Independent TD Michael Lowry has called on the Ulster Bank to reverse its decision to sell more than 900 distressed loans to ‘vulture funds’, in their efforts to rid themselves of acquired problem assets, mostly obtained during the so called boom era.
“This sale of assets by Ulster Bank, valued at €2.5bn, is made up of distressed business loans, buy-to-let mortgages and owner-occupier mortgages. Their decision is aimed at drastically eradicating all remaining so called ‘toxic’ property loans from its books on both sides of the border. However if carried out there exists a further fear that other banking establishments will most likely replicate similar procedures against their customers.
About €100m of the total face value of Ulster Bank loans, now being offered for sale, are owned by farmers and in many cases are linked to necessary on-farm business investments. This threat now comes at a time when Irish agriculture, in particular, is already on its knees with farm debt on an upward spiral, due to world market price volatility, which looks set to remain for the foreseeable future.
This threatened outcome by Ulster Bank is an appalling and insensitive approach to vulnerable business mortgage holders, who are currently finding themselves in financial difficulties. On a daily basis, I am confronted with appalling instances of financial institutions being allowed to ignore their own wrong-doings, while trampling and terrorising Irish borrowers.
This devastating threat, if carried through, will bring about the most negative and damaging of effects to families, overall business development in our regional communities and more especially will decimate attempts at any real rural recovery. If Ulster Bank mortgages are sold off to these ‘vulture funds’, then we will witness further new and increased cases of homelessness and a continuance in the escalation of private rental costs.
I now urge all banking establishments to develop new long-term funding arrangements and to immediately suspend their present threatening action. The vast majority of customers are keen to find a resolution to their current financial difficulties and should be given professional, independent advice on restructuring their outstanding loans. I also call for a renewed sense of urgency by the Departments of Finance and Public Expenditure, to assist in creating a more efficient funding mechanism to halt and reverse this recent banking decision” concluded Deputy Lowry.