MORTGAGE HOLDERS WHOSE loans have been sold to so-called ‘vulture funds’ will soon have their rights to the same degree as ‘regular’ borrowers.
The Department of Finance today published a consultation outlining its proposed approach to the issue, which emerged after the sale of loan books to unregulated private equity vehicles in recent months.
As the situation currently stands, the new owners of the loans are unregulated and therefore are not bound by any of the Central Bank codes.
This situation has been criticised by mortgage holder’s associations, as well as the Governor of the Central Bank, Professor Patrick Honohan.
The Government wants to ensure that borrowers whose loans were sold on “maintain the same regulatory protections as they had prior to the sale”.
Under the proposed legislation, the ownership of credit will become a regulated activity, granting increased consumer rights protections to the borrower and “(returning) consumers to the position in which they were before the loan book was sold”.
While the Department accepts that many of the new owners have been abiding by the consumer rights charters on a voluntary basis, this “is not the same as the consumer having the right to the protection of the codes”.
There can be no guarantee that the owners of the loan books will correctly and properly apply the codes without the supervision of the Central Bank.
The consultation is running until 22 August 2014.
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