Frankfurt focusing on the optics of banks' dud loans
Irish banks and American 'vultures' are the wrong targets for public anger if mortgage books need to be sold off, writes Colm McCarthy
There were reports yesterday of objections from the Department of Finance to the European bank regulator's enthusiasm for selling on dud mortgages held by the Irish banks. The previous week had seen a virulent outbreak of banker-bashing directed mainly at Permanent TSB, which has announced plans to sell 18,000 non-performing mortgage loans to new owners. About 4,000 of these are landlord loans but 14,000 relate to individual private borrowers.
The outrage is driven by concerns that borrowers making an effort to deal with arrears, or genuinely unable to do so, will pointlessly be evicted from their homes and many of the 14,000 belong to this category. Alternatively the villains are not the banks selling on the dud loans but the purchasers, confidently presumed to be 'vultures' (and American) in advance of their selection.
Assurances that the legal rights of the non-performing borrowers will be unaffected are not enough to counter the universal willingness to believe the worst. As with any witch-hunt, the accurate identification of witches is the difficult part.