To what extent are vulture funds restructuring mortgages?

[Brendan Burgess]

It appears that Tanager are simply refusing to restructure mortgages. They tell people to either clear the arrears or sell the property.

But, in total, 26% of non-bank mortgages on family homes have been restructured. Of course, they may have bought loans which had already been restructured.

Brendan


Michael McGrath asked the Minister the following question.


QUESTION

To ask the Minister for Finance the number of mortgage restructures by restructure type for both PDH and BTL mortgages, in tabular form; the number under each restructure type restructured by regulated financial institutions, retail credit firms and unregulated loan owners; and if he will make a statement on the matter.
REPLY



I am informed by the Central Bank that their Residential Mortgage Arrears and Repossessions Statistics show that at end-June 2017, 120,398 PDH mortgage accounts were restructured.

The breakdown by entity type is as follows: Banks 111,156 accounts, Retail Credit Firms 6,695 accounts and unregulated loan owners 2,547 accounts. Similarly, 23,623 BTL accounts were restructured at end-June. The breakdown by entity type is as follows: Banks 22,833 accounts, Retail Credit Firms 318 accounts and unregulated loan owners 472 accounts.

In addition to the above published statistics, please see below a further unpublished breakdown of restructures for PDH and BTL accounts. Given the small number of observations in some categories, it is not possible to provide the level of detail requested. However, the Statistics Division within the Central Bank is currently reviewing the breakdowns published, with a view to expanding coverage in the New Year, subject to confidentiality measures.

 

[Brendan Burgess]

From the Central Bank Quarterly Arrears Report June 2017

Residential Mortgages held by Non-Bank Entities

Arrears

At end-June 2017, non-bank entities accounted for 5 per cent of the total stock of PDH mortgage accounts
outstanding. For BTLs the proportion was higher at just under 8 per cent. Overall, non-bank entities
accounted for just under 6 per cent of the total stock of residential mortgage accounts outstanding (PDH and
BTL) at end-June 2017 (7 per cent in value terms).

In terms of PDH mortgages held by non-bank entities, 69 per cent were held by regulated retail credit firms
at end-June 2017.

For retail credit firms, 25 per cent of accounts were in arrears over 90 days, with 17 per
cent in arrears of 720 days (Table 4).

The equivalent figures for unregulated loan owners was 51 per cent and
41 per cent, respectively. Restructuring activity was higher among retail credit firms, with 25 per cent of loans
restructured at end-June, compared to 21 per cent for unregulated loan owners.

My analysis suggests that vulture funds are restructuring loans:

26% of them have been restructured.

Workings: