US buyers commits to honouring terms of mortgages
Published 02/04/2014 | 02:30
THE NEW owners of a huge batch of Irish mortgages, two US hedge funds, have promised to respect borrower protection guidelines.
After news of the sale of the mortgages emerged yesterday evening, US investment groups Lone Star and Oaktree Capital promised to follow the Central Bank's Code of Conduct on Mortgage Arrears.
The hedge funds have bought about two-thirds of a group of 13,000 mortgages from IBRC, the liquidated bank formed from the remains of now-defunct Anglo Irish Bank and Irish Nationwide Building Society. Most of the mortgages were originally issued by Irish Nationwide.
The mortgages bought by Texas-based Lone Star will be serviced by Pepper Asset Servicing. The firm, which entered the Irish market in 2012, said it will start contacting borrowers immediately following the handover, which should be concluded by August.
"We can assure each mortgage holder that we will adhere to the Code of Conduct on Mortgage Arrears in relation to the residential mortgages in this portfolio and are committed to working with them to find viable and sustainable solutions for both borrowers and the lender," said a spokesperson for Pepper.
The news that the new owners will implement the Code of Conduct will provide at least some relief to the 900 or so mortgage holders affected by the sale.
Lenders governed by the code may not seek repossession of a property until every reasonable effort has been made to agree an alternative repayment schedule with the borrower.
Its protections also include limits on the number of times borrowers can be contacted by phone over their debts.
The amount paid by the hedge funds for the loans is not yet clear.
The face value of the total batch was €1.8bn.
Finance Minister Michael Noonan called it "a hugely successful outcome".