Dáil Éireann Debate, Tuesday - 24 June 2014
132. Deputy Michael McGrath asked the Minister for Finance if he will address the concerns of an Irish Bank Resolution Corporation mortgage holder raised in correspondence (details supplied); and if he will make a statement on the matter. [26608/14]
View answerI have been advised by the Special Liquidators that 64% of the residential mortgage portfolio of Irish Bank Resolution Corporation Limited (in Special Liquidation) has been sold to two buyers, namely Lone Star and Oaktree Capital Management, L.P. In relation to the remaining residential mortgage loans the Special Liquidators will now devise and manage a further sale process in respect of these unsold assets in a manner that maximises the return to all remaining creditors of IBRC, including the State. Those borrowers whose loans have not yet been sold will be receiving communication from the Special Liquidators over the coming weeks.
I have been informed by the Special Liquidators that the sale of a residential mortgage does not change the terms and conditions of the loan agreement in any way. Irrespective of who acquires the loan(s) they will be required to honour the legal terms and conditions of the existing loan agreement(s), including previous restructuring arrangements put in place as well as offers made to customers prior to the sale. The terms and conditions of a mortgage continue to apply on the sale of the mortgage and the lender may have discretion with regard to the interest rate charged depending on these terms and conditions. As Minister for Finance, I do not regulate interest rates and this situation applies to both regulated entities such as the banks and unregulated entities. The Government is keenly aware of the concerns raised by the Central Bank and others regarding the potential loss of protection under the Code of Conduct on Mortgage Arrears (CCMA). The Government is committed to bringing forward legislation that will protect mortgage holders and believes the sale of loan books to unregulated third parties Bill is the most effective way to address the issue in a comprehensive manner. The legislation will ensure the protection of the CCMA or any replacement code in the future will continue to apply to mortgages which are sold to unregulated financial service providers.
In the interim the Government has always been clear that we fully expected that any purchaser of the IBRC mortgage portfolio would service the loan books in accordance with the CCMA. The two purchasers of the IBRC residential mortgage loans to date, Loanstar and Oaktree, have both committed to servicing these books in accordance with the terms of the CCMA.
