Fianna Fáil to push for vulture fund laws
Published 28/03/2016 | 02:30
Fianna Fáil is to push for amendments to the legislation governing residential mortgages when the Dáil resumes next month.
The party's finance spokesman said they will put three key topics relating to housing at the top of their agenda in the coming weeks.
They want a comprehensive framework of protection for mortgage holders, tenants and small and medium enterprises who are at risk from the actions of vulture funds.
"While there is no doubt that there is an ongoing recovery in the Irish economy, there is a real risk that the main beneficiaries of this will be 'quick buck' merchants by virtue of the manner in which they are being allowed ride roughshod over Irish people," Michael McGrath said.
He said the Dáil must be in a position to amend the legislation to ensure that any borrower who has entered in to a restructuring arrangement, and who is sticking to it, cannot have that payment structure arbitrarily cancelled by the acquirer of a loan or an agent operating on their behalf.
In total 47,000 mortgages are in the hands of non-bank lenders. Many of these are home owners whose loans have been sold to vulture funds.
Mr McGrath claimed the Consumer Protection (Regulation of Credit Servicing Firms) Act 2015, which the last government brought in to protect homeowners, was a "cop out".
"We were left with a half-baked system whereby the servicing agent for the mortgage is regulated but the same requirement will not be placed on the actual owner of the mortgage," he said.
Mr McGrath said they will also bring forward proposals to help protect tenants, including laws which would require landlords to give longer notice periods in the case of multiple properties, to prevent a situation where a market is inundated with tenants looking to rent.
"Where a vulture fund appoints a receiver over a rented property, they should be required to take on all of the responsibilities of a landlord, including the obligation to return a tenant's deposit in full," he said.
On SME loans being sold to investors, Mr McGrath said there is a familiar pattern where investors buy loans at a substantial discount and use various strategies to trigger a default in the borrower's loan, essentially a "loan to own" strategy.
"Vulture funds should not be able to appoint a receiver with almost no notice to the borrower," he said.