Lessons for the customers of other banks from the ptsb sale of mortgages to Start

[Brendan Burgess]

Bank of Ireland has raised the possibility of selling some of its non-performing home loans. Other banks may follow suit due to ever harsher Central Bank regulation.

If you are currently in arrears with Bank of Ireland or some other lender and don't want your mortgage sold to a vulture fund, you should address the issue now.

These are some of the lessons learnt from the ptsb customers who were shocked that their mortgages were sold to Start Mortgages. Some of them could have easily prevented it.

• Engage with Bank of Ireland. BoI can restructure around 90% of the mortgages of people who engage with them. They can't restructure a mortgage where someone does not engage.
  
• Prioritise payments of your mortgage over unsecured loans and other debt
  
• If you have a restructured BTL mortgage and a PDH mortgage which is performing, consider selling the restructured BTL. Even if your family home loan is performing, it will be sold if your BTL has been restructured.

If you no longer need your split mortgage, consider getting rid of it
Some people got split mortgages a few years ago when they badly needed them. But now their financial circumstances have improved and they could make the full repayments.

While a split mortgage is very valuable, your ICB record will remain impaired for 5 years after the split stops. This will probably stop you from trading up.

If your circumstances have improved and you can pay more, you should probably do so
If you have a temporary arrangement and can pay more, you should do so. You may get a permanent restructure. A permanent restructure from BoI will return your mortgage to performing status. Your ICB record will begin to clean up and it's less likely that your mortgage will be sold.

It's not the end of the World if your mortgage is sold to a vulture fund.
There have been many scare stories in the press about the vulture funds will try to repossess all the houses relating to the mortgages they have bought. If you have a tracker mortgage, you will continue to keep it if it's on your family home. If your loan can be restructured, the vulture fund will probably restructure it. And if they do try to get an order for possession, they will find it very difficult especially if you are engaging and paying what you can.

So while you should take reasonable steps to reduce the chances of having your mortgage sold to a vulture fund, you don't need to live on bread and water.

 

[Brendan Burgess]

From the Irish Times

Bank of Ireland considers selling on some of its €2.5bn of Irish home loans in arrears

Tougher regulations could prompt [broken link removed] to sell mortgages and business loans that have fallen into arrears, changing its strategy for dealing with the legacy of the Republic’s financial collapse.
...

Speaking after it published its results, chief executive Francesca McDonagh confirmed that Bank of Ireland was considering selling some of the €5.9 billion of home and business loans on its books that have fallen in arrears.

Ms McDonagh specifically ruled out selling so-called “non-performing loans” six months ago, but said on Monday that this option was now on the table. “Our position has changed because the regulatory environment has changed,” she stressed.

 

[Bronte]

Bet anything we will have a similar thread to the PTSB one with more people shocked their loans are sold on. They will read the newspaper articles and websites like this yet they will not set about ensuring their loans does not get sold even when they could do something about it.

A positive is the banks getting rid of non performing loans cleans up their balance sheets and reduces their costs. Handling these messy cases costs a lot of money. Once this is done they might reduce interest rates. Which is good for those paying high rates to subsidies non performing mortgages.