I will be presenting to the Oireachtas Finance Committee on Wed about Vulture Funds

Hi,
I'm stuck with Start and my interest-only mortgage has increased by more than 60% due to the increase in ECB rates.
My point relates to the Vulture Funds increasing rates by the same amount as the ECB increases.
Is it not fair to say that they are gouging in this case. What they have conveniently not taken into the equation is the fact that they bought these loans for less than face value.
So if, for example, they only paid 50% of face value then a 1% increase in ECB rate effectively only costs them .5%.
I haven't seen this being highlighted in the press, is it something that you could mention to the Oireachtas Finance Committee.
 
Good luck Brendan!

I hope you can make the case for sensible consumer protection measures for "trapped" borrowers. In my view there should be a legal guarantee where they cannot be charged more than a certain spread over a certain benchmark. This would put an end to misery for borrowers while at the same time ensuring that funds can make a profit commensurate with the risk involved.
 
In the past lenders were held back from over charging existing customers by the reputational damage it would do them in the new business market.

So called Vulture Funds are not involved in new lending and so are under no such constraint. I would rather see this addressed in the courts than the Oireachtas, or at least in the courts first, and if that fails then through legislation.

What the Vulture Funds are doing to trapped borrowers is far worse than the tracker 'scandal'.
 
cremeegg said:
What the Vulture Funds are doing to trapped borrowers is far worse than the tracker 'scandal'.
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It would be interesting to estimate the monetary cost of both to compare them in order to fact check such statements.
 
ClubMan said:
It would be interesting to estimate the monetary cost of both to compare them in order to fact check such statements.
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When I said far worse, I was not thinking about cost.

The tracker scandal consisted of borrowers who opted out of trackers not being offered those trackers back. The customers chose to leave the trackers, they did not confirm what would happen when their fixed rates expired. In most cases the banks simply interpreted contracts to their own advantage, something every business entity tries to do.

The 'trapped' customers of 'Vulture Finds' made no choice to have their mortgages transferred away from high street lenders with good reputations.
 
cremeegg said:
The 'trapped' customers of 'Vulture Finds' made no choice to have their mortgages transferred away from high street lenders with good reputations.
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That is the insane part of all of this, especially that lots of the transferred "customers" can't go to another bank for many reasons. There would be nothing to stop a bank from selling say FTBs at their 90% LTV either.
 
cremeegg said:
The customers chose to leave the trackers, they did not confirm what would happen when their fixed rates expired.
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Exactly. In only a slightly different parallel universe tracker rates would have stayed above fixed rates for a decade and there would have been no "scandal" as no customer would have looked for their tracker back.
 
Having watched todays meeting I can say I am more convinced that the case we are taking to FSPO will succeed , we switched to a LTV rate with PTSB and the terms were very specific about the Band we would be in and the interest rate applicable to that . Its not going to be sorted in the near term but fortunate for us we only have 6 years left on our mortgage but with a bit of luck can win set a precedent for others.
 
It's incredible (but maybe not surprising) how much more coverage today's appearance of AIB at the Oireachtas Committee is getting compared to this issue. AIB were always going to be able to explain themselves (up to a point) and the Oireachtas members that bravely put themselves forward for interview were going to say it was not enough (and if you were not aligned with the Government, there was the obligatory claim that all this happened under their watch).
The people involved in these cases however are much more in need of media coverage I think Newstalk had Padraic Kissane on after the joint appearance on Wednesday but that's all I heard of...
 
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Hi Brendan
I've listen to your presentation to the Oirecthas committee last Wednesday .
As a former Irish Nationwide mortgage holder who passed through Ibrc and on to Pepper I was wondering which category I would fall into unlike Ptsb the originating lender is now defunct.
I agreed a term extension and reduced payment for a number of years with IBRC and reverted to full payments 1.5yrs ago. Currently paying 6.65%
Refused a switch last year because of this as showing up on credit report.

Feel free to move if in wrong forum.
 
Brendan Burgess said:
You are welcome.

Economists and journalists are very poor at forecasting interest rate movements.

If you read somewhere about "multiple rate rises" to come, ignore it.

It may happen but it may not.

Brendan
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Economists are generally awful at predicting anything. They excel at building models to explain historical events that we already understand perfectly well.
 
anderson07 said:
unlike Ptsb the originating lender is now defunct.
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Hi anderson

I had a section in my draft opening statement on this cohort, but deleted it to focus on the much larger cohort.

The solution for people where the lender is gone - Irish Nationwide, Danske and Bank of Scotland Ireland, is to have a ceiling of 2% above the ECB rate or the euribor rate. The lender could apply to the Central Bank for an exception if they could justify it e.g. some of the loans were originated as sub-prime loans and should still be more expensive.

Brendan
 
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