RTE's programme on Vulture Funds

Thirsty said:
Give me a true life example.

Why should 13,000 Irish Nationwide mortgage holders be forced into such arrangements with 'tough' people?

I am dealing with a case at present where the home owner
  • offered to maintain interest payments - VF rejected
  • offered to pay capital and interest payments in full - VF rejected
  • offered to redeem the mortgage in full (switching mortgage) - VF rejected
I have documentary evidence to support all the above.

The VF are pushing ahead with a court case to repossess the home; despite being offered full payment of their debt.
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Will a judge grant an order under those circumstances? I can't see it happening myself.
 
Did anyone else note that the presenter of the programme is the editor of the Sunday Business Post. The SBP is owned by Key Capital who are in themselves a "Vulture Fund" in so far as they have investments in various loan books and have bought distressed assets. I feel this should have been mentioned at some point by someone as it seems a bit hypocritical especially since the programme seemed to lack balance.
 
Johnsoner said:
Did anyone else note that the presenter of the programme is the editor of the Sunday Business Post. The SBP is owned by Key Capital who are in themselves a "Vulture Fund" in so far as they have investments in various loan books and have bought distressed assets. I feel this should have been mentioned at some point by someone as it seems a bit hypocritical especially since the programme seemed to lack balance.
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I think this is not relevant, indeed unfair. The program was fair and balanced. The presenter did a good job regardless of his day job or his position with the SBP. the wider group parentage are steps away from his actual employer.
 
Palerider said:
I think this is not relevant, indeed unfair. The program was fair and balanced. The presenter did a good job regardless of his day job or his position with the SBP. the wider group parentage are steps away from his actual employer.
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Not having seen the program due to geo-blocking but I would hazard a guess it wasn't that balanced at all.

How many people from the funds themselves were interviewed? How many people with industry experience actually contributed (e.g. asset servicers, tax lawyers/accountants, bankers). Wasn't the SBP "tax lost expose" calculation completed by a Social Policy lecturer rather than a Accounting expert?

All the reaction I've seen is these funds pay no Tax on huge profits. However I've yet to see a spreadsheet or detailed working from someone to validate that claim. While I've no doubt they'll make substantial profits from looking at Stephen Donnelly's work on this he basically completely misunderstood how they accounted for their funding.

I've also not seen mentioned by any commentator that the removal of the Sec110 entitlement would have reduced ongoing cash flows and thereby reduced the up front bids from the Funds themselves. So the funds pay a higher price for the assets using Sec110 than they would if they were subject to full taxes. Money in the pocket versus money down the road.

I also find it annoying to read how funds pay no taxes on "xx amount of assets", or "x amount of revenues" or "x amount of interest & rental income". As if tax is liable on something other than "profit". Furthermore, it would appear most of these same commentators assume these funds have no operating costs in the management of their portfolios.

Anyway, I'm sure I'll see it sometime in the next few months and be pleasantly surprised that I was wrong, and it was a well balanced, detailed examination of structured finance......
 
Thirsty said:
edit to add:Almost every single post I have seen here is that they won't do deals.
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You have to differentiate the "deals". If you have a performing loan, you owe €300,000 and have €250,000 in cash, they won't do a deal.

If you are in arrears and you agree a level of expenditure with the bank, with the remainder of your income going to the bank for 6 years, they will write off huge amounts of debt.* You will have to make sacrifices in order to get the deal.



*This is not my area. It is what I heard at a conference a couple of years ago.



Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
All we've been hearing for years is the bank/Nama not doing deals with the occupier. But seems to have no problem accepting a lower offer from elsewhere. Makes no sense to me. Seem to want the deal that makes it someone else problem, regardless of price.
 
Thirsty said:
Real live examples seem to be very rare.
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Hi Thirsty

People like the guy in the programme who has the money to keep his house are happy to go on TV to rant about not getting their "fair offer" accepted.

People who get deals don't usually get onto the media to talk about it.

Having said that, they are rare enough. They almost always involve the loss of the family home or the investment.

Brendan
 
Palerider said:
I think this is not relevant, indeed unfair. The program was fair and balanced. The presenter did a good job regardless of his day job or his position with the SBP. the wider group parentage are steps away from his actual employer.
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Andy836 said:
Not having seen the program due to geo-blocking but I would hazard a guess it wasn't that balanced at all.
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On reflection, and having watched the programme, I agree with Palerider.

If the programme had argued that Vulture Funds were the best thing to happen to Ireland and he had not disclosed that he was working for a paper owned by a vulture fund, then that would have been inappropriate.

However, despite working for a vulture fund, he demonised them. He was unfair to vulture funds. So the bias worked the wrong way, if you understand what I am saying.

However, he should probably have noted that his employer is owned by a vulture fund. But it's only a minor criticism.

Not pointing out that someone who has been in arrears for up to 9 years and still has their home was a much bigger failing of the programme.

Brendan
 
Brendan

You are right in saying that people who get deals done do not get onto the media about them. In the case of "informal" arrangements, the vulture funds usually insist on confidentiality clauses. Whilst many cases will involve the compulsory sale of investment properties, the family home can usually be saved if the borrower can pay a mortgage for the "market value" of the property.

I have previously posted on this forum how Ireland now has one of the best personal insolvency regimes with a range of solutions for people in financial difficulty. Is it perfect? No. Has the Government taken every step to protect its citizens from the vulture funds? No. There are still real issues with the legislation, which I have highlighted on this forum previously. One of the big issues is that some PIPs are not authorised to implement informal schemes, and therefore some PIPs "force" debtors to down what can be a costly and stressful PIA/DSA route, which can lack the flexibility of an informal scheme. Another big issue is the €3 million cap on people who wish to do a PIA.

The Irish Society of Insolvency Practitioners (who represent Personal Insolvency Practitioners, Corporate Insolvency Practitioners, accountants and solicitors advising the banks/vulture funds etc.) made a detailed submission to the Government a long time ago recommending two key changes in the legislation:

  • Allow PIPs to also do informal schemes.
  • Lift the €3 million cap on PIAs.
The Government have not followed the advice of the leading professionals (who provide expert advice on both sides of the fence: i.e. to borrowers and banks.)

The existing €3 million cap on PIAs is preventing many business people across the country from doing PIA's. It is causing massive stress and anxiety, and there is now no logical reason to retain the cap. The cap was initially put in as the government was concerned that the banks would be financially wiped out. However, their balance sheets have now improved, and now €200 billion of their debt is now owned by the vulture funds.

PS: The €3 million cap on PIAs works like this. A borrower who owes more than €3 million on "secured" debt cannot do a PIA unless ALL the secured borrowers consent to participate in the PIA.

Jim Stafford
 
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