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File: A permanent TSB bank. PA Archive/PA Images

PTSB defends timing of letters to homeowners about mortgage sale to vulture fund

The announcement was made about the loans earlier this week – and it has since emerged that the portfolio included performing loans.

PTSB HAS DEFENDED the timing of the letters it sent to customers to inform them that their loans had been sold to an affiliate of a US ‘vulture fund’ .

It was announced earlier this week that Permanent TSB had sold its controversial Project Glas loan portfolio to an affiliate of the so-called vulture fund Lone Star for around €1.3 billion. The affiliate is called Start Mortgages.

The portfolio contains 10,700 home loans, which the bank dubbed at the time “non-performing loans”. A total of 7,400 are owner-occupier mortgages, while 3,300 are buy-to-let properties.

However, it has since emerged that the portfolio included performing loans.

The sale was criticised by the Irish Mortgage Holders Organisation as well as Fianna Fáil.

It was also criticised this weekend that mortgage owners received letters about the sale on Friday.

Asked about this, PTSB said in a statement:

Having announced the loan sale on Tuesday last, it was important to contact impacted customers as quickly as possible. Accordingly, letters were posted in order to arrive with customers from Friday. In the absence of written confirmation, customers would have spent time waiting to know whether their loans were or were not included in the transaction, the Bank did not believe that was reasonable.

It said that when announcing the loan sale last Tuesday the bank set out some of the key characteristics of the portfolio of loans being sold as follows:

  • Contains non-performing loans linked to a total of c.10,700 properties made up of 3,300 Buy-To-Let Properties and 7,400 Private Dwelling Houses (‘PDHs’).

PDHs are primarily made up of:

  • 2,500 classified as accounts deemed “Not Co-Operating”
  • 3,850 classified as accounts which have refused treatments or where the account has failed to operate in line with the agreed ‘Treatment’
  • Average arrears time of loans in the portfolio is 3.5 years (days past due)
  • Average arrears value of loans in the portfolio is €28,800
  • Average value of a loan in the portfolio is approximately €175,000

Yesterday, it said that in terms of PDH (private dwelling houses) loans, in addition to the two categories set out above the portfolio includes:

  1. Properties linked to loans which are performing/operating in line with an agreed restructuring plan but where the borrower has a second loan which is a non-performing BTL or PDH in arrears. In transactions like this, all connected mortgage loans transfer together.
  2. A smaller number of properties linked to non-performing mortgages where the customer may be engaging with the bank but, in line with CCMA, the bank has not been able to offer any restructuring terms that are both affordable and sustainable for the borrower

PTSB said that if a borrower has agreed a restructure or an alternative payment arrangement and they have consistently made payments in line with the terms of the restructure, then these terms will be honoured by Start Mortgages.

Start Mortgages is a retail credit firm regulated by the Central Bank of Ireland since 2008.

Concerned homeowners

Fianna Fáil Spokesperson on Finance Michael McGrath TD called on Permanent TSB to issue an urgent public statement on a number of aspects of the proposed loan portfolio sale to Start Mortgages.

Deputy McGrath said: “Thousands of mortgage holders received a letter from Permanent TSB informing them their mortgage is being sold, including relating to 7,400 family homes.”

He said that given the timing of the letters, “it is hard to avoid the conclusion that the bank deliberately chose the timing to avoid as much scrutiny as possible”.

In my view, the timing of this announcement is cynical and is adding to the stress and worry of affected borrowers during the holiday season.

He said he was contacted by many mortgage holders “who have been taken completely aback to learn their mortgage is being sold”.

“Many bank customers are shocked to learn their loan is being sold,” he said.

“As the shareholder owning 75% of the shares in the bank, the Minister for Finance has a duty to ensure that the bank answers a series of key questions about this loan sale,” said McGrath.

“We also need to know the respective role Start Mortgages and Lone Star will play in this portfolio sale. Is it the case that Start Mortgages is merely going to act as servicing agent to the loans with Lone Star making all the decisions in the background?

“Will the new loan owner actually engage constructively with borrowers and be willing to enter into the mainstream restructuring arrangements such as term extension, arrears capitalisation, split mortgage and interest only?”

McGrath said that there are “major questions” about the proposed sale and the way it has been handled.

“Both the bank and the Minister now need to step up and provide some answers.”

A spokesperson for the Department of Finance said:

PTSB has an unacceptably high level of non-performing loans as defined by its regulator, the SSM. All banks in Europe with higher than average NPLs are under regulatory pressure to significantly reduce their percentage of NPLs. This transaction is therefore important to ensure that Ptsb is a safer and more viable bank in what is a relatively concentrated banking market.
The Department of Finance notes the purchaser of the Project Glas portfolio, Start Mortgagesis a retail credit firm regulated by the Central Bank of Ireland since 2008. Like PTSB, Start Mortgages are required to comply with the Consumer Protection Code (CPC) and the Code of Conduct for Mortgage Arrears (CCMA) when dealing with borrowers who are in arrears. If a borrower has agreed a restructure or an Alternative Payment Arrangement (ARA) with PTSB and they have consistently made payments in line with the terms of the restructure then these terms will be honoured by Start Mortgages.

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38 Comments
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    Mute Willie Bill Bryan
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    Aug 5th 2018, 6:44 AM

    So we own the bank and our Pascal has no imput , except In putting his cycling expenses in for payment !

    225
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    Mute Neal Ireland Hello.
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    Aug 5th 2018, 6:16 AM

    It especially infuriating that the affected customers were informed in writing in a speedy and efficient manner, apparently.

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    Mute Martin Critten
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    Aug 5th 2018, 8:23 AM

    @Neal Ireland Hello.: yes perhaps more efficiently than the years of none discussion and talking to the hand approach they had with their customers. This was their game plan from the outset, after the State crippled itself to assist them. disgraceful.

    69
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    Mute Walt Jabsco
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    Aug 5th 2018, 11:08 AM

    @Martin Critten:
    The majority of these loans are held by individuals who refused to engage with the bank when they went into arrears, not the other way round.

    23
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    Mute Rory J Leonard
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    Aug 5th 2018, 6:51 AM

    It would appear that the 1200 + fully performing mortgage loan customers here were thrown to the wolves merely because they had non-performing personal loans of the non-mortgage variety. Shameful carry-on!

    There’s nought as pure as a reformed hoor of a bank!

    133
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    Mute filthypete
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    Aug 5th 2018, 7:10 AM

    @Rory J Leonard: you made your point the first time!

    13
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    Mute Vic's Burd
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    Aug 5th 2018, 8:27 AM

    @Rory J Leonard: where in the article do they refer to “non-performing non-mortgage loans”? It’s people with two mortgages which are linked: one on principal residence performing fine but in arrears on second property.

    I know someone in this situation and the advice they got was to sell the BTL/second home pay off the arrears and consolidate the remainder into the mortgage onto the family home over longer timeframe. Much cheaper and manageable but they refused.
    Can’t blame a bank for deciding to pass them on…

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    Mute Walt Jabsco
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    Aug 5th 2018, 11:14 AM

    @Rory J Leonard:
    People with performing mortgages aren’t being ‘thrown to the wolves’. As long as they’re maintaining the repayments they agreed to in their original mortgage contract there’s not a damn thing the vulture fund can do about it – nobody can unilaterally change the terms of a contract.

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    Mute Lydia Lee
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    Aug 7th 2018, 11:11 PM

    @Walt Jabsco: Not entirely true. Some restructured agreements are set in place for 3 years. After this period they are reviewed and at that point Start Mortgages can choose to refuse the payment the borrower can offer to pay.
    I am a restructured mortgage, I put down 20% payment on my mortgage but after a horrible crash leaving me unable to walk we were down to single income and had no choice but to restructure. Fought long and hard for it and eventually secured it.
    We have a very tight budget with no wiggle room, we’ve put everything we had into our home and to loose it now would be devastating. We would end up on a housing list and not being able to live in a house with stairs I can see we wouldn’t be able to find a home soon at all.
    My friend has two restructured loans, no late payments and he has had his mortgages sold also.

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    Mute Dave Doyle
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    Aug 5th 2018, 7:11 AM

    Just like i don’t believe one word from FG or their partners in government FF, i don’t believe one word from the banks.
    FG brough in the Vultures to sustain a rotten to the core banking system and save it from collapse.

    106
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    Mute Willy Malone
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    Aug 5th 2018, 8:17 AM

    Timing is everything.. Be sure FFG and Liebour had an input in the timing..
    Vultures always get their pound of flesh at the right time..

    57
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    Mute eddie lawlor
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    Aug 5th 2018, 1:27 PM

    My Ptsb morgage was sold to Lone Star i got letter on friday stating 2 months to trabsfer
    House is in equity
    I have No other loans
    I HAD 6 MONTHS ARREARS CAPITALISED
    Had restructure agreeded with Ptsb morgage advisor
    I am up todate with payments and always engaged with ptsb morgage advisor
    PTSB ARE LIARS with there figures

    39
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    Mute Walt Jabsco
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    Aug 5th 2018, 1:49 PM

    @eddie lawlor:
    Their figures are averages – yours may well be one of the less severe cases.

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    Mute Dave Stewart
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    Aug 5th 2018, 2:23 PM

    @eddie lawlor: I got the same letter on Friday, had fallen back by a few thousand euro and had slight restructure which we had complied with and we’re back
    O, track again. Only 90k left on Morgtgage and house worth 350k. Then these b@stards throw us to the wolves. Now I’m going to have to sell family home and probably won’t
    Be able to get another Morgan. Great government, great banks, , great country…. I’m getting out of this hole of a country for good.

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    Mute Ciara Sneyd
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    Aug 7th 2018, 9:54 PM

    @eddie lawlor: I’m in the exact same situation! PTSB were useless when I contacted them this morning. I have all my paperwork from any correspondence I’ve ever had with them. I was told by someone today that some loans have required too much admin & are therefore being sold off. I don’t have 1cent in arrears owed to them. I’m sick to my stomach!

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    Mute Patrick Dowd
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    Aug 5th 2018, 11:39 AM

    with all the people that are homeless at present .
    what are the government going to do now with may be 50 .000 more added to there list .
    people of this country bailed the banks out , and will be paying for it for the rest of there lives . the thanks they get now . is been bailed onto the street s .
    if they government don’t do something fast , there will be civil unrest in Ireland .

    27
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    Mute Greedylocks
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    Aug 5th 2018, 12:15 PM

    @Patrick Dowd: for the so called homless or the al fresco set as i like to call them its totally a life style choice. Free food, clothes and more than generous state hand outs. Who wouldn’t like passing the day putting the world to rights with a few drinks with your friends. The government provides world class services and facilities to any one who needs them.some individuals or just naturally lazy and need to be corrected

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    Mute Roy O'Rourke
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    Aug 5th 2018, 8:21 AM

    I wonder what Rory J Leonard makes of it all

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    Mute Dave Walsh
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    Aug 5th 2018, 7:34 AM

    If I hold the phone further away its like reading an echo…

    18
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    Mute Mar Ken
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    Aug 5th 2018, 10:53 AM

    A realistic option would be for borrowers in serious arrears in Dublin to surrender/sell their house (while prices are high and demand in Dublin) pay off loan and if they have equity loan and arrears repaid, then buy/move/rent outside Dublin. Then commute to Dub or wfh some days if still have a job employer is reasonable. Property is half the price outside Dublin. It’s not worth living in Dub if can’t pay the mortgage or bills.

    17
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    Mute Rory J Leonard
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    Aug 5th 2018, 6:52 AM

    It would appear that the 1200 + fully performing mortgage loan customers here were thrown to the wolves merely because they had non-performing personal loans of the non-mortgage variety. Shameful carry-on!

    There’s nought as pure as a reformed h o o r of a b a n k!

    22
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    Mute Robin Tobin
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    Aug 5th 2018, 9:48 AM

    A bird can build a nest a human can’t and a human cannot live in a nest. I believe a bank has to function as a bank . Our government are idiots. They argue the problem and never mention the solution. Europe has cheap money to lend. There a lot of empty nester houses the government after the next election should borrow this cheap money buy up as much empty Nestor properties rent them out to people who are waiting for a front door home of their own and use that money to pay Eu cheap loan back.

    I think Leo, Simon, paschal , Eoin should be booted out at the election by the people. In 2015 five days before Christmas between walking from Pearse street station to Dame street I witnessed over 30 people sleeping rough since then it has got worse. We need to call time on these idiots who argue the problem but fail to mention a solution. The sad reality is they could have borrowed this cheap money even to build since 2012.

    33
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    Mute Don O Sullivan
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    Aug 5th 2018, 8:39 AM

    It would appear that Rory J Leonard is commenting individually for the 1200 + fully performing loan paying customers ;-)

    14
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    Mute Conor Walsh
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    Aug 5th 2018, 10:14 AM

    This PTSB ad was brought to you by Rory J Leonard. Terms and conditions apply. If you do not keep up your payments you may lose your home

    15
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    Mute Rory J Leonard
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    Aug 5th 2018, 7:36 AM

    Aoife,

    Why does it say (sometimes) there’s a problem with a post after one has actually been accepted?

    12
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    Mute Walt Jabsco
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    Aug 5th 2018, 11:17 AM

    @Rory J Leonard:
    This is a tech glytch that first appeared a couple of weeks ago – it seems that the Journal’s techies must all be away on holidays at the moment.

    3
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    Mute Rory J Leonard
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    Aug 5th 2018, 6:53 AM

    It would appear that the 1200 + fully performing mtg customers here were thrown to the wolves merely because they had non-performing personal of the non-mtg variety.

    There’s nought as pure as a reformed…

    10
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    Mute Mar Ken
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    Aug 5th 2018, 11:02 AM

    It would be interesting to see the statistics for the loans sold. How many are for properties in Dublin compared to rest of the country. Most of jobs in Dublin. People commuting from every county. Cost of living in Dublin in the main issue why people, families can’t keep up with mortgages, bills, credit cards, lifestyle costs all of which are unsustainable but keeping up with the Jones mentality, expensive houses, cars, holidays, lifestyle.

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    Mute Dave Stewart
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    Aug 5th 2018, 3:17 PM

    @Mar Ken: “keeping up with the Jone’s mentality”, people are going without food, gas, electricity and haven’t had a holiday for years trying to keep these B@stards
    Off their back and then get thrown to the wolves anyway. Great banks, great government, great country.

    1
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    Mute Rory J Leonard
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    Aug 5th 2018, 6:52 AM

    It would appear that the 1200 + fully performing mortgage loan customers here were thrown to the wolves merely because they had non-performing personal loans of the non-mortgage variety.

    There’s nought as pure as a reformed…

    5
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    Mute Rory J Leonard
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    Aug 5th 2018, 6:54 AM

    It would appear that the 1200 + fully performing mtg customers here were thrown to the w o l v e s merely because they had non-performing personal of the non-mtg variety.

    There’s nought as pure as a…

    5
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    Mute Rory J Leonard
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    Aug 5th 2018, 6:52 AM

    It would appear that the 1200 + fully performing mortgage loan customers here were thrown to the wolves merely because they had non-performing personal loans of the non-mortgage variety. Shameful carry-on!

    There’s nought as pure as a reformed…

    6
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    Mute Rory J Leonard
    Favourite Rory J Leonard
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    Aug 5th 2018, 6:51 AM

    It would appear that the 1200 + fully performing mortgage loan customers here were thrown to the wolves merely because they had non-performing personal loans of the non-mortgage variety. Shameful carry-on!

    There’s nought as pure as a reformed h o o r of a bank!

    6
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    Mute Dave Stewart
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    Aug 5th 2018, 9:20 PM

    @Rory J Leonard: Walt Jabsco: I got the same letter. We fell back a few months as I had a severe injury which meant I couldn’t work but we paid every month and restructure slightly as we’d fallen behind a few months. We are and have been back on track for a few months now. House worth 350k and only 90k left on mortgage yet these b@stards throw my family to the wolves. Going to have to sell house now for no good reason as no intention of pay those f$cks a penny. Probably won’t be able to get another morgage now.
    Great government, great bank, great country.
    Basically it looks as if myself, my wife and two young children are being force to leave this country for no reason.1 THE MORGAGE IS NOT IN ARREARS. 2 WE HAVE NO OTHER BORROWING, ZERO.

    1
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    Mute Rory J Leonard
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    Aug 5th 2018, 6:53 AM

    It would appear that the 1200 + fully performing mtg loan customers here were thrown to the wolves merely because they had non-performing personal loans of the non-mtg variety.

    There’s nought as pure as a reformed…

    4
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    Mute Marcus Bruce
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    Aug 8th 2018, 8:50 AM

    I have 1 mortgage and 1 loan with PTSB.
    Neither have arrears owing, and my only indiscretion is a few late payments, but certainly no arrears over the past 16 years.
    Even when I was made redundant, when PTSB were being bailed out by the tax payer, I continued paying my loan !
    I now find my performing loans added to the sale despite PTSB denials.
    Shameful !

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    Mute jackson
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    Dec 1st 2018, 11:46 PM

    I want to thanks this loan company that offered me a legit loan for Christmas and to start up a business in Florida. If you need a legit loan contact.. halifaxloan@fastservice. com

    1
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