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.
Michael Lowry TD condemns the chaos & heartbreak caused by Bank Repossessions
Following a review undertaken by Deputy Michael Lowry TD; he is now aware that appearing before the Court in Nenagh on Thursday last, financial institutions sought 86 applications for home repossessions, with similar figures being repeated in Clonmel and Nenagh every couple of months. The majority of these applications are causing intense anxiety, distress and disruption to Tipperary individuals and their families, who remain, firmly, the victims of a banking industry which has been permitted to run out of control.
This same banking industry was led by exorbitantly well-paid executives with all of the resources of economists, blue-chip accountancy firms, together with consultants, at their finger-tips. Despite this scenario, their corporate structure fully succeeded in detonating a massive, caustic explosion within the Irish economy, not just demoralising their customers but collapsing the very foundations of its own structures. Despite this financial catastrophe, the Irish Government and tax-payers combined to bail out these financial institutions at huge costs, thus saving them from their own avaricious negligence and wilful recklessness.
Deputy Michael Lowry now probes the question:
“What have the Irish people gained from these financial institutions, in return for their largesse and support?”
“While we are still caught in a difficult and dangerous situation and ‘on the hook’ for tens of billions, which these banks, through absolute avarice, have cost this country; we nevertheless still have these same arrogant bankers treating ordinary house-holders and their families with ruthless aggression. Do not be misled by Government propaganda; their Insolvency Service is just another quasi-autonomous non-governmental organisation; a quango if you will, with banks still allowed to hold a veto over all mortgage arrangements.
“Mortgage holders presently in financial difficulty are being treated in horrendous ways; terrorised out of their homes without any proper or real engagement; designed to restructure mortgages and achieve civilised and humanitarian solutions. On top of this, we have the disgraceful situation of huge regulatory fines being imposed on the parent banks of some institutions operating and advertising here in Ireland; arising from the fraudulent manipulation of interbank benchmark rates and foreign exchange markets.
“I am almost on a daily basis, being confronted with appalling instances of financial institutions being allowed to ignore their own wrong-doings and trample on Irish borrowers. I have been consulted by one parent, in the building sector, who in addition to his family home and with a view to helping pay for his children’s education, bought just one ‘buy-to-let’ house in 2006. With the collapse of the building industry, he still managed to find occasional work, but fell into arrears. These arrears which, at their very worst, rose to just €5,500, had by 2013, been reduced to €1,600. However his financial institution still appointed a Receiver, sold his house and pursued him through the Courts to reclaim the balance.
“Yet another vulnerable family were convinced by a Broker that he could get them a Mortgage in circumstances where they should never have been approved. He took a fee of €2,500 from them for his work; got them a mortgage which realistically could never be paid and they in return are now being hounded out of their home by their financial institution, which accepts no responsibility in the matter.”
These are just two examples from numerous similar situations.
“At present, borrowers are being held to account for their behaviour, however financial institutions are permitted to sail completely free of having to take any share of the responsibility for the chaos, distress and heart-break, which has resulted from this present financial crisis. Again, I state that this recent crisis has been caused primarily by these same financial institutions, who had all the ‘top-notch’ advice and who have spent the past year before the Banking Inquiry, unable to recall their actions and refusing profusely to take any responsibility for their totally dissolute actions.
I firmly believe that borrowers, particularly distressed home-owners, should get some respite. Why should thousands of individuals and whole families be put on local authority housing lists, simply because bankers went fanatical; wildly encouraging people to borrow 100% loans, most often knowingly aware of peoples inability to repay?
“I demand a new deal for distressed home-owners under which our banks and Vulture Funds, which bought many of their Loan Books, will immediately be forced to enter into the following arrangements with borrowers. In other words, where a borrower is committed to an agreed affordable repayment situation (initially for a trial period of say 2 years), same should be permitted to keep their homes, on the condition that they abide by same pre-agreed affordable repayment. Legislation to compel these arrangements should be a priority for any incoming Government.”