My Indo article: Any help for mortgage holders should be for those who really need it.

JD2021 said:
My understanding is most Vulture Funds are in turn owned by vast Private asset or Pension funds with little requirement to borrow to buy up Mortgage Portfolios but I am no expert.

I get a sense some are actually looking to exit the Irish Market having realized they are stuck for the long Haul , I am aware some have sold mortgages on to approved housing bodies and are actively encouraging customers to look at the Mortgage to rent scheme.

That recent Judgement involving Pepper Finance has certainly focused the minds of some Vulture Funds, a year ago none would either entertain the notion of extending a Mortgage or lowering interest rates.
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Not about needing to borrow. But choosing to use leverage, can increase their returns in the equity they deploy.
 
ClubMan said:
"Having realised"? Surely, an entity buying a portfolio of mortgages knows, a priori, that it's a long term venture? I doubt that this dawned on them slowly after the fact...
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Due Diligence doesn't seem to have applied in many cases. I use the word realise lightly.
 
skrooge said:
I agree that any form of relief will just give the vulture funds further scope to push up rates and will just result in a transfer of wealth from the State to VFs.

Like them or not the reality is the VFs provided an important role in tidying up the banks balance sheet. They moved things off banks balance sheet much faster than if banks had to work through the courts.

Do we still need them? If we had another crises leading to high arrears/defaults are there systems in place to streamline the repossession process? I'm open to correct but I think the answer is no.

So if we might need them again we need to avoid measures that would undermine their business model. That's before you even consider the legalities or constitutionality of forcing them to lower rates.

However, might there be scope to expand some of the existing mortgage supports to make these borrower's more attractive to banks. What about something like the first home scheme whereby the State underwrites part of the loan. It might help some VF customers move.
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The only thing the State need to do to help the Vulture Fund mortgage holders is to make them respect the rates of the original lender , that costs nothing , yes the Vultures took the bad loans from the Banks but they did so at a massive discount which the taxpayer made good for the banks so its not like the really were knights in shining armour . They will make a very healthy profit respecting the High Street Bank rates and their so called excuses for the over the top rates are nothing but greed .
 
CorkHome2022 said:
The only thing the State need to do to help the Vulture Fund mortgage holders is to make them respect the rates of the original lender , that costs nothing , yes the Vultures took the bad loans from the Banks but they did so at a massive discount which the taxpayer made good for the banks so its not like the really were knights in shining armour . They will make a very healthy profit respecting the High Street Bank rates and their so called excuses for the over the top rates are nothing but greed .
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I disagree that forcing VFs to charge the same as banks would cost nothing. The VFs have a vastly different funding model they're really not comparable. That's even before you look at the difference in credit risk between borrowers at these funds and banks.

By changing the rules of the game after the event you may result in VFs never purchasing bad loans from Irish banks again or drive down the discount they require. So in the future it will mean a deeper more pronounced recession than without having the VFs.

I'm not a fan of VFs but they did provide a service for the greater good - most definitely not those who are stuck with them. Is it greed/opportunism probably but until such time as we have a financial/legal system that can resolve a high arrears rate in a timely manner id be careful about legislating them out of the market. We might need them again.
 
CorkHome2022 said:
The only thing the State need to do to help the Vulture Fund mortgage holders is to make them respect the rates of the original lender
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To balance that you would also need to allow them to evict those who can't or won't pay their mortgages to allow them sell the property quickly.

CorkHome2022 said:
over the top rates are nothing but greed
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Emotive language doesn't help. These businesses aren't a charity, they are in business to make a profit, and profit is a good thing. Without it we'd all be in a very bad place.
 
Leo said:
To balance that you would also need to allow them to evict those who can't or won't pay their mortgages to allow them sell the property quickly.


Emotive language doesn't help. These businesses aren't a charity, they are in business to make a profit, and profit is a good thing. Without it we'd all be in a very bad place.
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Correct that any business is not a charity but they purchased the loan books at a massive discount in the full knowledge what the protections in this country are , Project Glas was sold by PTSB to Start at a 38% discount so that gives Start plenty of room to keep rates as per the PTSB rates and still make a very healthy profit . None of the Vultures will ever actually be at a loss from the many loan books they purchased here since the post Celtic Tiger Crash , plus many current loan sales are not distressed but rental properties which are not in arrears and those mortgage holders are now being fleeced by the vultures charging alot more that the original providers .
 
Leo said:
So what profits do you think they are making?
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The dont report them to the public do they ???? But this article from Forbes does put it in perspective
www.forbes.com

The Billionaire Banker In The Shadows

Secretive John Grayken debuts on the forbes billionaires list with the second-biggest fortune in private equity, $6.3 billion. In an era that demonizes predatory banking, he's a ruthless, selfish, unpatriotic tax dodger--and virtually every pension fund manager in the world is rushing to give...
www.forbes.com www.forbes.com
 
CorkHome2022 said:
The dont report them to the public do they ???? But this article from Forbes does put it in perspective
www.forbes.com

The Billionaire Banker In The Shadows

Secretive John Grayken debuts on the forbes billionaires list with the second-biggest fortune in private equity, $6.3 billion. In an era that demonizes predatory banking, he's a ruthless, selfish, unpatriotic tax dodger--and virtually every pension fund manager in the world is rushing to give...
www.forbes.com www.forbes.com
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Interesting. If you have a private pension then you may well be a beneficiary of his behaviour.
 
JD2021 said:
Excellent Article , I believe and some very good solutions worth considering. I speak as someone who is a Vulture Fund customer on my home and who has watched rates rise inexplicably from 3.9% to 6.6% and rising. I know the reasons why Vulture Funds can raise rates has been explained but I still find it extraordinary that despite them purchasing Mortgages with massive discounts (they are reluctant to disclose) their Funding primarily private and in no way linked or affected by ECB rate fluctuations.

Its also worth pointing out that they never once matched ECB rates when they were at an all time lows , in my own case they purchased my mortgage from PTSB in 2019 at a rate of 3.9% which remained at the level up till 2022. I still see no logic as to their approach with regard to increasing interest rates , they've have, dare I say forced many into arrears.

Up until very recently Vulture Funds would not entertain extending a Mortgage or lowering interest rates , that has now changed. It may suit some Borrowers and I believe this new approach led by recent circuit court Judgement, most notably Pepper Finance where a couple facing repossession got an extension of their mortgage and a FIXED interest rate of 2.5% as part of a PIA , I was offered an extension of 32 years and a variable rate of 3% but will still owe €45k on my death if I lived to 95, I am 57 and total Mortgage Balance now is €60k

I am currently negotiating a Full discharge of my Mortgage , details on another Thread.
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An extension of 32 years is excellent. You can't pay a mortgage when you are dead anyway!
 
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