Friday 22 June 2018

Thousands of homeowners 'paid nothing on loan for years'

Jeremy Masding Picture: Fennells
Jeremy Masding Picture: Fennells
Charlie Weston

Charlie Weston

Thousands of homeowners whose mortgages are being sold are refusing to engage with Permanent TSB, the bank has claimed.

Banking analysts say that PTSB has no choice but to sell its bad loans, which include 14,000 residential mortgages.

The bank, headed by Jeremy Masding, has insisted that thousands of the homeowners whose mortgages are being sold are refusing to engage with it, and had paid nothing on their home loan for years.

A spokesman for the bank, when asked how many were not engaging, said: "We are talking thousands, but we can't be any more specific than that."

Analysts said moves to put further protections in place for borrowers will make the sale of the €3.8bn portfolio less attractive to vulture funds.

Owen Callan, a banking analyst at specialist bank Investec, said PTSB had likely had little choice but to proceed with the sale as planned.

It comes amid increasing pressure coming from the European Central Bank to resolve its non-performing loan book.

But the rising risk of legislative action being proposed in the Dáil will likely diminish demand for residential mortgages from unregulated distressed debt buyers, or vulture funds.

"Some funds may even decide that the political risks involved in acquiring these NPLs [non-performing loans] is too uncertain to justify getting involved in the bidding process," Mr Callan said.

Meanwhile, Stephen Lyons of Davy Stockbrokers said PTSB had no alternative but to sell the loans.

He reiterated the bank's statement that €2bn of the home loans are typically owed by customers who have not engaged with the bank, whose mortgages are unsustainable, or who have been unable to meet the terms of various restructuring deals. On average, the loans are three-and-a-half years in arrears.

"We reiterate the comments we made earlier this week that the proposal by Opposition politicians to block non-regulated buyers from purchasing NPLs is unwelcome and unnecessary - credible alternative proposals are notably lacking.

"While such proposals may score cheap political points, it risks delaying the work-out of NPLs and weighing on sales pricing," said Mr Lyons.

PTSB said this week that around €2bn worth of the loans it planned to sell on were comprised of private dwelling home loans. It said the loans were "typically owned by customers who have not engaged with the bank, whose mortgages are unsustainable or who have been unable to meet the terms of various treatments put in place".

It said some mortgage holders have not engaged with the bank for over seven years and many have made no payments for years.

Irish Independent

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