Dáil Éireann Debate, Tuesday - 18 December 2018
161. Deputy Joan Burton asked the Minister for Finance his views on mortgage customers having their loans sold to other lenders despite meeting and exceeding repayment agreements; and if he will make a statement on the matter. [53408/18]
Amharc ar fhreagra162. Deputy Joan Burton asked the Minister for Finance the actions he has taken in terms of oversight of the sale of mortgages to another lender; the number of mortgage holders who have been affected; and the considerations he has given to worried customers who have met their repayments and are concerned for the future. [53409/18]
Amharc ar fhreagraI propose to take Questions Nos. 161 and 162 together.
In answering the Deputy's questions, I have assumed that she is referring to the recent securitisation of a portfolio of NPLs announced by PTSB - Project Glenbeigh.
The Deputy will be aware that the reduction in the level of non performing loans (NPLs) across European banks is a major priority for the banking regulator, the SSM. The Irish banks have made huge progress in this regard since the height of the crisis with NPLs at the banks in which the State has a shareholding reducing by 70% from €54bn to €16bn at end-June 2018. A major contributor to this has been the almost 136,000 mortgage restructures that have been put in place.
Despite this progress, the NPL ratios at the Irish banks remain at an elevated level and are well above the European average of around 4%. PTSB is a particular outlier and had a ratio of 16% even after the bank’s loan sale – Project Glas – which was announced in July. Project Glenbeigh – PTSB’s second NPL transaction of 2018 announced on 29th November, will achieve a further significant reduction in the bank’s NPL ratio to below 10%.
It is important to reiterate that the protections in place for all borrowers before a sale, either by way of securitisation or otherwise, remain unchanged. Start Mortgages, who purchased the Glas portfolio in July, and Pepper, who now hold legal title to the Glenbeigh mortgages and who will act as servicer and administrator of the mortgages, are both regulated by the Central Bank of Ireland. When dealing with borrowers, these firms are required to comply with the Consumer Protection Code and the Code of Conduct for Mortgage Arrears. Furthermore, it has been confirmed in the case of this latest transaction that the terms of an agreed restructure will continue to be honoured.
In addition, earlier this year I asked the Central Bank to carry out a review of the CCMA to ensure it remains as effective as possible. The result of this review was published in October and it is encouraging to note that the key findings included confirmation that for borrowers who engaged with the process, the CCMA is working effectively as it is intended in the context of the sale of loans by regulated lenders.
In relation to the number of mortgage holders affected, PTSB confirmed in its press release that the mortgages involved were linked to 6,272 borrowing relationships where a borrowing relationship can be a single borrower or two or more joint borrowers. The following link to the bank's press release is included for the benefit of the Deputy:
www.permanenttsbgroup.ie/media/press-releases/2018/29-11-2018a.aspx.
Finally, I wish to highlight that I cannot stop loan sales, even by the banks in which the State has a shareholding. These decisions are the responsibility of the Board and management of the banks which must be run on an independent and commercial basis. The banks’ independence is protected by Relationship Frameworks, which are legally binding documents that I cannot change unilaterally.
