“VULTURE FUNDS ARE a cancer in our society.

“They have one thing on their agenda and that is feasting on the carcasses of those who suffered because of the gambling by banks.

Ordinary citizens whose lives collapsed when the crash hit.
Ordinary citizens who lost jobs.
Ordinary citizens who became ill.
Ordinary citizens who lost relationships.
Ordinary citizens who lost their lives.

“One of the greatest affronts to those citizens crucified by the recession was the government’s willingness to sell them out to vultures. Not only those in arrears but also those that had performing loans.”

There were strong words this morning from David Hall of the Irish Mortgage Holders Organisation (IMHO) as he told the Oireachtas Finance Committee that he believes 17,000 families will end up losing their homes if radical action is not taken.

The IMHO negotiates with creditors informally and formally via the insolvency service and provides a free bankruptcy service when all other options have been exhausted. A quarter of all those adjudicated bankrupt last year were clients of the organisation.

Since 2012, it has helped 8,000 families, with 90% of them staying in their home.  Hall and his fellow directors also set up ICare Housing, an approved housing body established to facilitate mortgage-to-rent.

It has been engaging with both AIB and Permanent TSB in relation to its distressed mortgages and there are 536 families in its pipeline. He said they expect to buy the first 99 homes over the next few months.

David Hall told the committee that banks need to be more clear about the fact that many of their customers in arrears simply can not pay.

“I am very proud of the work done by the IMHO team and board to date, but despite all of that work I have to say I genuinely fear we have entered a dangerous stage in the mortgage arrears story,” Hall said.

He said the fact that 190,000 restructures have taken place is welcome, but most benefit the banks. He also pointed out that vulture funds do not restructure loans.

“They buy to obtain the asset and sell it and profit. If you want to lose your home and possibly have a debt written off, then vultures are for you. If you want somewhere to live, well that’s an issue,” he explained.

They have no interest in our housing crisis. No interest in any of the stories of those affected. No interest in the people you in this Committee represent in your constituency clinics and in here.

‘A social evil’

Hall said people who claim vulture funds adhere to contractual terms need to understand that these contracts do not contain any clause requiring the loan owner to offer restructuring.

He pointed out that when a person goes into arrears, they have broken the contract by going into arrears and this leaves them exposed anyway.

“While banks are horrible, they must out of a mix of legal, fiscal and social necessity – and for reasons of PR – provide some solutions. Vultures are by contrast a social evil.”

Hall told the committee that there has been a “collective intended or unintended incompetence and/or conspiracy” to ignore the fact that the majority of people who are in arrears can not pay. Instead, he said, a narrative has been fostered that those in arrears who have not been resolved are “messers, strategic defaulters and non-engagers”.

“The majority of those in long-term arrears, which stands at 31,500 households can’t pay. ”

Hall said he believes that 17,000 families are impacted and will have their homes repossessed.

“This is because the banks have been complicit in hiding the human crisis and destruction that is ahead. They have hidden the fact that thousands of families simply can’t restructure their loans,” he said.

“This is a human crisis which has not been seen before and this is the actual issue rather than the vultures.”

According to Hall, the banks are “cowardly” for not telling the committee of the severe challenges that exist with customers who simply can not pay.

“They are outsourcing their dirty work and the vultures will respond enthusiastically by repossessing homes. I believe banks have taken another gamble that it’s better to take the back lash of selling family home loans to vultures rather than the chaos that will ensue if they repossess the numbers of their customers who can’t pay.”

The committee is continuing to hear from experts in this area – you can view the meeting here.