Flaws In Regulations Leaving Mortgage Holders In Precarious Position - FF

Fianna Fáil has raised concerns over a "serious flaw in the regulations surrounding unregulated loan owners".

The party's Spokesperson on Finance, Michael McGrath, claimed the situation is leaving certain mortgage holders in arrears in a very precarious position.

He said: "These funds have purchased home loans – some of which are distressed – from the banks and are unregulated by the Central Bank. Before the sale of these loan books to vulture funds, Fianna Fáil continually highlighted the fact that if the fund was unregulated they would be free to do what they wanted with the loan.

"We know that many of these funds are here for a quick profit and have no long term objectives in Ireland. Sadly, in many cases, this profit comes at the expense of families and individuals who are in arrears.

"In 2015 the Government enacted legislation that would only regulate an intermediary leaving the loan owner completely free to make the major decisions that affect people's lives. Once again, Fianna Fáil was clear that this law was inadequate and was only a half-baked solution.

"In recent weeks, it has emerged that certain Retail Credit Firms, who are regulated by the Central Bank, miscalculated the amount people were in arrears by. In some cases the figure was out by as much as 500 per cent."

Deputy McGrath said that based on Dáil responses he has received, it appears that if an unregulated loan owner miscalculates the arrears the Central Bank is powerless to do anything about it.

He concluded: "This revelation calls into question the entire regulatory system surrounding Vulture Funds. You would have to ask what other key decisions are beyond the Central Bank's powers.

"It is clear to me that these funds must be regulated like any other bank or non-bank lender operating in Ireland. There are currently nearly 12,000 family home mortgages owned by unregulated loan owners and it is simply unacceptable they should be beyond the reach of Central Bank's regulatory powers."


Related Irish News Stories
Click here for the latest headlines.

05 October 2017
Customers Affected By Tracker Mortgage Scandal Rises To 3,500
The number of Ulster Bank customers affected by the tracker mortgage scandal has risen from 2,000 to 3,500. At a meeting of the Oireachtas Finance Committee this morning, 05 October, Ulster Bank executives confirmed that the number of people affected by the scandal had risen.
17 November 2017
Council Secures €85m European Investment Bank Loan
Limerick City and County Council has borrowed €85 million from the European Investment Bank (EIB) to transform a site in the city centre. The 1.62-hectare Opera Site will be transformed into one of the country's top urban commercial/office developments, with the capacity for 3,000 jobs.
23 February 2018
Oireachtas Must Urgently Regulate 'Vulture Funds' - FF
The Oireachtas has been called to urgently regulate 'vulture funds'. Fianna Fáil Spokesperson on Finance Michael McGrath, made the call following a statement from Ulster Bank CEO Gerry Mallon that the bank may sell off up to 7,000 mortgages. Deputy McGrath said: "The case for full regulation of these vulture funds is compelling.
30 August 2011
Banks Have Funds For 'Debt Forgiveness'
Irish banks have enough money for so-called debt forgiveness. The Finance Minister, Michael Noonan, has insisted that the capital is in the banks to allow the write off of some residential mortgage loans, following the recapitalisation of the nationalised banks in July of this year.
09 September 2011
€7.5bn Available To Exchequer
Imposing losses on junior bondholders in Irish banks has saved €7.5bn, it has been revealed. Speaking before the Joint Oireachtas Committee,John Corrigan, the head of the Nation Treasury Management Agency (NTMA), said the funds can now be re-diverted towards helping to run the country until 2013.
30 September 2008
Irish Banks Get Government Lifeline
Customers of Irish banks are now having their cash 'covered' after a surprise move from the Irish government late yesterday that it will "guarantee all deposits". The high-risk move had an almost immediate positive impact on early trading today, with the ISEQ index of Irish shares opening 3.4% higher, at 3,412 points.
05 November 2015
Call For Govt To Develop Alternative Housing System
Sinn Fein Senator Kathryn Reilly is supporting a call for the Irish Government to develop a housing system which is not reliant on the private for profit sector. Senator Reilly said policy on housing has resulted in a "deepening and worsening" crisis over the last four years, with a "chronic lack" of social and 'affordable' homes.
04 September 2008
Consultants Demand 9% Rise In Spending
Senior hospital staff have called for the appointment of more consultants and an increase in spending amidst the Government's present economic concerns.
12 March 2014
Irish Banks To Undergo 'Rigorous' Stress Test
The ability of banks in Ireland to " adequately provide for the losses they are carrying" will be rigorously tested by the forthcoming ECB stress tests, Fianna Fáil Finance Spokesperson Michael McGrath has said.
13 August 2009
Labour 'Shocked' At Continuing 100% Mortgages
The Labour Party has called for an outright ban on 100% mortgages after it was revealed the practice was continuing in a Government publication. Banks providing 100% were believed to have been a huge contributory factor in the world financial crisis, as loans were given to people who couldn't pay them back.
21 June 2016
Sale Of Commercial Loans To Unregulated Investors 'Alarming' - FF
The sale of commercial loans on behalf of vulture funds to individual investors has been described as "alarming" by Fianna Fáil finance spokesperson, Michael McGrath. Deputy McGrath said that these investors are not regulated entities and have "no understanding of the underlying business the loan relates to".
01 July 2010
Government Successful In Bank Reform Vote
The Government has won the Dáil vote on Central Bank Reform Bill, which will see a range of reforms imposed at the bank. The bill was passed by 69 votes to 65, and will see legislation reforms to the financial regulatory system and extra regulatory powers at the Central Bank.
07 July 2015
New Legislation To 'Comprehensively' Deal With VMR's - FF
Fianna Fáil have introduced new legislation it claims will "comprehensively deal with the scandal of banks massively overcharging customers on standard variable mortgage rates". The party's spokesperson on finance, Michael McGrath, will introduce the Bill during a Private Members debate today (Tuesday).
26 November 2015
Mortgage Loan Scheme Needs To Be 'Revamped' - FF
A loan scheme designed for first time buyers needs to be "revamped", Fianna Fáil spokesperson on finance Michael McGrath has said. Deputy McGrath made the call after figures revealed that not a single loan has been issued under the scheme so far in 2015.
06 August 2015
Finance Minister Accused Of Failing To Assist NAMA Inquiry
Sinn Féin leader, Gerry Adams TD, has hit out at Minister for Finance Michael Noonan, over his failure to NAMA cooperates with an inquiry into the sale of its northern loan portfolio. On Wednesday, the Stormont Finance Committee agreed in principle to use its powers of compellability to get officials at NAMA to attend the inquiry.