Few things excite Irish people like mortgages. It’s hardly surprising; it is the biggest investment most of them will make and, more importantly, keeps a roof over their families’ heads.
So news that Ulster Bank is selling 3,600 mortgages, with total balances of €900 million – most of them on people's family homes – was always going to spark debate. More particularly because the debts are likely to end up with a so-called vulture fund.
Consumer rights campaigner Brendan Burgess has in the past backed similar sales by Ulster Bank but this time around, he has taken issue with the lender.
He argues that borrowers can repay arrears that are, on average, €33,000 and that the bank should come to some arrangement to do that instead of selling the loans.
While €33,000 sounds high, Burgess says borrowers could clear this sum if Ulster Bank extended their mortgages’ life by 26 months – the average number of payments borrowers have missed – or increasing repayments to €1,500 from €1,300.
Allowing all the affected borrowers to avail of the 2.3 per cent interest rate he says they recently promoted as being available to all mortgage customers would help, he says.
In response, Ulster just says no. Apart from citing the scale of arrears and number of missed payments, the lender says the borrowers affected have had five separate arrangements where repayments were lowered to allow them deal with financial difficulties. And it insists it made every effort to engage with borrowers before deciding to sell their loans.
Ultimately, regulators want Ulster Bank to cut the number of bad loans on its books. And the bank can argue that it is best placed to decide how to do so and which debts should ultimately be sold.
And it is not alone, Its rivals are also under pressure to reduce bad debt on their balance sheets. And so this debate will inevitably be rerun with at least one other bank in coming months.