"vulture funds just want to evict people to turn a quick profit"

Brendan Burgess

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This is a point made by many people in criticising the vulture funds.

But they can turn a quick profit by selling the mortgages on. I want to compile a list of such transactions.

1) March 2018 Goldman Sachs and Pimco issued a bond based on the Danske performing mortgages they bought.

Goldman Sachs and Pimco, the buyers of Danske's €1.74bn residual retail book, have moved swiftly to capitalise on the rising investor appetite for Irish residential mortgages with the launch of a €1.55bn bond deal backed by performing home loans.


Goldman Sachs and Pimco paid close to 95c in the euro for the Danish bank's retail book, outmuscling competition from final-round bidders Bank of Ireland, Elliot Management and Prudential.

2) October 2017 Bank of Ireland bought 1,000 home loans from Shoreline Residential

[broken link removed], the Sunday Times reports, has bought a portfolio of more than 1,000 home mortgages from Shoreline Residential, an affiliate of the American private equity group Lone Star, for an undisclosed amount. The deal represents a further step in the bank’s strategy of growing its loan book by acquiring mortgages after they have been restructured by distressed debt specialists.

Any other examples?
 
Even the name vulture funds gives off the connotation that they are picking at the carcasses of the distressed, something peddled by the politicians. But imagine what state the pillar banks would still be in if they still had all of these debts? And from a mortgage holder point of view, the main banks wouldn't negotiate with people unless they were willing to give 5 years of pain for a write off. The vulture funds bought the debt at a discount, so are much more willing to do a deal if they are making a profit in doing so.



Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Yet to meet someone who got a "deal" unless they could provide cash up front, or refinance elsewhere. 4 years into having my loan bought by a vulture fund, havent missed a payment in that time, and still in the court system, tanager ltd,,plenty plenty people in the exact same boat
 
Some people try to merge the issue of social housing and housing policy with private housing. Investment funds are only interested in the latter.
People only try the merge the two issues because of the complete abdication of Govt to provide social housing. They've outsourced it, to the private sector.
Some countries have social housing policies that put restrictions on private housing development, to make provision for social housing.
But in Ireland as with much of planning and building its largely circumvented, and the Govt turns a blind eye to it. Whereas other countries enforce it.

So if the investment funds have a negative impact on social housing, then its because the Govt allows it.
 
Brendan Burgess said:
This is a point made by many people in criticising the vulture funds.
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Probably because there is more than a grain of truth in it. It’s not the absolute truth using the language you did (i.e. “just wat to evict people”), but it’s certainly true that vulture funds just want to turn a quick profit. Because of the way they operate, evictions are much more likely to happen.

There is a fundamental difference between the banks and the vulture funds: the timeframe of the loan provided. Banks provided the loans originally on a long timeframe (i.e. decades); vulture funds are interested in timeframes measured in months, typically less than 24. This has a huge impact on the type of solutions possible for someone who’s loan has been sold to a fund. Essentially, anything that does not provide a cash return for them within their timeframe will not be contemplated.

There are certainly some advantages of dealing with a fund in preference to a bank, notably the speed they operate at if you are in a position to come to an arrangement, but because of their timescales the chances of losing your home, either by forced sale or repossession, is greatly increased.

Thus, it is not an irrational complaint to have your loan transferred to a vulture fund.
 
newtothis said:
Thus, it is not an irrational complaint to have your loan transferred to a vulture fund.
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I'm sorry but you haven't actually proved your point. How are evictions more likely to occur? And is it a fact that there are more evictions in Ireland with vulture funds.
 
One of the spokesmen from one of these funds was interviewed on Irish TV about one of their deals here where they bought a load of apartments.
He seemed baffled, that evictions and quick profits were seen as a negative. From their perspective it was just normal healthy business in their sector.
I got the impression he thought those who had a problem with it needed to cop on.
 
AlbacoreA said:
I thought he did. Transfer to a vulture fund will potentially shorten the timeframe in which you have to resolve any issues.
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Go on...

As in I'm not getting how this proves that vulture funds just want to evict people.

Nor am I getting if evicting people is in of itself a bad thing in every case. I read yesterday of a woman with two grown up children who had just purged her contempt and got out of jail having gone into an investment property and lived there in order to stop the banks getting their hands on it. She served some time in jail. But they weren't paying anything. There was a worry by the receiver that her now agreeing to leave might mean the two children would have to be evicted.
 
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His first paragraph. I can't say it clearer than he has done.

I don't really see the point of repeating tabloid headlines which are deliberately made strawman like by the media and newspapers to sell adds clicks and newspapers.

We on this forum know the investment fund have a job to do. This forum is very biased to one side of social issues. That simply a product of its demographic. So it's really a going to be a one sided thread. Is that really interesting?

It would be more interesting to look at economic policies that allow people to make a return on investment while also contributing to some social in this case social housing need.

People who are abusing the process should of course be rapidly dealt with. I'm not talking about those. But that will be the only people who will be talked about under a thread title like that here.
 
Bronte said:
Go on...

As in I'm not getting how this proves that vulture funds just want to evict people.
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Because that's not what I said! Read it again: what I said was that there was more than a grain of truth in the statement "vulture funds just want to evict people to turn a quick profit". I said explicitly it is not the absolute truth: it's clearly overstated in terms of their intent. The truth is that they want to turn a quick profit (I assume you accept that?). I then want to explain why it's a side effect of that which makes evictions more likely. It's kind of irrelevant if you're on the receiving end if an eviction is the primary motivation of the company evicting you or just a side effect: the result is the same.

There’s a narrative that’s put out by some questioning what’s the problem with vulture funds: it’s just a transfer of a loan, the terms of which have not changed. My point is that there is a problem: because of the way they operate you have no prospect of a long-term solution being put in place and a much higher chance of you losing your home.

Take someone who got into difficulties due to redundancy or whatever, and as a result have arrears built up. They have now recovered their position and can pay off their original repayment amount, but not the arrears. A sensible solution is maybe to extend the loan by a couple of years and/or pay off the arears over the remainder of the loan. Try asking that of a vulture fund: you will be told to go whistle (I know, I tried). You will also be pressured to come up with the arrears in the short term. I know in that circumstance your chance of losing your home is minimal, but this is only due to the entirely sensible approach being taken by the courts. That’s down to policy though, not the law: you have the threat hanging over you the whole time.

I was lucky enough to get out from under a vulture fund, but it’s next to impossible to finance a new loan to repay and get back to a conventional mortgage.

My point remains: there is a significant difference in dealing with vulture funds and you are most definitely more likely to lose your home as a result.
 
Maybe these types of marginal cases are few. We don't know. The information released seems to avoid that sort of breakdown .
 
newtothis said:
My point is that there is a problem: because of the way they operate you have no prospect of a long-term solution being put in place
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Up to June 2018 Vultures have done more Mortgage to Rents than banks. Also Courts can, and have, forced through PIAs on Vultures under Section 115 A of the Personal Insolvency Act, resulting in borrowers staying in their homes.
 
AlbacoreA said:
Maybe these types of marginal cases are few. We don't know. The information released seems to avoid that sort of breakdown .
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I'd accept it's impossible to know for sure: it's only after a couple of years in you'd get even basic comparative figures for repossessions and perhaps never for enforced sales.

However, I doubt the scenario I described is a marginal case. As I said, I know from personal experience the differences between dealing with banks and vulture funds (in my case Danske and Cerberus respectively). I was lucky and managed to get a mortgage elsewhere to pay off the original one, with a write-down to account for the difference in interest rate. However, knowing how difficult it was to get the new mortgage, I’d be very surprised if that’s a common outcome. Much more likely (and I know this from speaking with others in similar situations) is to be forced into an unwanted sale by threat of or actual court action.

As I said, there is a very real difference between banks and vulture funds, and people are right to be concerned if their loan is transferred.
 
demoivre said:
Up to June 2018 Vultures have done more Mortgage to Rents than banks.
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A meaningless statement by itself. How many mortgages are there with banks? how many with vulture funds?

demoivre said:
Also Courts can, and have, forced through PIAs...
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Another example of the courts trying to apply some sense and balance to the lender/customer relationship. The operative word is "forced"......
 
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