Saturday 21 September 2019

Ulster Bank to sell 6,500 Irish mortgages in arrears

Photo: PA
Photo: PA
Donal O'Donovan

Donal O'Donovan

ULSTER Bank is putting 6,500 Irish mortgages, with combined debts of €1.6bn, on the market in the latest mass sale of home loans by an Irish bank.

The loans are split between 2,900 buy-to-let investor loans and 3,600 so called primary dwelling home (pdh) - standard owner occupier mortgages.

The 3,600 primary dwelling home (pdh) mortgages are deep arrears - of 44 months on average. Almost three quarters of the borrowers first entered arrears between seven and nine years ago. On average, the affected borrowers have been through three periods of forbearance with the bank.

The sale also includes 2900 buy to let mortgages, again in deep arrears. The loans are understood to be largely in negative equity.

The buyers are likely to be so called vulture funds.

The loans being marked for sale make up around a third of Ulster Bank’s stock of so called non-performing loans. Along with other Irish lenders, Ulster is under pressure to reduce its share of those bad loans from the current 17pc level to around 5pc. The sales now underway will take the bad loan ration down to around 10pc or 11pc.

That still leaves a significant stock of problem owner occupier and buy to let mortgages to work through, however it is understood the remaining debts are less stressed, and new lending by the bank will also shift the bad-loan ratios.

The bank originally flagged the sale in February, in the immediate wake of revelations that Permanent TSB was planning to sell 18,000 home loans this year.

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