Looking at how politicians have attempted to protect mortgage holders

by Padraig Conlon

“You criticise me for not intervening with vulture funds. Well, it was a compliment when they were so dubbed in America because vultures, you know, carry out a very good service in the ecology. They clean up dead animals that are littered across the landscape.”

The words of then Minister for Finance, Michael Noonan talking about vulture funds at an Oireachtas Committee on Housing and Homelessness in May 2016.

It was only natural he would defend them, after all he was the very person who invited them into the country.

In figures released to Fianna Fail TD Michael McGrath, which he shared in the Dail in 2015, it was revealed that Michael Noonan had met with private equity groups eight times in 2013 and 2014.

The former Minister was accused of “rolling out the red carpet” for vulture funds, while at the same time ignoring Irish mortgage holders in distress.

He even met with Lone Star, who along with its affiliate Shoreline Residential, were the biggest purchaser of Irish Bank Resolution Corporation (IBRC) mortgage loans, three times in 2014.

In 2013 he twice met with Apollo, who bought a portfolio of Irish home loans from Lloyds Bank in 2013 for €307m.

In total, officials in the Department of Finance met with private equity firms and vulture funds 65 times during 2013 and 2014.

So how have our politicians reacted to the invasion of vulture funds into the Irish market, and what have they done to help struggling Irish homeowners?

The fightback has been led by several Bills brought to the Dail over the past couple of years.

In 2017, Independent TD Kevin “Boxer” Moran put forward the Keeping People in Their Homes Bill 2017 aimed at providing further protections for homeowners in mortgage difficulty.

It proposed that judges evaluate, among other things, a borrower’s family circumstances before granting a possession order in respect of a family home.

In February 2019, the Minister for Justice confirmed the Government would advance the Bill as a Government-sponsored Bill, with some changes, and it was re-named the Land and Conveyancing Law Reform (Amendment) Bill.

At the start of 2018, Michael McGrath was himself behind a Fianna Fáil private members’ Bill, The Consumer Protection (Regulation of Credit Servicing Firms) (Amendment) Bill 2018, to regulate vulture funds.

The Bill, passed on Christmas Eve last year, became operational on January 21st this year, and brings vulture funds within the full suite of Central Bank regulation.

In January, the Dail also voted in favour of Sinn Féin’s No Consent, No Sale Bill which aims to give mortgage holders the power to block the sale of their loans to vulture funds.

Pearse Doherty’s Central Bank (Transfer of Mortgages) Bill puts into law what currently exists as a voluntary Central Bank code, where lenders looking to sell a mortgage must get the borrower’s permission before selling the loan on to a third party.

The Dáil voted by 80 votes to 45 to pass the Bill however the government, and the Central Bank, has opposed the proposed legislation.

In June 2018, Fianna Fail TD, and chair of the Oireachtas Finance Committee, John McGuinness brought The Affordable Housing and Fair Mortgage Bill to the Dail.

Written by Master of the High Court Edmund Honohan, the bill brings together several pieces of Irish and European law, and proposes the establishment of a ‘national affordable cooperative housing exchange’, which would allow not-for-profit housing providers to buy distressed loans and lease the properties to the borrower.

The bill also covers the provision of housing by not-for-profit, non-state entities with ethical funding as well as dealing with evictions and the reconfiguration of the government’s legal advice service Abhaile as a mortgage resolution agency.

The Affordable Housing and Fair Mortgage Bill reached its second stage unopposed, but remains currently before Dáil Éireann, potentially stuck in limbo until there is a change of government next year.

The lack of support for his bill from his own party, Fianna Fail, has been a source of deep frustration for McGuinness.

Addressing party colleagues in a scathing letter last year he said: “Complete silence from Fine Gael and Fianna Fáil on this matter says much for the state of Irish politics today.

“Remember, it is not just mortgages that are being sold, it’s the lives of Irish people, many of whom are where they are because of the reckless lending of the very banks now selling them into destitution.

“Fianna Fáil needs to find its soul and regrow its backbone, become the opposition it should be, rather than the supine partner in government it is, and force the government to act by promoting decency, instead of tolerating greed and keep our people safe by strongly curtailing the actions of all those who seek to reduce their lives to numbers on an enormously profitable balance sheet.”

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