Ask Ulster Bank for a discount to redeem mortgage

Leper said:
Am I right?
A mortgage is up to date with repayments coming in every month. The good mortgagee wants a deal in which to pay off all he owes early to a bank that's going out of business. And he is not going to get a deal because he has made all his repayments todate.

But, a mortgagee defaults on repayments and the bank will make a deal.

The overriding message I'm getting is (a) The mortgagee is honest and smart - too bad!
(b) The mortgagee defaults and perhaps through dishonesty - he gets rewarded by the bank.
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It does seem that way but... its all about repayment capacity. The good mortgagee has not given the bank any reason to doubt their ability to repay the loan in full.

The bad mortgagee, in not paying the mortgage and showing that they have no capacity to repay over the life of the loan could get a deal. They will claim family members have given them a lump sum to do a deal. I would be sceptical of such a story but im suspicious by nature
 
NoRegretsCoyote said:
That's an average for the whole portfolio, not your mortgage.
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I assumed they negotiated the entire portfolio in one go in which case the average would apply. I'm sure they don't buy mortgages on an individual basis. Are you saying they (vulture funds) bought the mortgages in tranches of different risk/price? I've never seen that mentioned anywhere
 
@argolis

Buying a mortgage portfolio is a bit like buying a sack of spuds.

You know what it weighs, you know how many there are, and that each potato is different.

You can't then take the biggest potato out of the bag and then claim it is representative of the rest.
 
I have a btl with Ulster. It's on tracker. Ulster do not have a copy of the sanction letter as I believe they lost it. I don't have a copy either. Where would this leave me in the event of a loan sale? Thanks
 
imalwayshappy said:
I have a btl with Ulster. It's on tracker. Ulster do not have a copy of the sanction letter as I believe they lost it. I don't have a copy either. Where would this leave me in the event of a loan sale? Thanks
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Have you tried the solictor that dealt with it, they get a copy of the loan offer letter too in their legal pack.
 
NoRegretsCoyote said:
@argolis

Buying a mortgage portfolio is a bit like buying a sack of spuds.

You know what it weighs, you know how many there are, and that each potato is different.

You can't then take the biggest potato out of the bag and then claim it is representative of the rest.
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Fair enough, I was just wondering were they purchased in tranches, or some other method, contrary to my understanding.

I get that some are more valuable than others in this sack of spuds but haven't they paid the same rate for each i.e. the average? I'm not trying to claim my mortgage is representative of anything, just that they paid the average value for it. Maybe I'm misunderstanding this or we just have different opinions, I don't know.

In my mind, even if they were to assess and value my mortgage more highly because there hadn't ever been a missed payment on it vs a delinquent one, they might still accept some discounted value to clear it immediately. So, for example, they might accept 85% for a performing loan but 55% for a badly non-performing loan. Having read about how they operate, I thought vulture funds would be interested in a fast turnaround of their investment because they recycle the money into the next "project". Having paid 42 cent on the euro, a year later they'd be getting 85 cent back, thus doubling their investment for a ~ 100% gain. But the rep said they were happy to keep a performing loan on their books.

By the by, I just googled it and it seems they bought the mortgage book for 42 cents on the euro, even more than I remembered! :oops:

www.thetimes.co.uk

IBRC sold mortgages to Mars at 58% off

Mars capital, an unregulated mortgage company, was able to buy almost 1,500 home loans from IBRC for just 42% of the amount owed, even though the homeowners involved remain liable for the full amount
www.thetimes.co.uk www.thetimes.co.uk
 
argolis said:
Having paid 42 cent on the euro, a year later they'd be getting 85 cent back, thus doubling their investment for a ~ 100% gain.
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But if they hold you to contractual terms (and you are able to pay) then they will make even more over the lifetime of the mortgage.
 
NoRegretsCoyote said:
But if they hold you to contractual terms (and you are able to pay) then they will make even more over the lifetime of the mortgage.
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If it was viewed as an individual investment, sure, but I don't think that's equating the investment terms. They could either make 100% after one year or, say, 260% over the course of the remaining 15 year term holding my mortgage (I just did some back of the envelope calculations).

If they took a 100% gain after one year and kept recycling it, then they could buy two mortgages, then four, etc. if each mortgage holder agreed to clear their mortgage at a discounted rate. Presuming there continues to be other distressed purchase opportunities available. By recycling the gains over the course of 15 years they'd be looking at 1,000% or more return, compared to 260% from just buying and holding the first mortgage.

That's not how they operate though, they obviously prefer to hang onto the performing loans. Reasons may be 1) cashflow paying a good interest rate 2) there aren't any other distressed markets to buy into right now 3) selling the performing mortgages as part of a portfolio is just easier 4) giving a performing loan a discount incentivises other performers into negotiations or, worst case, becoming non-performing in order to negotiate a discount.

If they could sell some or all of their Irish mortgages and double their money tomorrow and invest the doubled funds into another distressed purchase, I don't know why they wouldn't. I have a layman's understanding, hence I am liable to be wildly wrong.
 
We have a mortgage of €110K with Ulsterbank on a tracker of 0.75% with about 10 years remaining.
We have €100K in cash. I would gladly pay them all the cash for no mortgage if I could.
Surely they are losing on our tracker.

I think there are a lot of people like me, with trackers who might trade up, but have decided just to let the tracker play out before trading up.
I know you can keep your tracker as part of the mortgage, but i think it feels cleaner to just play out the tracker before thinking about trading up.
 
Shazzaqwe said:
We have a mortgage of €110K with Ulsterbank on a tracker of 0.75% with about 10 years remaining.
We have €100K in cash. I would gladly pay them all the cash for no mortgage if I could.
Surely they are losing on our tracker.
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Irish banks have more deposits than loans. This means they've money they can't lend. Those deposits are attracting a rate of interest far less than 0.75%. what can they do with this surplus of money? They've a few options:

buy 10 year government bonds - it's bouncing around somewhere between zero or negative rates.

Put this money on deposit with the ECB at -0.5%

Now imagine you pay them back. They've gone from having an mortgage asset earning a positive rate of return -albeit a low one - to having cash, on top of the rather large pile they already have, that whatever they put it in will end up costing them money.

So the question is why would they offer a discount that is only going to end up costing them further?
 
Shazzaqwe said:
We have a mortgage of €110K with Ulsterbank on a tracker of 0.75% with about 10 years remaining.
We have €100K in cash. I would gladly pay them all the cash for no mortgage if I could.
Surely they are losing on our tracker.
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How are they losing? You are paying them about €70 interest a month by DD and they are doing nothing more than sending you a piece of paper once a year. They are raising deposits at less than what you pay them now. Sure, they have fixed costs at portfolio level. But at loan level their decisions are at the margin, and at the margin your loan is profitable.

And by telling them you can repay early you are also telling them you can afford to pay them on contractual terms.
 
Good point.
I wonder will it always be that way.
It certainly hasnt been for the life of the mortgage.
 
I have a tracker mortgage with UlsterBank. What is happening to the tracker mortgages ? When is Ulster Bank closing there banks in Ireland?
 
Donaoib said:
I have a tracker mortgage with UlsterBank. What is happening to the tracker mortgages ? When is Ulster Bank closing there banks in Ireland?
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AIB are allegedly going to buy your mortgage.

Ulster won't be accepting any new business after end of October. As to when existing customers will be effected there were no firm dates.
 
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