Expert calls for public register of mortgages sold to vultures
The Government needs to set up a public register for households to track the new owners of their mortgage loans when they are sold onto vulture funds, a leading legal expert on mortgage arrears has said.
Paul Joyce, senior policy adviser at the Free Legal Advice Centres, or Flac, said sales of distressed mortgage loans quickened last year as banks sold off loans in arrears to vulture funds and other companies.
However, households have been left mostly in the dark over the identity of the beneficial owners of their loans when they are sold on by banks, according to Mr Joyce.
He said that the lack of transparency was troubling and politicians in the election campaign need to focus on the still-elevated level of mortgage arrears.
He said he was also concerned about a revision made to official mortgage arrears figures first published last year.
The call comes as new Central Bank figures showed that ‘non-bank entities’ held 12% of all home mortgage accounts at the end of September but accounted for almost half, or 48%, of all residential mortgages in long-term arrears. Those are defined as an account facing payment difficulty of over two years.
“It is worrying because the funds are not going to use the same tactics as the associated banks who do not want to be seen, to any huge extent, to be involved in repossession activity in the courts,” Mr Joyce said.
“Of course, a fund does not have any customer relationship. It doesn’t have an image to worry about. Its bottom line is, can I make a profit out of this?” he said.
He said a public register would help lift the secrecy over mortgage debt sales by banks.
“It is not like there is a transparent log kept by the Central Bank as to what portfolios of loans have been sold to whom.
That should be a piece of information that the public should be entitled to access on account of the phenomenon in recent months that loans which have been sold once, have been sold on again.
The new Central Bank figures show there were 61,802 residential mortgage accounts facing some sort of arrears at the end of September, down from a revised total of 65,043 in the second quarter, at the end of June.
However, Mr Joyce said he was concerned about the size of the revision applied by the Central Bank to the second-quarter figure, which was originally posted as 61,901.
A Central Bank spokesman told the the revision came about after one unnamed institution had to revise its figures, which led to an increase in the number of mortgage arrears outstanding.
The figures show that 88,587 residential mortgage accounts had been restructured by the end of September.
The vast bulk of the new deals struck between the mortgage lender and houseowners involve arrears capitalisation and split mortgages.
According to the figures, 86% of the restructures were following the terms of the new agreements. There were 150 mortgage accounts that faced a court-granted repossession in the third quarter.
Adviser concerned over revision to official mortgage arrears figures
