Legal basis for sale of mortgage

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Purple

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Can anyone tell me under what specific Irish or EU law lenders are allowed to sell existing mortgages to other companies, be they banks or so-called vulture funds?
 
Why do you need a law to sell something?

If you owe me €100 I can sell the right to collect that to anyone I like.

There is a clause in mortgages which allows them to be sold.

Brendan
 
Brendan Burgess said:
Why do you need a law to sell something?

If you owe me €100 I can sell the right to collect that to anyone I like.

There is a clause in mortgages which allows them to be sold.

Brendan
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It's the sale of the contract that I'm querying.
Is it just the right to collect the loan that is sold or the loan itself?

I'm wondering if there will be some whackjob who will take some case against the sale of mortgages to other financial institutions.
 
Purple said:
It's the sale of the contract that I'm querying. Is it just the right to collect the loan that is sold or the loan itself?
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Strictly speaking, the contract isn't "sold": one of the parties assigns it to another (new) party. In a mortgage contract, there are clauses relating to the right of one party to assign it to another party. That is, ABC bank can assign their part of the contract to XYZ bank (or indeed XYZ vulture fund). XYZ then has all the rights and obligations of ABC: the contract itself remains unchanged, other than the idententity of one of the parties to the contract. There will be a seprate contract between ABC and XYZ that says "ABC agrees to assign this set of mortgages to XYZ if ABC pays XYZ a certain sum". There's no change needed to any of the original contracts. Assignment of contracts is very common.
 
newtothis said:
Strictly speaking, the contract isn't "sold": one of the parties assigns it to another (new) party. In a mortgage contract, there are clauses relating to the right of one party to assign it to another party. That is, ABC bank can assign their part of the contract to XYZ bank (or indeed XYZ vulture fund). XYZ then has all the rights and obligations of ABC: the contract itself remains unchanged, other than the idententity of one of the parties to the contract. There will be a seprate contract between ABC and XYZ that says "ABC agrees to assign this set of mortgages to XYZ if ABC pays XYZ a certain sum". There's no change needed to any of the original contracts. Assignment of contracts is very common.
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Thanks, I thought it was something like that.
 
newtothis said:
There will be a seprate contract between ABC and XYZ that says "ABC agrees to assign this set of mortgages to XYZ if ABC pays XYZ a certain sum".
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I've just realised this was mis-stated. Things would have to be very bad if ABC had to pay XYZ to take the mortgages off their hands! It should of course be the other way round: XYZ pays ABC if ABC agrees to assign XYZ the mortgage contracts.
 
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