PERMANENT TSB BOSS Jeremy Masding has said the bank has 500 vacant properties on its books. 

Appearing before the Oireachtas Finance Committee today, Masding was questioned by Fianna Fáil’s Michael McGrath about the level of vacant properties it was holding. 

As of the end of December 2018, the bank has 1,193 residential units in possession. This compares to 1,793 homes it held at the end of 2017. 

Of that figure, 500 of the properties around the country are lying vacant. 

Masding told the committee that this is a significant reduction on the 1,100 vacant properties the bank held as of the end of 2017. 

McGrath said the 500 figure was still “extraordinarily high”, and questioned when the bank would be getting those houses back on to the market for sale. 

Housing crisis

The Fianna Fáil finance spokesperson told the PTSB officials that Bank of Ireland told the committee last week that it had just 79 vacant properties on its books.

Masding said the deputy was “not comparing apples with apples”, stating that the bank were engaged in an assisted voluntary sale campaign with its customers last year, which resulted in a ”spike” in the numbers of homes that came under their possession.

“What we did was lance the boil,” he said, adding that this campaign targeted customers whose loans “just weren’t working”. He added that the bank took possession of about 1,500 buy-to-let properties, writing off some debt in those cases. 

Of the 1,193 properties currently in its possession, about 300 are sale agreed, while the bank said it is actively selling 200. 

Around 750 of the houses have tenants in situ, said the bank’s officials. 

Committee members were told that the bank are “big fans” of the mortgage-to-rent scheme, which allows people to remain in their homes by paying rent. 

“We wish we could do more with it,” the committee was told.

However, the bank’s officials said it only has 23 mortgage-holders on its books that has gone through the mortgage-to-rent process, with another 40 lined up. In addition, about 150-200 homeowners are engaged with the process. 

Tracker mortgage scandal 

The issue of the tracker mortgage scandal was also addressed in committee today.

The tracker mortgage controversy saw tens of thousands of customers being overcharged by their lenders when they were either denied a tracker rate they were entitled to, or charged the wrong rate of interest on their mortgage.

Masding said that no one had lost their job in the bank over the scandal, stating that it was found the error was “not a deliberate action” but was a lack of control and oversight by the bank. 

He said the bank should be fined by the Central Bank, stating that the bank would engage with the Central Bank as to the scale of the fine.

“The fine will be as it should be and we will pay it as it should be,” said Masding.

Sinn Fein’s Pearse Doherty said as the “guilty party” PTSB will surely pay the fine that is determined by the Central Bank. Masding said there will be a “mature conversation” with the Central Bank, but it will not be a negotiation.  

When asked about PTSB’s best estimation as to what the fine might be, Breege Timoney, Product Assurance Director for PTSB said it could cost as much as €35 million.

He confirmed there has not been any material change in the figure since last December, which identified that 1,983 mortgage-holders had been impacted.

To date, redress packages has been taken up by 1,950 people. A total of 14 customers have decided not to accept payments from the bank at this point, while 19 account-holders have left the jurisdiction and cannot be found.

Selling off customer mortgages

On the issue of non-performing loans, and the selling off of its customer’s loans to vulture funds, Masding said he could not rule out further loan sales this year.

As a result of two loan book sales last year, the bank has reduced its non-performing loan (NPL) ratio from 26% to 10% . It should be noted that not all mortgage-holders included in the sales last year were non-performing loans, with the bank admitting last year that some performing mortgages were also sold on to other credit firms last year. 

The PTSB boss said the bank “still had a distance to travel” to reach the 3.5% NPL EU average. 

He added that the bank “continues to look at all options to reduce” its NPLs, but said he could not give assurances to its customers that are owner occupied that they would not be sold off in a sale this year. 

He said that in comparison to last year, 2o19 would not be on the same scale in terms of possible mortgage sale activity, but Masding was quick to add:

“I wouldn’t rule anything in and I wouldn’t rule anything out.”

No Consent No Sale Bill 

Sinn Féin’s No Consent No Sale Bill, which was passed in the Dáil, was also discussed at today’s committee meeting. 

The Bill aims to ensure that no mortgage can be sold by a bank to a vulture fund without the permission of the loan holder. The Department of Finance and the Central Bank has raised concerns about the proposed legislation. 

Masding said he shared these concerns, stating that the legislation will make it more difficult for banks to sell on their customer’s mortgages.

He said it would impact the bank’s competitiveness and could increase mortgage interest rates.  

Sinn Féin’s Pearse Doherty has said previously that such arguments were also made when Fianna Fail’s vulture fund regulation legislation was being discussed. This legislation was subsequently signed into law in December 2018. 

Today, it was reported that AIB is to cut to its fixed rate for mortgages. 

“Credit where credit is due,” tweeted Doherty today, who added that there was “scaremongering” by the department in relation mortgage interest rates rising if his No Consent No Sale Bill becomes law. 

“So much for Department of Finance officials warning that interest rates would rise if we regulated vultures. We passed law last year and rates going down not up. Red faces in Department HQ this morning,” Doherty said on Twitter.