Vulture fund will repossess most of PTSB loan portfolio – activist

A vulture fund that is buying almost 2,000 mortgages from Permanent TSB will repossess most of the homes involved, one activist warns.

Majority State-owned Permanent TSB is selling 1,932 home loans that have fallen into arrears to Start Mortgages, part of US vulture fund Lone Star, for €264 million, slightly more than half the €506 million that the borrowers owe.

Following news of the deal, David Hall of the Irish Mortgage Holders' Organisation, warned that Start would repossess most of the homes involved and had no intention of reaching agreement with the borrowers.

Loans tied to private dwellings, likely to be mostly family homes, account for 1,422 of the mortgages, while the remaining 510 are buy-to-let properties.

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Mr Hall argued that the 45 per cent discount to the total owed paid by Start-Lone Star showed they were interested only in the properties, not in restructuring borrowers loans to allow them clear the debts and keep their homes.

“They have only one intention, that is to maximise profit and repossess the homes,” he said.

Permanent TSB chief executive, Jeremy Masding, said Central Bank consumer codes and regulations would continue to protect the borrowers after the loans were sold.

The lender also pointed out that Start and Lone Star would have to honour any existing repayment arrangements agreed with borrowers whose loans they are buying.

No announcement

Mr Hall criticised the State-controlled Permanent TSB for not announcing that it intended selling the mortgages, a step taken by others such as Ulster Bank.

“They do not have to tell anyone any more that they are selling customers’ loans. It is now a matter of course,” he said.

He suggested that Sinn Féin finance spokesman Pearse Doherty’s Bill outlawing the sale of mortgages without borrowers’ consent had spooked Permanent TSB.

A spokesman said that the bank held a process that originally involved several bidders.

Permanent TSB defines the loans as “non-performing”, industry jargon for debts whose arrears lenders believe borrowers have little chance of clearing.

The deal cuts the proportion of bad loans on Permanent TSB’s books to 7 per cent from 10 per cent.