Tuesday 27 September 2016

Fund tells court it will honour debt deals on mortgages

Published 10/11/2015 | 02:30

Mars Capital, which bought Irish Nationwide mortgages, has had a court injunction taken against it after it failed to adhere to two court-approved personal insolvency arrangements
Mars Capital, which bought Irish Nationwide mortgages, has had a court injunction taken against it after it failed to adhere to two court-approved personal insolvency arrangements

A vulture fund that bought mortgages here has promised to change how it deals with families in severe debt.

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Mars Capital, which bought Irish Nationwide mortgages, has had a court injunction taken against it after it failed to adhere to two court-approved personal insolvency arrangements, the Irish Independent has learned.

It is an offence under the Personal Insolvency Act to fail to abide by the provisions of an arrangement if it has been approved by the courts.

Personal insolvency practitioner Mitchell O'Brien last week sought two injunctions against Mars Capital, claiming in court the fund was refusing to adhere to two approved debt settlements.

It was also claimed during the High Court injunction proceedings that Mars Capital was continuing to contact two families, even though formal restructuring arrangements had been put in place.

Lawyers for Mr O'Brien, of Insolvency Resolution Services in Dublin and Co Waterford, claimed this was a breach of the Non-Fatal Offences Against the Person Act.

Mars Capital owns mortgages issued by the former Irish Nationwide. It also bought mortgages from the former subprime division of Permanent TSB.

One case involved a South Tipperary couple with a special needs child. Mr Mitchell had put a personal insolvency arrangement in place that restructured the debts owed on the family home. There is a write-down of €30,000 on the mortgage and their credit union is taking a €20,000 hit.

But Mars Capital, which owns the mortgage, did not engage in the arrangement, effectively leaving it with no say in it, according to solicitor Bill Holohan and barrister Keith Farry, who took the case on behalf of Mr O'Brien.

The other case involved a couple who had separated and were surrendering two buy-to-lets. Mars did not engage in the insolvency arrangement.

Both arrangements had been approved by the circuit courts.

Mars told an injunction hearing last week it had made a mistake by not recognising the personal insolvency arrangements, and was now seeking to rectify this.

In a statement, Mars said it is fully committed to conducting its business in Ireland in accordance with the law and is working with a number of personal insolvency practitioners to implement personal insolvency arrangements.

"We are investigating what happened with these two cases which regrettably appear to have been the subject of a misunderstanding between our local agent and ourselves. We are putting measures in place to ensure the same issues don't recur again in the future."

The fund apologised for not engaging with the insolvency processes.

Irish Independent

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