Wednesday 20 June 2018

Charlie Weston: Vultures have had their day - bankers must clean own mess

Personal Finance Editor Charlie Weston with his letter from Pepper on Sir John Rogerson’s Quay in Dublin. Photo: Mark Condren
Personal Finance Editor Charlie Weston with his letter from Pepper on Sir John Rogerson’s Quay in Dublin. Photo: Mark Condren
Charlie Weston

Charlie Weston

The Government has made a massive miscalculation if it thinks people in this country are prepared to cut the banks any more slack, especially if they sell home mortgages to vulture funds.

This is the clear conclusion from a blizzard of communications I have received in the last few days since penning a piece headlined: 'The day the vulture funds came for me'.

My phone has been hopping, the email address is pinging with new messages, and my Twitter account is working overtime with messages from people anxious to express outrage over the antics of vulture funds here, and the prospect of them getting their hands on more home loans. I have been repeatedly stopped on the street on the issue.

In the original article, I outlined how a vulture fund bought my mortgage, even though I have never missed a payment.

My wife Emer and I had originally taken out our tracker with Danske Bank, but it sold its loan book here. Needless to say, we did not give our consent to any change of the ownership of our mortgage.

The fund that now owns our mortgage has failed to tell us any more about itself than that its name is Proteus Funding DAC (designated activity company).

Its agent, Pepper, sent us an unsolicited and unsigned letter demanding we prove who we are, while telling us nothing about the fund that now owns our mortgage.

It turns out Proteus is an off-the-shelf company, or what is known as a special purpose vehicle.

It was set up with just €1 in issued share capital, by a firm that is an affiliate of Dublin commercial law firm Maples.

And Proteus is registered as a charity. The ultimate owner of Proteus appears to be none other than Wall Street investment giant Goldman Sachs, derided as the "vampire squid" of international finance.

But none of this was made clear to us.

We were just told in a letter before Christmas that Pepper Finance Corporation now holds the benefit of our mortgage "on trust for Proteus Funding DAC".

Yet Pepper sent us a letter on behalf of the shy, retiring Proteus, asking us to identify ourselves. Go to a Garda station with your passports, and a copy of same, and get a garda to stamp this to certify who you are, was the message.

The Irish Independent article outlining all of this tapped into something raw. It revealed an intense distaste for vulture funds and the way they operate.

The banks and the Government need to understand that we have reached a watershed here, similar to the water charges fiasco.

There is an intense loathing for the idea of faceless, foreign-owned funds coming in here and hoovering up home loans.

The plans by Permanent TSB and Ulster Bank to sell off 25,000 of what they call non-performing residential mortgages will not be tolerated.

What is being tapped into goes back to our bitter historical past. Many people are furious that a mortgage on a home can be traded and treated like a barrel of oil.

Our home is our sanctuary, where we raise our children, and entertain our friends.

The idea that a vulture could end up owning the mortgage, and fail to identify itself, has struck many as an example of rapacious capitalism, and a step too far.

This email is typical of the response to the piece: "I feel totally powerless in the whole process. I also feel exceptionally insecure that a vulture fund now has control of my mortgage. Would I be right in saying that if they wished, they could call in full payment of any mortgage and if one couldn't do that they could just sell under your nose?

"I feel aggrieved at the request for personal details."

People are worried at the prospect of unregulated funds having control of their mortgages.

For the record, a fund will not be able to remove your tracker rate. But if you are not so lucky, and have a variable, it is not clear who gets to decide what level of interest you pay.

Will it be the fund that now owns the mortgage, or the likes of Pepper, which is the credit service manager?

Another reader, who had a tracker mortgage with Bank of Scotland Ireland that is now managed by Pepper, wrote: "I read with interest your column on the vulture funds looking for your ID documents to confirm who you are. Amazing stuff."

He revealed that he made a Data Access Request to Pepper and paid a fee of €6.35.

"After about a month, we received a large box of documents from the bank with all our documents from the original mortgage from May 2008 to present in the box. Low and behold, our original ID documents were there, certified and copied from May 2008."

Many feel that, over the past decade, the banks have had enough time to deal with any non-performing loans.

Some of the banks planning to sell non-performing loan books claim some customers have not engaged with them for years. Yet they won't specify the numbers here.

The truth of the matter is that the banks too have refused to engage. Many banks are reluctant to write off debts for those in unsustainable mortgage situations, and the banks have mounted various legal challenges to the personal insolvency regime.

The message is clear: the vultures have had their day in this country and no more of their antics will be tolerated.

The banks will have to do their own dirty work to clean up their messy mortgage books.

Irish Independent

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