Ulster Bank sells 5,200 mortgages to Cerberus

An Ulster Bank spokesperson said:

“Ulster Bank can now confirm that it has agreed terms for the sale of a portfolio of non-performing mortgages of c€1.4bn, as announced for sale in May to a purchaser managed by affiliates of Cerberus Capital Management L.P. This portfolio does not contain any performing home loans or any home loans in an arrangement.

“This difficult decision comes a decade after the financial crisis began and the continued extension of forbearance cannot be maintained. Not all mortgages are sustainable and we are obliged to reduce the level of non-performing loans on our balance sheet. For mortgages that are not sustainable, additional forbearance will not bring them back to a performing position.

“We will be in contact with all affected customers to help them as their loans transition to the new owner.”

In this case Ulster Bank is giving customers 90 days notice of sale (obliged to give 60 days notice).


Customer Helpline: 1800 435 763


Data points:

§ The portfolio consists of RoI mortgages split approx. 55% BTL and 45% PDH (by value)

§ The face value of the loans that are being included is currently c €1.4bn.

upload_2018-8-13_16-12-22.png


PDH: 71% first entered arrears a minimum of 7 years ago.


BTL: 77% have been in arrears for more than 12 months during their lifetime.
 
I issued a briefing note to the media

Briefing note by Brendan Burgess on Ulster Bank sale to Cerberus

13th August 2018

If the legal system does not allow Ulster Bank to repossess properties, politicians should not complain if the banks sells on the mortgages

· Average arrears over 4 years!

· Ulster Bank has been very flexible in dealing with borrowers in arrears – but some borrowers just don’t engage or are just unsustainable.

Some of these borrowers do need state help with their mortgage payments

· Some borrowers are in genuine financial difficulty and would get the Housing Assistance Payment if they were renting. The HAP should be adapted to help borrowers who can’t pay their full mortgage.

· In the UK, borrowers get Support for Mortgage Interest. Since April, this has been provided as a loan instead of a benefit

Mortgage rates in Ireland are 1.5% higher than the average eurozone rate because we don’t allow repossessions

· Responsible borrowers are paying the price for irresponsible borrowers.

· This costs a borrower with a mortgage of €200,000 around €250 a month more than they should be paying. That is the real scandal

There is little evidence that Vulture Funds will hound the borrowers more than the main banks

· Borrowers whose loans are sold will have the same legal protections.

· The Code of Conduct on Mortgage Arrears will continue to apply

· Lenders are prevented from taking trackers from home owners in default

· However, Cerberus may be more efficient or may be less of a soft touch in dealing with defaulters

· But if they try to repossess a family home, they will face the same extremely difficult legal system

·

· Banks are three times more likely to take legal action than vulture funds

· Borrowers in negative equity are much more likely to get a write off from a vulture fund



Irish borrowers are the best protected in the World

· Irish banks have restructured over 100,000 mortgages , while fewer than 10,000 borrowers have lost their homes through voluntary sale or repossession

· The Code of Conduct on Mortgage Arrears gives every borrower a great opportunity to have their mortgage rescheduled

· The Personal Insolvency Arrangements means that many borrowers can have their negative equity written off. In some cases, the banks have imposed deals on banks which were outrageously generous to the borrowers.

In May 2016, Ulster Bank sold 900 homes which were already in the courts

· These were the non-engaging borrowers

· 95% were over 2 years in arrears

· Part of a portfolio sold to Cerberus

About Cerberus aka Promontoria (Pluto) Ltd

· Have already bought mortgages from Ulster Bank, Danske and Stepstone

· Loans will probably be managed by [broken link removed] ( formerly Capita )

· Cerberus is the three headed dog which guards the entrance to the Underworld
 
Last edited:
On RTE radio FF were giving out about this sale. But Karl Deeter I think it was said there was nothing wrong with this same and that vulture funds were nothing to be worried about.
 
Delboy said:
83 months is 7 years. And thats the average!!!
Click to expand...

PDH: 71% first entered arrears a minimum of 7 years ago.

Hi Delboy

I had never seen defaulting data published in this manner. Not sure how to interpret it.

Most people got into difficulty some years ago with the loss of jobs and the drop in self-employed income. There aren't that many customers whose arrears began recently.

Some of these have been irresponsible for years.
Some have been struggling for years.

Brendan
 
Was there a dip in employment in 2011. But since then I know most of my family are back in full employment for quite a few years. And you can tell by the traffic on the roads that more people are working. So I wonder why these people have 7 years of problems.
 
Burgess was on the radio this morning, Newstalk, about an hour ago speaking about this (I only got the tail end of it).
 
Last edited:
The Bank need to cut their losses so for me no issues with the sale, Call them what you like and Vultures if you must but the system needs parties that buy distressed loans in bulk, not all debtors are genuine and up to seven years arrears takes forbearance to another level.

That said the bulk purchasers still have their work cut out to get a return from a group of hardcore non payers with our Court system.
 
A lot of political opportunism at play, these loans need to be cleared out and dealt with, 7 years is ridiculous.
 
Brendan Burgess said:
I just read through the first few of them and they are generally supportive of Ulster Bank.

Brendan
Click to expand...
The good ones are hidden in the replies. How we bailed out the banks, these people will be made homeless, fascist government and we need an election. These people were also the victims of austerity.
 
It needs to be asked what % of the properties that are seven years in arrears have been effected by pyrite or mica. The latter surely renders a property worthless.
 
Maybe they have a long term illness. Maybe they had to look after sick children or parents.
I like the way we jump to the conclusion that they are all hard core non payers, non-engaging borrowers.

Hard core non payers, non-engaging borrowers obvious are part of this. But if they have 3~4 average forbearance agreements.
There is an absence of any information of how many make regular payments even if they have missed a lot.

Seems like the information is filtered to only telling half the story here.
 
Palerider said:
The Bank need to cut their losses so for me no issues with the sale, Call them what you like and Vultures if you must but the system needs parties that buy distressed loans in bulk, not all debtors are genuine and up to seven years arrears takes forbearance to another level.

That said the bulk purchasers still have their work cut out to get a return from a group of hardcore non payers with our Court system.
Click to expand...

What if their arrears were reducing over the 7 yrs, stayed the same or increased.

Some one else previously posted transcripts from the courts where the banks and similar were very poorly prepared for going to court, often having to return numerous times on the same case for this reason.

I think more precision in filtering the genuine from the cynical borrowers is needed.
 
does it really matter though if its genuine or cynical, if someone is in 7 years arrears its probably not going to be resolved.
 
Brendan Burgess said:
Average arrears: just over 4 years
Average amount: €61,000
70% of them started going into arrears 7 years ago.
Click to expand...

Just to clarify what this means.

If I first missed a payment 12 months ago and have paid nothing since, I started going into arrears 12 months ago and I have 12 months arrears.

If I have paid half my mortgage for the last 24 months, I started going into arrears 24 months ago, but I have 12 months arrears.

Likewise, if I missed a whole 12 months of payments 7 years ago but have paid my mortgage in full ever since, but have not paid anything off the arrears, I started going into arrears 7 years ago, but I am 12 months in arrears.


I have always argued that these aren't terribly useful measures. The lenders and the Central Bank should publish the payment records of people compared to the interest charged. In other words, if someone has paid the interest in full on their mortgage over the last year, then that should be regarded as a profitable mortgage and should not be sold - assuming that they can't pay any more.

Brendan
 
You must log in or register to reply here.
Back
Top