This article was originally published by The Irish Examiner.
By Pádraig Hoare
Protections for mortgage holders will dramatically diminish if the sales of non-performing loans to so-called “vulture funds” continues, campaigners have claimed.
Members of the Free Legal Advice Centres (FLAC) and the Irish Mortgage Holders Organisation (IMHO) were appearing before the Oireachtas Finance Committee, where they voiced support for the proposed No Consent, No Sale bill, which would prevent banks from selling customers’ home loans without borrower approval.
The bill has been vigorously opposed by banks as well as the Central Bank and Department of Finance, who say it would provide no extra protection for customers but would have unintended consequences such as driving up interest rates for all.
The bill, which was proposed by Sinn Féin finance spokesman Pearse Doherty, was approved in the Dáil by TDs and is now under further consideration.
FLAC chief executive Eilis Barry said the blurred definition of a non-performing loan had contributed to banks selling customer loans to vulture funds even if they had approved restructuring in place with banks.
“The latest Central Bank figures suggest that there are currently 111,504 restructures of primary dwelling home mortgages in place…86% are classified by the bank as meeting the terms of the arrangement.
“Are these considered non-performing loans or not?
A key question, however, is why loans with such long-term restructure arrangements in place would be sold on in the first place,” Ms Barry said.
Legal protections also had to be enhanced for consumers whose loans have already been sold to funds, Ms Barry said.