‘Croke Park of people will lose their homes’ - warning in wake of loan sale

Thousands of people who are in danger of losing their home are the "hidden homeless" according to David Hall of the Irish Mortgage Holders Association.

He was commenting after Ulster Bank confirmed on Tuesday that it is selling 3,200 owner-occupier mortgages, where it loaned €810 million to people to buy their own homes.

In addition the lender is offering for sale 400 buy-to-let mortgages, where it loaned €90 million to people to buy properties that they rented to others.

The bank signalled late in 2018 that it intended selling boom-era home loans where borrowers are several years in arrears.

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As a result, more than 3,000 home owners, who owe Ulster Bank €900 million, face the prospect of their mortgages being sold to a vulture fund.

"These people were treading water for so long, now they are drowning," Mr told RTÉ radio's Morning Ireland.

“People simply can’t pay the loans. They can’t meet forbearance measures.”

Mr Hall said that many of the people were living in their homes while they engaged with the banks, but they were essentially “the hidden homeless” as they would soon be without a home.

“These people will lose their homes. This is where the tsunami begins,” he warned. Mr Hall has repeatedly of a tsunami of home reposessions.

Repayments

Ulster Bank’s figures show that the average owner-occupier involved owes arrears of €33,000 and is 58 months behind with repayments. The buy-to-let customers have fallen 41 months behind and owe €36,000 in arrears on average.

The bank is likely to sell the loans for less than the €900 million owed, but the borrowers will still be liable to repay the full amount to any buyer.

It is thought a “vulture fund”, that is an investor which buys debts or other assets in financial difficulty at a discount, could purchase the mortgages.

US company Cerberus, which over the past five years has bought Irish property debts on which more than €20 billion was due, has purchased several tranches of troubled loans from Ulster Bank.

Deal

Mr Hall described as “utter rubbish” suggestions that people could be better off dealing with so-called vulture funds who would “do a deal”. The modus operandi of vulture funds was to “buy cheap, sell high,” he said.

Mr Hall encouraged people in mortgage distress to contact insolvency services, MABs and insolvency practitioners. “They should engage. There is a bit of hope, but not much.”

He also warned “this is the beginning of outsourcing. The tsunami of repossessions is coming, it has been coming for five years. A Croke Park of people will lose their homes.”