Proposed IBRC mortgage sale based on ‘imperfect’ information, Dáil told
Thousands of homeowners face eviction if sale goes ahead to ’vulture’ funds, say TD Stephen Donnelly
Stephen Donnelly has called for IBRC sale to be “paused”, claiming “it is entirely possible that allowing families to bid for their own mortgages would garner the same sales prices, or even more than the current process does”½
The special liquidator of the 13,000 IBRC mortgages is acting on “imperfect information” it has been claimed in the Dáil.
Independent TD Stephen Donnelly called for the sale to be “paused” and claimed “it is entirely possible that allowing families to bid for their own mortgages would garner the same sales prices, or even more than the current process does”.
Tánaiste Eamon Gilmore said, however, that Mr Donnelly knew “the risk to the taxpayer of an interference by the State in the liquidation process”.
Mr Gilmore said it was “easy to say ‘let’s pause the sale’. There are consequences to that which might arise from actions taken by other creditors” and other people in the liquidation process.
The Wicklow TD raised the sale by the KPMG liquidator of the former Irish Nationwide mortgages to venture capital “vulture” funds, during leaders’ questions yesterday.
He claimed that thousands of mortgage holders were at risk of eviction and cited the example of a couple with two children and a €220,000 distressed mortgage.
They were not in a position to repay it but they could refinance at €150,000.
The Wicklow TD said, however, the liquidator would sell the mortgage for a conservative estimate of €100,000 or even as little as €50,000.
He added that the liquidator did not disagree with him at the finance committee on Wednesday when he said the eventual purchaser of the loans would “quickly ascertain” that the couple could not pay the €220,000 and after establishing there was equity in the house, would initiate proceedings and evict them and their children.
Mr Donnelly said the liquidator had told the finance committee that the PricewaterhouseCoopers report prepared for the sale did not provide advice on what the sales prices would be if mortgage- holders were allowed to bid and the liquidator was acting on imperfect information.
The process for the sale, shortly, of the mortgages to is based on the PwC report. Mr Donnelly said the mortgage holders had been refused permission to bid on their own loans but he claimed it was “entirely possible” the same or better price could be reached if families could bid.
Code of conduct
Mr Gilmore insisted however the Government had always been clear that “we will ensure mortgage-holders retain the protection of the code of conduct of mortgage arrears”.
And he stressed that if it became evident the voluntary application of the code was not delivering the required protection, the Government would introduce the required legislation.
Mr Donnelly said the agreement reached with the bidders for the IBRC, formerly Irish Nationwide loans to voluntarily adhere to the code, was not written down.
He said there would be no Central Bank oversight, sanctions or recourse to the financial ombudsman.