Peadar Tóibín
Ceist:174. Deputy Peadar Tóibín asked the Minister for Finance his views on whether families should be allowed to purchase properties for the same amount at which they are sold to vulture funds. [54198/18]
Amharc ar fhreagraTuesday, 15 January 2019
Ceisteanna (174)
Freagraí scríofa
I have been advised by the Central Bank of Ireland that when a consumer takes out a loan from a regulated lender (“the original lender”) it is subject to all the relevant Irish and EU consumer protections. Most loan agreements include a clause that allows the original lender to sell the loan on to another firm and when a loan is sold on to another regulated entity, the relevant Irish and EU consumer protections continue to apply. However, as Minister for Finance, I am unable to interfere with any commercial decision of a financial entity.
The Consumer Protection (Regulation of Credit Servicing Firms) Act 2015 ensures that the protections which applied before a loan was sold will continue to apply. The recently enacted Consumer Protection (Regulation of Credit Servicing Firms) Act 2018 will require that loan owners are regulated by the Central Bank.
There are both practical and commercial reasons why it would not be appropriate to allow borrowers to purchase loans for the same rate that they are sold to funds.
It is incumbent on the seller of loans to obtain the best price it can for them to improve the bank's capital position and enable it to continue lending to the real economy. Management may take the decision that it is more efficient and cost effective to make a single bulk sale than multiple individual sales with no certainty about completions. Disclosing the price is an extremely commercially sensitive issue and could lead to a breakdown of repayments. The rights and obligations of the borrower remain unchanged but the borrower may be less inclined to meet these obligations if they are aware of the discount which may have applied.
In addition, the discount often applies at a loan book level and specific discounts are not applied to individual loans. There can be wide variances for individual loans from the aggregate amount.
The Government is committed to supporting people in mortgage arrears to remain in their homes and there are a range of supports and services in place to assist people in that regard, including the Mortgage to Rent scheme; the personal insolvency system; and the Abhaile service which provides those in mortgage arrears with access to free financial and/or legal advice from professionals to advise them on their situation.