The announcement by the special liquidators is a real positive for the State. The vast majority of the loan portfolios will be sold to third parties, which significantly reduces the State's liabilities. The completion of these major portfolio sales represents a significant milestone for the State in relation to the liquidation of IBRC and significantly limits the amount of assets that are now likely to transfer to NAMA as a result of this process.
The two purchasers of the residential mortgage loans, Loanstar and Oaktree, have both committed to servicing these books in accordance with the terms of the Central Bank Code of Conduct on Mortgage Arrears. As I have previously stated, if it becomes evident that the voluntary application of the code is not delivering the requisite protections for mortgage holders in arrears, I will bring forward the required legislation. Draft heads of legislation have already been sent to the Central Bank for their consideration in advance of more detailed engagement with the Attorney General s office.
It is important to highlight that the contractual terms and conditions of all customer mortgages and other borrowings of Irish Bank Resolution Corporation have not changed as a result of the appointment of the Special Liquidators nor will those terms and conditions change as a result of the sale of these obligations to a third party. Purchasers of mortgage loans will be obliged to honour the legal terms of the loan agreements.
