Taoiseach says selling mortgages in batches of thousands “more efficient”

IBRC residential mortgages are for sale in batches of several thousand because it is a “more efficient method of disposal”, Taoiseach Enda Kenny has said.

Selling the mortgages in a portfolio was the method “most likely to give best results in terms of the ultimate sales by the special liquidator, having regard to the public interest”, he said.

Mr Kenny was responding to Independent TD Stephen Donnelly, who appealed for the Government to look again at the issue of mortgages.

He said the IBRC was planning to sell 13,000 mortgages on the open market and he expressed concern that individual homeowners “will not be allowed to bid for their own mortgages. The special liquidator plans on selling their mortgages in batches of several thousand at a discount.”

International financial firms
Under the current plan "that discount will be turned into profit for large international financial firms rather than being used to benefit thousands of Irish families as it could", the Wicklow TD said.

He had spoken to people like Denise McCormack and Mike Hurrell, who were featured on RTÉ's Prime Time . Selling their mortgages in this way to international financial firms would strip families of important protections from the Central Bank, the code of conduct on mortgage arrears and the financial ombudsman.

Mr Donnelly said "this has already happened to many Irish families". He said Apollo Global Management from the US and the Pepper Group from Australia had bought thousands of Irish mortgages. Both firms were voluntarily conforming to the Central Bank guidelines and were to be congratulated for doing so. "Unlike domestic banks, though, they were not required to do so."

'No protection'
But he warned that families with Irish Nationwide mortgages were right to be afraid. "Depending on who buys their loans, they could find their interest rates jacked up or themselves in court for repossession hearings. If that happens, they will have no protection from the Central Bank or the ombudsman under the current law."

He said that under the IBRC legislation passed last year, Minister for Finance Michael Noonan "has the power to direct the special liquidator to allow these families to bid for their own loans at the market price" but he refused to exercise that power because it would be more efficient to sell the loans in batches.

He suggested to the Taoiseach that Irish Nationwide mortgage holders “should be allowed to bid for their own mortgages at whatever discount is being offered to international financial firms”.

Mr Kenny said the Minister for Finance had already dealt with the issue. The special liquidator has full responsibility for determining how the assets of IBRC are sold.