PTSB selling performing loans?

Discussion in 'Mortgages and buying and selling homes' started by Deisedoll, Oct 12, 2017.

  1. Deisedoll

    Deisedoll New Member

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    2
    Article on todays independent re the above. In the article it states :-

    PTSB will randomly select from a pool of 6,098 home loans issued to owner-occupiers at an average interest rate of 3.28pc.

    As the mortgages are performing - the pool has an arrears rate of less than 2pc - with the portfolio composed primarily of loans carrying a top-notch credit rating, sources predict the yield may be lower on this RMBS deal than last year's offer.

    Can anyones loan be selected, and if it can surely this would prevent the borrower from being able to switch in the future?

    Can someone throw some light on this please
     
  2. RedOnion

    RedOnion Frequent Poster

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    No, they're not selling loans. They're issuing a bond to raise funding, and using the mortgages as security.
    In simple terms if PTSB collapsed, the mortgages are legally separate, so the holders of the bonds would have the Mortgages to recover their money from.
    There won't be any impact on customers either in their day to day interaction, or ability to switch.
     
  3. Brendan Burgess

    Brendan Burgess Founder

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    32,821
    Here is the article

    Investors set to pile into PTSB auction

    Separately from this bond issue, they are planning on selling €1.25 billion of non-performing loans:

    "This latest deal comes as the bank faces acute pressure to reduce its relatively high stock of non-performing loans, which sit at 28pc of the total loan book.

    The bank is expected to pull the trigger on the sale of some €1.25bn soured loans within the next few months and has hired accountancy firm Ernst & Young, to help plot a disposal strategy."

    The contractual rights of the loan which will be sold will not be affected. However as they will all be deeply in arrears, they have broken their contracts anyway. It is likely that the loans to be sold will all be stuck in the courts process.

    The buyer will probably offer deals to the mortgage holders to sell their homes and write off any shortfall. They will probably be more efficient with those who are paying nothing, however, it's very difficult for any lender to repossess homes.

    Brendan
     
    Pat Sorrn and RedOnion like this.
  4. Deisedoll

    Deisedoll New Member

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    2
    Thanks for clarifying that Red Onion, I remember seeing people on Primetime a few years ago and they had been bundled into some sort of sell off of loans, even though they were
    not in arrears. Daughter just took out her first mortgage a year ago and was worried about this.
     
  5. Brendan Burgess

    Brendan Burgess Founder

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    32,821
    If she has a performing loan, she has nothing to worry about. Her loan won't be sold. Even if it is sold, the contract remains the same.

    If she is in deep arrears, which is unlikely as it's a new mortgage, she might be actually better off as a vulture fund is more likely to do a deal than ptsb.

    If she is in moderate arrears, the vulture fund might be better organised and tougher than ptsb.

    Brendan