Noonan will not oppose bill for IBRC mortgage holders
Published 04/03/2014 | 17:10
THE Government has decided not to oppose the passing of a Fianna Fail bill to protect IBRC mortgage holders.
Irish Bank Resolution Corporation, which was formally Anglo Irish and Irish Nationwide, is being liquidated and its mortgages sold.
The firms hoping to buy out the 13,246 mortgages said they would voluntarily observe the Central Bank’s code of conduct on mortgage arrears.
This is a rulebook setting out how people are to be treated when they genuinely can’t repay their mortgage.
At the moment the IBRC mortgage holders have full Central Bank consumer protections on their mortgages. But they will lose these protections if the mortgage book is sold to an unregulated fund from outside the State.
Fianna Fail’s Michael McGrath has proposed a bill that he said would give the mortgage holders full protections when the home loans are sold on.
In a statement Minister for Finance said the Government would not oppose this bill, but questioned if it would actually provide any protections for the IBRC mortgage holders.
“The Minister for Finance understands the concerns of mortgage holders in IBRC. However, this bill offers no additional protections to the mortgage holders over and above the voluntary agreement that the special liquidators reached last week with the Phase Two bidders for the IBRC mortgage book.
“In addition, the Minister for Finance has committed to bringing forward legislation to offer all mortgage holders in Ireland the full protection of the code of conduct on mortgage arrears (CCMA).”
A spokesman for the minister said he would work with Fianna Fail to find a solution to the problem, but nothing is expected to be in place before the IBRC mortgage book is sold.
Mr Noonan had originally expected to have legislation protecting those whose mortgages are sold to be in place by 2015. That timeline is not thought to have changed.
Half of the mortgages are in arrears.
So-called vulture funds, groups that buy distressed assets, are understood to have bid for the mortgage book.
The bank’s special liquidators said last week that an agreement reached with Phase Two bidders would see successful firms service the mortgages they acquire in accordance with the Central Bank’s code on mortgage arrears.
The liquidators, Kieran Wallace and Eamonn Richardson of KPMG, said they had been “aware of the anxieties of mortgage holders” and had noted concern expressed by politicians in recent weeks.
“We are pleased that the bidders have voluntarily indicated that if successful, they would direct that the mortgage loans were serviced in accordance with the terms of the CCMA,” they said in a statement.
But Denise McCormack of the IBRC Mortgage Holders Group said voluntary observance of the code was not good enough.
“This is just voluntary. It should be compulsory. It could be broken after a week,” she said.