FF TD calls for control on vulture funds

I am glad to see someone taking on the issue, but he doesn't really understand it.

He claimed funds won’t offer proper write-downs and instead are only offering token write-offs of debt for those unable to meet their repayments.


Vulture funds do not offer fixed rates. Instead, many who are trapped with them are on variables with rates as high as 10pc.

Mr Troy asked his party colleague “if he will review the threat of vulture funds given their resistance to dealing with the original borrowers in a fair manner”.

Mr Troy’s Dáil question called on the minister to introduce an independent intermediary, who will be aware of what the vulture fund paid for the loan, in order to adjudicate what is a fair and reasonable write-down offer.

Brendan Burgess said:

Finance Minister Jack Chambers is urged to introduce rules to manage vulture funds

Finance Minister Jack Chambers has been called on to introduce rules to stop vulture funds acting in what has been described as an unfair manner with mortgage holders who are trapped with them.

www.independent.ie

I am glad to see someone taking on the issue, but he doesn't really understand it.

He claimed funds won’t offer proper write-downs and instead are only offering token write-offs of debt for those unable to meet their repayments.


Vulture funds do not offer fixed rates. Instead, many who are trapped with them are on variables with rates as high as 10pc.

Mr Troy asked his party colleague “if he will review the threat of vulture funds given their resistance to dealing with the original borrowers in a fair manner”.

Mr Troy’s Dáil question called on the minister to introduce an independent intermediary, who will be aware of what the vulture fund paid for the loan, in order to adjudicate what is a fair and reasonable write-down offer.

Click to expand...

Agreed re not understanding the problem , some people seem to think that the borrower is entitled to a write down because the mortgage was sold at a discount but thats just not the case.
Your original debt still stands as per your contract but the issue is the Vultures going above and beyond your terms when they charge much different rates than the original bank did , however if somebody cares to look at the minute details of their mortgage conditions it will have a clause to cover setting of interest rate if sold to a third party .
Until such time that a court rules on this there is nothing to be done , hence I suspect why the powers that should be doing something are very slow to act.

CorkHome2022 said:

but the issue is the Vultures going above and beyond your terms when they charge much different rates than the original bank did

Click to expand...

Unfortunately they're not. Most or all non-tracker variable rate mortgage contracts give the lender free rein to charge what they like. As I mentioned before, several years ago I helped somebody to take a case to the FSPO against BOI on this issue on the basis that the contract breached the relevant EU unfair contract legislation but they rejected it. Of course maybe a different ombudsman might rule differently given that FSPO decisions seem to depend so much on the individual in charge at any point in time.

CorkHome2022 said:

however if somebody cares to look at the minute details of their mortgage conditions it will have a clause to cover setting of interest rate if sold to a third party .

Click to expand...

Are you sure about that? Not in my experience. Maybe you can cite an example contract wording?

ClubMan said:

Most or all non-tracker variable rate mortgage contracts give the borrower free rein to charge what they like.

Click to expand...

That would be brilliant. But it's the lender who has free rein.

However, the ptsb contracts and switches to variable rate documentation which relates the rate charged to the ptsb rate and I think it's arguable that the vultures should offer the rates on offer to ptsb customers.

But the overriding issue here is one of fairness. In my opinion, it is not fair, that a customer who stays with ptsb is paying 4% but one whose mortgage is sold is paying 9%.

But I don't know if anyone is challenging this with the Ombudsman or the High Court.

The Central Bank and the Oireachtas should deal with it, but they have both washed their hands of it.

Brendan

Brendan Burgess said:

That would be brilliant. But it's the lender who has free rein.

Click to expand...

It was obviously a typo which I have fixed.

Brendan Burgess said:

However, the ptsb contracts and switches to variable rate documentation which relates the rate charged to the ptsb rate and I think it's arguable that the vultures should offer the rates on offer to ptsb customers.

Click to expand...

Good luck arguing that with the FSPO or other powers that be. Maybe the current FSPO will take a different view to the one who was in post back c. 2015.

Brendan Burgess said:

But the overriding issue here is one of fairness. In my opinion, it is not fair, that a customer who stays with ptsb is paying 4% but one whose mortgage is sold is paying 9%.

Click to expand...

Some people think it's unfair that they don't get a write down because the vulture fund bought the mortgage at a discount. Fairness is subjective.

Hello,

Is this not just another publicity stunt, from a politican who will be looking to get re-elected soon?

ClubMan said:

Good luck arguing that with the FSPO or other powers that be. Maybe the current FSPO will take a different view to the one who was in post back c. 2015.

Click to expand...

It is a completely different issue.

The FSPO argued that BoI or whichever bank was involved, was free to set the variable rate at whatever level it wanted.

The ex-ptsb customers have documentation saying that they will be on the ptsb variable rate.

ptsb has the right to vary that. No one is questioning that.

But the issue which should be challenged is whether the acquirer is obliged to charge ptsb rates.

Brendan

Heres a bit on him

All in all for a former auctioneer hes very forgetful about everything

"He claimed funds won’t offer proper write-downs and instead are only offering token write-offs of debt for those unable to meet their repayments."

I question his information there. I have worked in both banks and funds and from my experience the banks never give any write down. Alot of cases where borrowers would surrender the house to a bank but because they were in negative equity were still liable for the shortfall.

When it comes to the funds, while they might be more aggressive, I have seen massive write downs especially when borrowers are in negative equity and they are looking to sell the house.