Ulster Bank sells 5,200 mortgages to Cerberus

[RedOnion]

But those on non-tracker mortgages are vulnerable

But are they?

Taking this UB sale specifically for a moment. Are the mortgage contracts not tied to a UB variable interest rate? Irrespective of the fact they've sold to a 3rd party, are they not still tied to the UB rate as long as it's available? I haven't looked at UB contracts, so I might be wrong on this.

It's different in the case of a entity selling their residual book and winding up, as the reference rate ceases to exist.

I try not to generalise, but in the vast majority of non performaning loan sales, it doesn't matter from the purchasers point of view if they charge 0% or 10%. All they will ever hope to get back is the value of the collateral, less legal costs.

 

[RETIRED2017]

If any bank raised it's rates like that people would be unable to repay their loans, property would collapse in value and the banks would go bust again.

It would be chaos. Is it likely that a vulture fund would hike mortgage rates, have they done it anywhere else.

The aim of the vulture funds is to sell on the mortgages that are preforming some already would be classified as preforming by the central bank if they were bought back by the same banks the day after the are sold ,
Some are being sold that do not meet central bank requirements as performing , If the same bank bought the same loan back the following day from the so called vulture funds they would be preforming loans according to central bank ,

 

[newtothis]

If any bank raised it's rates like that people would be unable to repay their loans, property would collapse in value and the banks would go bust again.

You've just highlighted a reason the vulture funds are different from the regular banks. A "normal" mortgage provider has to exist in the real-world economy. They rely on a stream of new business and customers to exist. Could AIB raise their interest rate to 10% in the morning? I doubt there's anything in their contract that would prevent it (unless it's a tracker). Would they do it? I'd suggest the answer is "no": they exist in a competitive and regulated market.

It's naïve to think contracts protect you and it’s irrelevant who the other party to the contract is, especially one that is one-sided such as a mortgage contract (if you don’t think it’s one-sided, I’d suggest you check yours to see if the borrower as well as the lender has the right to re-assign).

As yourself the question: would you be equally happy to sign any given contract with Donald Trump as you would with Pope Francis?

Is it likely that a vulture fund would hike mortgage rates, have they done it anywhere else.

Vulture funds business model is to get a fast return on their investment. Why wouldn’t they jack up rates, both to increase their short-term income and provoke people to move lender, thus giving them an immediate return? Have they done this? I’ve no idea, but I wouldn’t want to be waiting to find out!

 

[Carrot/stick]

Go on, give us a real example of why people who abide by their mortgage contracts should be worried? You keep hinting at scary possibilities but you have yet to give us a concrete example of one.

Ahh that is a real example, it doesn't have to be super complicated and it is an entirely plausible situation.

 

[Itchy]

About Cerberus aka Promontoria (Pluto) Ltd

· Have already bought mortgages from Ulster Bank, Danske and Stepstone

· Loans will probably be managed by [broken link removed] ( formerly Capita )

· Cerberus is the three headed dog which guards the entrance to the Underworld

Are there any regulatory requirements that Cerberus/Promontoria/Link have to meet in order to service/own mortgage debts? Do they have to be regulated by the Central Bank or meet investment firm regulations? What obligations do Ulster Bank still have even if the loan was performing?

EDIT: Answer here: https://www.citizensinformation.ie/...er_protection_codes_and_mortgages.html#l78608