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FINANCE MINISTER PASCHAL Donohoe has said he is conscious of the concerns of some homeowners who have engaged and reached a mortgage arrangement with PTSB, that they may not have their deals honoured by the buyer of the lender’s €3.7 billion loan book.
PTSB, which is 75% State owned, has been defending its plan to sell off a book of non-performing loans known as Project Glas.
The proposed sell-off of 18,000 properties, including 14,000 private dwelling homes, has become the subject of a political battle in recent days, and the issue dominated Leaders’ Questions yesterday.
TheJournal.ie highlighted to the minister this afternoon that some homeowners who have already made arrangements with the bank about paying their debt, such as split-mortgage arrangements, could have their deal thrown out if the loans are sold on.
The minister didn’t deny this was a possibility, stating:
I am very conscious, as you have highlighted, that there will be people that have restructured their mortgages that will need to engage with the lender again in the future and I am conscious of the worry they will have.
The minister said that “no legal rights that anyone has in the future will be affected in any sale, when and if that sale happens”.
The current legal rights of any home loan owner will be maintained.
Fianna Fáil has sought to challenge the government on this issue in recent days, and has launched a bid to block the planned PTSB sale to an unregulated vulture fund.
The party finance spokesperson Michael McGrath has proposed legislation to bring vulture funds in regulatory line with other banks and financial institutions.
The party is concerned that there are currently gaps in the protections available to mortgage-holders if the loans end up in the hands of vulture funds (which are so-called because they buy assets at low prices with a view to selling them on for a profit).
CEO of the Irish Mortgage Holders Association, David Hall told TheJournal.ie that under the present rules, subsidiary companies, that essentially act a middle-man between the mortgage holder and the vulture fund are regulated by the Central Bank, but the international vulture fund is not.
“The government are trying to deflect against the fact that thousands of mortgage-holders did the right thing, they engaged with the banks, they did everything they could to meet their payments, the bank offered them a deal, they signed that deal and have adhered to the contract,” said Hall.
Is the minister going to underwrite these agreements made with PTSB, and ensure that the buyer of these loans adhere to the agreements reached?
He questioned why such mortgage-holders who have engaged with the bank should be included in the sale, stating that under the code of conduct rules a “non-cooperating” borrower can only be deemed so if the homeowner is in arrears for three months and “where a borrower has not entered into an alternative repayment arrangement”.
Defending the sale
In a statement last night confirming it intended to move ahead with the sale, Permanent TSB said that around €2 billion worth of the loans it planned to sell on were comprised of private dwelling home loans.
It said the loans were “typically owned by customers who have not engaged with the bank, whose mortgages are unsustainable or who have been unable to meet the terms of various treatments put in place”.
Of this portion of Project Glas, some account holders have not engaged with the Bank for over 7 years and on average the loans are over 3.5 years in arrears.
Many have made no payments at all for years.
Last night, TheJournal.ie asked Permanent TSB’s spokesperson whether the bank could provide a further breakdown on how many customers had not engaged in over seven years. They said that no further information was available.
The request for a further breakdown of the figures was submitted again today.
The spokesperson said the bank would not be providing any additional information beyond what was in the statement yesterday.
Fianna Fáil’s John McGuinness, who is chair of the Oireachtas Finance Committee, told the Sean O’Rourke programme on RTÉ earlier today that it was not true that only people who are not engaging or are failing to pay their debt would impacted by the sale.
McGuinness said families who are engaging, and homeowners who have reached arrangements with PTSB will find their loans thrown into the loan bundle and sold on.
Donohoe told TheJournal.ie this afternoon that Ireland has a “legal framework that has ensured that loan owners have been protected from the kind of difficulties that we feared in the past”.
I will review that legal framework now again… to make sure it is as strong and as fair as it needs to be.
The minister said he was meeting with Michael McGrath to discuss Fianna Fáil proposals on to how to beef up vulture fund regulation, and he would also discuss the issue with the Central Bank today.
“I have always indicated that I would keep the legislation as to how these matters are dealt with under review. Today I will be asking the Central Bank on any further views they might have on the legal and regulatory arrangement that we have in how these matters are dealt with,” he said.
“I am deeply conscious of the worry and concern that an announcement like this has made,” said the minister.
However, he went on to say that as minister, he must ensure the bank has a viable future.
I need to ensure that PTSB has a secure future in Irish banking, which I believe it does. In order to do so, they need to, at the request of the regulator [the European Central Bank], address issues that are there, and what I will aim to do is build on the legal and regulatory environment that we have to make sure that everybody is treated as fairly as possible and I will do that work across the coming weeks.
“The future health of PTSB is vital to the Irish economy – it is our third biggest bank it has deposits of over €17 billion, it has over 2,000 people working in it – it is a vital element of how Irish banking can lend more to Irish companies, citizens and businesses in the future,” he said.
The level of non-performing loans with the bank stand at 28%, said the minister, adding that this is five times the European average and exceptionally high.
“It is very important in the coming period that the issue of non-performing loans in that bank be addressed,” said Donohoe, who added that it was the European Central Bank that has indicated that level of non-performing loan has to come down.
“PTSB are required to meet that direction.
“The are required to do this by the Central Bank – this is a European Central Bank which we have assigned responsibility to, to regulate banks that go above a certain size and the are being required to do that because the level of non-performing loans, such as on their balance sheet now, is a great difficulty for that bank now and could be a more acute difficulty if economic circumstances change in the future,” said the minister.
While the minister said he will be reviewing what regulations are already in place, in the same breath, he said the rules in place appear to be working:
“I will look at the regulatory environment that we have, the regulatory environment that has facilitated the elimination of a large number of non-performing loans in the banking sector in the last number of years – that has avoided the type of house repossessions that we feared in our darkest days. It is a strong environment that has the right level of regulation in place, but I will look at it afresh in light of the kind change that could develop to ensure it is as strong as it needs to be.”
The minister also said he is “confident” that the legal and policies in place at present will prevent mass home repossessions that have been threatened.
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Why is the Journal.ie closing the comments section on so many articles, as it’s making it close to not worth while reading it.
@Owen Mc: Agreed, my own position is straight forward…no comments no read.
@Owen Mc: The Journal doesn’t encourage any discussion. Just vote on the daily polls about silly subjects.
@Owen Mc: Glad they have closed it down. One less outlet for headcases.
@Wallace Mooney: That word is offensive. Use muppets instead.
@Owen Mc: My sentiments exactly.
@Owen Mc: they close the comments section as some tend to hijack the comments and post things that are off topic I.e refugees Isreal Gaza Iran US UK etc etc so until such a time as children learn to behave they can have their toys back.
@Owen Mc: for some articles such as open criminal cases, I can accept no comments. However, for divisive topics, it is becoming more than a little craven on their TheJournals part. I sent them an email, raising the issue constructive but received no response. I think there’s an opportunity for another news site to set up something similar where the public are far less muzzled.
@Injustice Cop: I’m sure they had a good laugh at your email.
People yesterday saying these absolute warnings are fear mongering! It’s not fear mongering, it was and is necessary warnings as the weather out there is lethal. I can see it with my own eyes, also took a smack of a metal door trying to get the wheelie bins in (ouch). Seriously, the comments from yesterday, saying governments are trying to keep us scared with weather warnings etc, that’s the fear mongering right there!!!!
Stay safe everyone, batten down the hatches!
@keith fay: same crowd will be out later/tomorrow banning on about how it wasn’t that bad and sure we always got storms…. oh ”records” showing that these storms are getting more intense and more frequent. Totally made up by the government.
@Ross: exactly, or saying ‘in my day we called that winter’ or something, so annoying
@William Slevin: we’re talking about people calling weather warnings ‘fear mongering’ when they’re just valuable weather warnings that serve a purpose
@William Slevin: met eireann issue a weather warning, news outlets report that warning. How on earth is that fear mongering. Reporting the news is not fear mongering, it’s reporting the news.
@William Slevin: oh dear, a full blown tin foil hat conspiracy nut. How long before you start talking about the ‘narrative’ lol
@keith fay: you are for it now Keith, you have drawn the William on you. Check out my interaction with him below, more fool me for responding to him.
Donegal has red warning, but Tyrone and Derry have amber warning. Must be handy to just cross the border until storm is over.
@Patrick MC Dermott: Perhaps the whole globe can be included in the red warning thus ensuring that nobody feels left out.
@Patrick MC Dermott: Where should the line be drawn??
@Sean O’Dhubhghaill: Around Tullaghan, would be a good spot
Why is that dude wearing a crop top?
@Tom O: You shouldn’t be assuming that dude’s gender in this day and age. Cop on to yourself!
Would journos at the Journal please stop using the phrase “kick in”? There are lots of other, less crude ways to transmit the same piece of information.
@Max: Force entry?
@Max: “journo” is a slang word from england. Only pointing it out because we know how offended you get by English words
@biggybald: Trespass?
Proper Mother-In-Law weather as it’s know down here..
Fair windy lads
@BaldwinIV: Oh my sweet lord – have we seriously reached that level of non-intellect. Vote no to a constitutional referendum on the place of a woman in the home because migrants…
You have to be taking the Michael because it’s not possible to be that dim.
Them two boy’s look like they’re surveying the damage after crashing their time machine.
His own bomb lol
Save the clock tower!
Hopefully it will be nice and sunny when it passes over tomorrow
Looks like Andrew Porter in the photo facing into a scrum with that clock
Got windy here in Galway… it’s blowing over now….
The Ronnie onslaught is happening again!
@William Slevin: ah, the bigot has another account
@Denis Ryan: Anyone need the lotto numbers, my prediction skills are off the hook.
@ establishment loyalist fascist Dennis Ryan:
Easy to predict when as usual your part of the same harresment campaign against that has been noted by other users on here…
@ establishment loyalist fascist Dennis Ryan: What sexual references would these be dennis, that fact I called out Brian on his degeneracy where he keeps going after other users repeatingly saying trump fancys his own daughter and says worse…or is that I called out robert weaponising homosexuality an entire group of peoples sexuality to make attacks against ron de santi…your a complete dishonest joke now…and you are becoming liably dangerous making such implications about sexual references…
You crossed the line in lying in such a serious way dennis…
@William Slevin: lol the ghost is back but for how long. Never reported any of your interactions with me, I’m a big boy and choose to reply. Different story when you insult other people though. I’ll soon be talking to myself again ;)
@William Slevin: you were banned but back you came. Only one habitual line crosser here. Awfully concerned about people in the middle East but only if they stay over there, I see you are banging on about immigration again on an article about cancelled flight. Reminds me of the Simpsons “old man shouts at clouds”
@Injustice Cop: What ‘opportunity’ is there for a news outlet to allow all the conspiracy nuts, racists and general loolaa’s to have a free for all in the comments section?
Nobody will want to advertise to that demographic (look at the losses X is making) – there’s no opportunity’
The real problem you lads have is that you are convinced that what you have to say is so important that the world is dying to hear ‘the real trutch’ – the reality is that it’s all utter nonsense and nobody is interested.
That Felicity McKenna, I like the cut of his jib!
Lucky no one was clocked……
have your say