Government selling out on 13,000 former Irish Nationwide mortgage-holders
Loans have a combined par value of €1.8bn and have been split into four portfolios
Irish Nationwide liquidators– Kieran Wallace and Eamonn Richardson of KPMG –have extended the deadline for bids until early March. Photograph: Alan Betson
A right hornet’s nest has been stirred up this week over the fate of the more than 13,000 former Irish Nationwide mortgage-holders whose home loans have been packaged up for sale to the highest bidder by the special liquidators of Irish Bank Resolution Corporation.
The loans have a combined par value of €1.8 billion and have been split into four portfolios, which have been offered for sale on the open market. Little detail has been made public about the portfolios but only one of the four is thought to be performing.
The liquidators– Kieran Wallace and Eamonn Richardson of KPMG –have extended the deadline for bids until early March. If some or all of the loans cannot be sold, they will be transferred to the National Asset Management Agency, which in turn has lined up Pepper Asset Servicing to manage these loans on an outsourcing basis.
The borrowers were informed some time ago about the process and told they could buy their loans at full face value. Otherwise, the liquidators would package them up and sell them off.
As you might imagine, there aren’t too many people in Ireland right now in a position to pay off their mortgages in full. Hence the portfolio sales that are in train.
The charge levied against the Government is that there’s one rule for the rich and another for the ordinary Joe. This is a reference to the fact that certain corporate loans were sold at big discounts while mortgage holders were told that they had to pony up the full amount to buy out their loans.
This isn’t exactly true. There were only about 20 individual corporate loan sales with the balance packaged up into portfolios – Evergreen, Rock, Salt and such like.
Access to funding
The reality is also that certain corporates and wealthy businessmen such as Denis O’Brien had access to funding whereas the vast majority of the Irish Nationwide mortgage holders would struggle to refinance their home loans.
Some time back, Minister for Finance Michael Noonan was asked in the Dáil if he had considered transferring the Irish Nationwide mortgage book to other banks rather than selling them to the highest bidder.
AIB and Permanent TSB are both more than 99 per cent owned by the State and both have invested a lot of time, money and manpower towards building units to deal efficiently with loan arrears and collections. PTSB chief executive Jeremy Masding believes the arrears management unit he has set up is among the best in the world.
The Minister said this wasn’t an option as the liquidators were mandated to secure the best price possible while overseeing the liquidation for the “benefit of all creditors of the institution, including the State”. Taking a different path could have left the whole liquidation process open to challenge, he said.