Tag Archives: mortgages

Ulster Bank is to sell 5,200 non-performing mortgages to affiliates of so-called vulture fund Cerberus for €1.4 billion.

The portfolio of loans includes around 2,300 mortgages relating to private homes and around 2,900 mortgages covering buy-to-let properties.

Good times

Ulster Bank to sell non-performing loans worth €1.4bn to Cerberus (RTÉ)

Last week:  Pass The Parcel

Ronan Emmet writes:

Not only did the Irish citizen pay more per head then any other euro citizen or country to fix the European Banking Crisis, we also have the luxury of paying the highest mortgage interest rates of any EURO country.

Is there anything that the Irish Government and bankers touch that doesn’t have a whiff of a scam to it?

Irish people are being ripped off and it will continue until Irish people learn to stand up for themselves against those in power. Time to drain the swamp in Dail Eireann.

Source: Central Bank of Ireland

Via Gavan Reilly

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This afternoon.

During Leaders’ Questions, Social Democrats TD Stephen Donnelly raised the case of a family – Sarah, Dominic and their two children – who are being evicted from their home in Kilkenny.

The eviction comes after the Government sold the family’s mortgage to US investment firm, Mars Capital.

Stephen Donnelly: “Sarah and Dominic live in Kilkenny with their two kids and they bought their home in 2007. The shop in which Sarah worked in Kilkenny closed and the couple were unable to service their mortgage fully, although they are getting back on their feet. Two years ago, the Minister’s Government sold Sarah and Dominic’s mortgage to a US investment firm, which is now evicting Sarah, Dominic and their two children. Last week, the journalist Niall Brady reported that the Government sold Sarah’s mortgage and that of thousands of others to the US investment firm at a 58% discount. That would have brought Sarah’s €350,000 mortgage to approximately €140,000, which is approximately the value of the property and a mortgage that Sarah and Dominic can afford. The firm is Oaktree Capital and Sarah and Dominic know them as Mars Capital, which is the company that Oaktree set up to buy thousands of mortgages in Ireland.”

At the time of the sale, the Government refused to allow Sarah and Dominic, or any of the Irish mortgage holders, to bid on their own mortgages. Instead, it sold them to Mars Capital with a discount of 58%. Mars Capital structured the deal in such a way that the real discount it got was closer to 70%, which would have brought Sarah’s mortgage down from €350,000 to approximately €100,000. She cannot service the €350,000 so she is being evicted, which is bad news for her, Dominic and the kids but very good news for Oaktree Capital. Its accounts indicate that for its €80 million investment, it will get a return of €400 million.”

It gets worse. An examination of Mars Capital’s accounts is a masterclass in tax avoidance. The accounts indicate that the interest income minus the interest costs for the year come to €4,559,904. Astoundingly, the figure for administrative expenses against that is €4,558,904, leaving exactly €1,000 in taxable profit. The company has three shares issued to three different charitable trusts. The finances are also structured to ensure all interest payments and mortgage payments from Sarah and Dominic and everybody else, as well as all capital gains, can be offset against costs, ensuring there are no taxes owed.”

Why did the Government sell an asset that required just €80 million to buy and that one of the leading hedge funds in the world believes is worth approximately €400 million? What does the Minister and his Government say to Sarah, Dominic, their children and the many others being evicted by these foreign firms or struggling to pay their taxes? Does the Minister accept the State will receive almost no benefit in taxes, either on profits or capital gains from these companies? Will the Government launch an investigation into the tax affairs of all these funds that purchase these mortgages in Ireland to ensure not just tax compliance – as tax avoidance is legal – but that the real profits and capital gains that these funds make will be declared properly in Ireland and taxed accordingly?


Richard Bruton: “…The Government is acutely conscious of the needs of vulnerable people who are in this situation and we are seeking to develop more effective services, both legal and otherwise. As Deputies know, under the insolvency courts, financial institutions can no longer block an agreement that has been developed by a practitioner in this sphere. The courts can be used to overturn resistance by a lender to giving approval to a reasonable deal.”

Donnelly: “With respect, my question was not about the crash mats the Government is putting in place for people it has pushed off the wall. My question is about tax. Tax avoidance is not an issue for the Revenue Commissioners because it is legal.”

It would appear that this Government is guilty of facilitating wholesale tax avoidance by international investment firms making windfall profits in Ireland off the backs of ordinary, decent people trying to pay their mortgages, like Sarah and Dominic. We do not know where Mars Capital is sending this money. They are called “notes”. We do not know where they are going, but what we do know is that Oaktree Capital, if one looks at the SEC filings, holds multiple investment firms in the Cayman Islands.

An Ceann Comhairle Seán Ó Fearghaíl: “The Deputy is just out of time.”

Donnelly: “Ceann Comhairle. Let me ask the following questions. Was the Department of Finance, directly or indirectly, shown the tax avoidance structures that these firms, like Mars Capital, were going to use? Why was it not made part of any sale that all profits and capital gains accruing to these firms would be…”

Ó Fearghaíl: “The Deputy is now out of time. The clock applies to him…”

Donnelly: “…would be..”

Ó Fearghaíl: “…in the same way as it applies to everybody else.”

Donnelly: “Thank you.”

Ó Fearghaíl: “The time has elapsed, so will the Deputy resume his seat?”

Donnelly: “Thank you, Ceann Comhairle. Can I ask the Minister…”

Ó Fearghaíl: “No. I am not speaking for the sake of speaking. It is my job to enforce the Standing Orders. The time has elapsed. Will the Deputy resume his seat?”

Donnelly: “To reiterate the question, will the Minister consider an investigation and report back to the House on the extent of the tax avoidance we are seeing here?”

Bruton: The Finance Acts provide for anti-avoidance measures and the Revenue Commissioners execute those. They have the powers to deal with them effectively. Those powers have been enhanced every year, in every Finance Bill over the years. If additional reform to the Finance Acts is necessary, it is open to the Deputy to bring forward such amendments, but in respect of the existing Revenue arrangements, they will enforce those.”

“If the Deputy has details of some new avoidance mechanisms that ought to be scrutinised by the Revenue Commissioners they will more than pleased to consider them and bring forward to the House measures to protect against them in time for the next Finance Bill. I do not have access to the information the Deputy has about the specific avoidance structures he describes but the Revenue Commissioners are there to enforce the rules. There are general anti-avoidance provisions in the Finance Acts and they are overseen and executed by Revenue.”

Transcript via Oireachtas.ie

Related: IBRC sold mortgages to Mars at 58% off (Niall Brady, The Sunday Times)

There you go now.

PTSB mortgage holders set for refunds after investigation (Irish Times)

Serious failure by Permanent TSB a ‘key factor’ in loss of at least 22 properties (RTE)

A copy and paste ‘cease and desist’ mandate to TDs compiled by the Anti-Eviction Taskforce for homeowners facing repossession.

Dear Sir / Madam,
I am writing to you on behalf of the currently distressed mortgage holders in Ireland:

As of March 2012, 77,630, or 10.2 % of Mortgage holders, were in arrears of more than 90 days. This compares with 70,945 accounts (9.2 % of total) that were in arrears of more than 90 days at end-December 2011.

The number of accounts that were in arrears of more than 180 days was 59,437 at end-March 2012, equivalent to 7.8 per cent of the total. At end-December 2011, the number of accounts in arrears of more than 180 days was 53,120, or 6.9 per cent of the total.

Therefore, 116,288 accounts were either in arrears of over 90 days or had been restructured and were performing as at the end of March.

In arrears 90-180 day: 87,293, over 180 days 1,209,459. Total = 1,296,752

Residential properties in possession – at end of quarter.

As you can see from the above statistics, distressed mortgage holders make up a large proportion of the Irish Electorate and these numbers are growing monthly. The issue of distressed mortgages in Ireland has been allowed to fester and grow since the downturn with both the Financial Sector and the Government of the day determinedly avoiding to take responsibility for the situation or to focus on developing equitable resolution to the issue (as is their duty).

Article 45 IV: That in what pertains to the control of credit the constant and predominant aim shall be the welfare of the people as a whole.

We have seen household debt increase from 68.9% of personal disposable income in 2000 to over 150% in 2007, and this % continues to rise as debt remains stagnant while income reduces or in many cases disappears

The result of this negligence by the Government of the Day is:

Ever increasing numbers of distressed mortgage holders
Ever increasing debts / arrears per household
Serious damage to the domestic economy
Untenable stress levels within those family units
Dramatic increases in family break-ups
Dramatic increase in suicide figures

This negligence by the Government (and by default, the financial sector) must now stop. It is critical that the issue of distressed mortgages be given top priority by this Government:

It now must be the goal of this Government to devise and drive resolution, to save family units, to save family homes and to save the lives of family member.

Step one in this process has to be; A Complete Cessation of Eviction in Ireland.

The automatic benefits of this cessation will be:

To reduce stress levels within family homes struggling with distressed mortgages.
A change in the playing field to focus both the Government and Financial Institutions on devising equitable and workable resolution to this issue thus eventually eliminating the issue long term.
A return to the ethical basis on which the Irish Constitution is founded; for the good of Irish Citizens.

In this letter we, the distressed mortgage holders of Ireland, deliver to you a clear mandate to present the Government with a motion to introduce a complete ban on eviction from the family home in Ireland with immediate effect.

Please be advised that we do not wish to receive any automated replies, replies from your secretaries or any replies advising that you will look into this matter. This mandate requires your personal and IMMEDIATE ACTION.

There is no justification for any family to be put under severe duress or threat of eviction because of the economic downturn.

As our elected representative in this democratic country of Ireland, you are duty-bound to deliver on this mandate on behalf of the citizens of Ireland by immediately bringing forward a motion in the Dáil for a complete cessation of eviction in Ireland to protect the family home.

Yours Sincerely

………………………… (for and behalf of Distressed Mortgage Holders)

Via @antievictiontfo

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BANKS MAY be granted greater powers to contact customers who are in mortgage difficulty, under proposals being considered by the Central Bank.

Under the existing code of conduct set out by the Central Bank, lenders are forbidden from contacting customers who are in arrears more than three times in one calendar month.

It is understood the Central Bank is seeking to review this stipulation, amid concern that some customers are not addressing their arrears problem.

Banks may get greater powers to contact clients in arrears (Irish Times)