, that evictions and quick profits were seen as a negative. From their perspective it was just normal healthy business in their sector. 
I got the impression he thought those who had a problem with it needed to cop on.


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## AlbacoreA (30 Aug 2018)

Bronte said:


> I'm sorry but you haven't actually proved your point.



I thought he did. Transfer to a vulture fund will potentially shorten the timeframe in which you have to resolve any issues.


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## Bronte (30 Aug 2018)

AlbacoreA said:


> I thought he did. Transfer to a vulture fund will potentially shorten the timeframe in which you have to resolve any issues.



Go on...

As in I'm not getting how this proves that _vulture funds just want to evict people._

Nor am I getting if evicting people is in of itself a bad thing in every case.  I read yesterday of a woman with two grown up children who had just purged her contempt and got out of jail having gone into an investment property and lived there in order to stop the banks getting their hands on it.  She served some time in jail.  But they weren't paying anything.  There was a worry by the receiver that her now agreeing to leave might mean the two children would have to be evicted.


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## AlbacoreA (30 Aug 2018)

His point wasn't  "just want to evict people" so thats not the point he was proving.


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## Jim2007 (30 Aug 2018)

AlbacoreA said:


> Some countries have social housing policies that put restrictions on private housing development, to make provision for social housing.



Which countries exactly are you talking about?


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## AlbacoreA (30 Aug 2018)

Jim2007 said:


> Which countries exactly are you talking about?



I was thinking of this...
http://www.housingeurope.eu/resource-88/social-housing-in-europe


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## Bronte (31 Aug 2018)

AlbacoreA said:


> His point wasn't  "just want to evict people" so thats not the point he was proving.


Well I thought that was his point, if it isn't what point is he making.


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## AlbacoreA (31 Aug 2018)

His first paragraph.  I can't say it clearer than he has done. 

I don't really see the point of repeating tabloid headlines which are deliberately made strawman like by the media and newspapers to sell adds clicks and newspapers. 

We on this forum know the investment fund have a job to do. This forum is very biased to one side of social issues. That simply a product of its demographic. So it's really a going to be a one sided thread. Is that really interesting?

It would be more interesting to look at economic policies that allow people to make a return on investment while also contributing to some social in this case social housing need.

People who are abusing the process should of course be rapidly dealt with. I'm not talking about those. But that will be the only people who will be talked about under a thread title like that here.


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## newtothis (31 Aug 2018)

Bronte said:


> Go on...
> 
> As in I'm not getting how this proves that _vulture funds just want to evict people._



Because that's not what I said! Read it again: what I said was that there was more than a grain of truth in the statement "vulture funds just want to evict people to turn a quick profit". I said explicitly it is not the absolute truth: it's clearly overstated in terms of their intent. The truth is that they want to turn a quick profit (I assume you accept that?). I then want to explain why it's a side effect of that which makes evictions more likely. It's kind of irrelevant if you're on the receiving end if an eviction is the primary motivation of the company evicting you or just a side effect: the result is the same.

There’s a narrative that’s put out by some questioning what’s the problem with vulture funds: it’s just a transfer of a loan, the terms of which have not changed. My point is that there *is* a problem: because of the way they operate you have no prospect of a long-term solution being put in place and a much higher chance of you losing your home.

Take someone who got into difficulties due to redundancy or whatever, and as a result have arrears built up. They have now recovered their position and can pay off their original repayment amount, but not the arrears. A sensible solution is maybe to extend the loan by a couple of years and/or pay off the arears over the remainder of the loan. Try asking that of a vulture fund: you will be told to go whistle (I know, I tried). You will also be pressured to come up with the arrears in the short term. I know in that circumstance your chance of losing your home is minimal, but this is only due to the entirely sensible approach being taken by the courts. That’s down to policy though, not the law: you have the threat hanging over you the whole time.

I was lucky enough to get out from under a vulture fund, but it’s next to impossible to finance a new loan to repay and get back to a conventional mortgage.

My point remains: there is a significant difference in dealing with vulture funds and you are most definitely more likely to lose your home as a result.


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## AlbacoreA (31 Aug 2018)

Maybe these types of marginal cases are few. We don't know. The information released seems to avoid that sort of breakdown .


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## demoivre (31 Aug 2018)

newtothis said:


> My point is that there *is* a problem: because of the way they operate you have no prospect of a long-term solution being put in place



Up to June 2018 Vultures have done more Mortgage to Rents than banks. Also Courts can, and have, forced through PIAs on Vultures under Section 115 A of the Personal Insolvency Act, resulting in borrowers staying in their homes.


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## newtothis (31 Aug 2018)

AlbacoreA said:


> Maybe these types of marginal cases are few. We don't know. The information released seems to avoid that sort of breakdown .



I'd accept it's impossible to know for sure: it's only after a couple of years in you'd get even basic comparative figures for repossessions and perhaps never for enforced sales.

However, I doubt the scenario I described is a marginal case. As I said, I know from personal experience the differences between dealing with banks and vulture funds (in my case Danske and Cerberus respectively). I was lucky and managed to get a mortgage elsewhere to pay off the original one, with a write-down to account for the difference in interest rate. However, knowing how difficult it was to get the new mortgage, I’d be very surprised if that’s a common outcome. Much more likely (and I know this from speaking with others in similar situations) is to be forced into an unwanted sale by threat of or actual court action.

As I said, there is a very real difference between banks and vulture funds, and people are right to be concerned if their loan is transferred.


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## newtothis (31 Aug 2018)

demoivre said:


> Up to June 2018 Vultures have done more Mortgage to Rents than banks.



A meaningless statement by itself. How many mortgages are there with banks? how many with vulture funds?



demoivre said:


> Also Courts can, and have, forced through PIAs...



Another example of the courts trying to apply some sense and balance to the lender/customer relationship. The operative word is "forced"......


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## Brendan Burgess (31 Aug 2018)

Hi 

I have done the analysis here: 

*You are far more likely to get a Mortgage to Rent deal if you are with a vulture fund*

Brendan


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## demoivre (31 Aug 2018)

newtothis said:


> A meaningless statement by itself. How many mortgages are there with banks? how many with vulture funds?
> 
> 
> 
> Another example of the courts trying to apply some sense and balance to the lender/customer relationship. The operative word is "forced"......



I made two factually correct points about Vulture funds to counter your factually incorrect point which was :



newtothis said:


> because of the way they operate *you have no prospect *of a long-term solution being put in place


  (Emphasis by me.)

MTR is a long-term solution to mortgage distress as is a PIA.


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## newtothis (31 Aug 2018)

Brendan Burgess said:


> Hi
> 
> I have done the analysis here:
> 
> ...



I stand corrected, Mortgage to Rent is indeed a good long term solution for some. I don't think the current scheme was operating when my own case was resolved. It's an interesting one, as it's long-term from a customer perspective, but short-term from the lender's perspective - a win-win indeed. The problem is the numbers availing of it are very low and it's not an option for many, as it requires the active participation of a 3rd party which is not always available.

By the way, it's not just an opinion of mine that vulture funds are only interested in the short-term: the one I dealt with said this directly to me. Mind you, they said plenty of other things as well, some of which were flat-out lies (they said contradictory things to others I've spoken to), so maybe it's not true either.

I stand over my main point, which is there is a difference between dealing with a bank and a vulture fund and you are more likely to lose your home with the latter.


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## Bronte (1 Sep 2018)

What is the main difference dealing with a vulture fund rather than a bank?

Second question, how are you more likely to lose your home?


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## newtothis (1 Sep 2018)

Bronte said:


> What is the main difference dealing with a vulture fund rather than a bank?



I had thought I’d already answered this, but to restate in a bit more detail…..

As I’ve also previously mentioned, any views I have are as a result of direct personal experience and from talking to others who have had similar direct experience.

Another point is that in comparing the banks’ and the vulture funds’ handling of this issue they are both radically different from any dealings I’ve had with banks or investors of various types in 20+ years of being in business. Without experiencing it, it’s very hard to believe the way they both behave, which is why I think those without this direct experience can take the view that experiences are exaggerated or just untrue.

Firstly, the similarities between the banks and vulture funds. It is next to impossible to deal with anyone who has authority to do anything. There is a lot of incompetence encountered; failures to follow up on commitments, documents going missing, lack of response to queries, the list is endless. Despite having a fairly simple set of procedures the follow (the Mortgage Arrears Resolution Process, or MARP), in mine and other cases I know of, they both had multiple breaches of its provisions (without any consequences, by the way, unlike breaches by borrowers, but that’s another story). Shockingly, they were both capable of telling out-and-out lies and/or fabricating documents.

The overall impression I got was for the day-to-day stuff, there are probably more differences between the different banks than between banks and the servicing agents used by the vulture funds: they were all much the same.

Now, the differences….

On the positive side, the vulture funds are definitely quicker to act, which if you’re in a position to reach a positive outcome is great. This could presumably work against you too if the outcome isn’t going to be positive, so it could also be a negative.

The biggest difference, though, is the vulture funds will not offer any solution that involves them in the long-term, unless you can manage to clear any arrears immediately (in which case the mortgage continues on as originally intended, though with someone other than the original lender now controlling the interest rate for non-tracker mortgages).

MARP sets out a number of alternative repayment arrangements that may be offered. None of these are available, other than anything that offers repayment in a short (e.g. less than two years’) timeframe.



Bronte said:


> Second question, how are you more likely to lose your home?



Vulture funds want a return on their investment in a short-time frame. There aren’t that many ways a mortgage can be converted into cash in that time frame:

-  Borrower comes up with the cash to buy them out. Unlikely, as it’s next to impossible to get a new mortgage with a history of arrears and if the borrower had the cash they probably wouldn’t be in the situation in the first place.

-  A third party comes up with the cash to facilitate the borrower. For example, the Mortgage to Rent scheme: great if it can be made to work, but so far the numbers involved are low, probably because the third party has to be convinced.

-  “Voluntary sale”, in which case they lose their home. I put this in quotes, as it’s highly questionable how voluntary it is. Borrowers are put under intense pressure to sell, especially if any negative equity has gone. Don’t get me wrong: if someone is living in a €1m+ house without the means to keep it, I’m not suggesting they should be entitled to stay. However, there are many (most?) who have recovered their position but have no way to clear any arrears in the short-term. They will probably find it impossible to raise a new mortgage, meaning they will have lost the ability to own any home, perhaps for ever.

-  Forced sale or repossession, in which case they lose their home.

There may well be other outcomes, but the basic point remains: because of the lack of consideration of long-term solutions, the chances of losing your home are increased.


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## Open air (2 Sep 2018)

newtothis said:


> I had thought I’d already answered this, but to restate in a bit more detail…..
> 
> As I’ve also previously mentioned, any views I have are as a result of direct personal experience and from talking to others who have had similar direct experience.
> 
> ...


Newtothis has just summed it perfectly


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## Carrot/stick (3 Sep 2018)

Well said newtothis. Finally a balanced point of view based on experience.


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## newtothis (3 Sep 2018)

Carrot/stick said:


> Well said newtothis. Finally a balanced point of view based on experience.



My experience is far from unique: there are many, many cases documented on this site and elsewhere of how it is to deal with both banks and vulture funds when you're in this situation. As I said, unless you've experienced it, reading a lot of these accounts can strike one as exaggerated or not telling the complete story (surely banks don't lie?), but most of them ring absolutely true to me.

I'm one of the lucky ones and have managed to put it behind me, but it was without question the worst five years or so of my life. I can well understand people's health and/or relationships collapsing under the strain. Yes, for sure there are some absolute chancers out there, but I cannot believe the vast majority aren't in the "can't, but more than willing to pay if they can" category. For a lot of them, just when they're at the point of seeing some light at the end of the tunnel with recovering employment and income levels, they're being thrown to the vultures. The government's handling of the whole sorry mess is shameful.


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## Carrot/stick (4 Sep 2018)

I know exactly where your coming from but I have to say I had good dealings with my lender who were polite and courteous in general.  Now, two years into a split after recovering from ill health and working full time again I requested a review as my circumstances have changed and was told it doesn't work that way to bring on the warehoused part. The mechanisms aren't there to it. I almost called an ambulance for myself.


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## UptheDeise (5 Sep 2018)

Karl Deeter gave an interview with WLRFM a couple of weeks back discussing vulture funds and their benefits. Incidentally, they very same people complaining about banks and the lack of regulation are now complaining about banks actually implementing regulation accord to EU rules.

Starts at around 2:05.

https://soundcloud.com/wlrfmwaterfo...fmwaterford/sets/deise-today-with-eamon-keane


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## newtothis (5 Sep 2018)

UptheDeise said:


> Karl Deeter gave an interview with WLRFM a couple of weeks back discussing vulture funds and their benefits.



For some, including me, this is undoubtedly true, as I've already pointed out. They are definitely more responsive and they do offer discounts if you can raise the finance to avail of it, unlike the banks in most circumstances.

It's hard to know for sure, but for most people they are almost certainly worse off dealing with a vulture fund, assuming most people both want to retain their home and cannot raise finance due to their credit history.


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