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These vulture funds are about to acquire another €9bn before the year is out with letters due to be sent to mortgage-holders in early 2020.

Who, and what, exactly are these funds and who is benefiting from their profiteering?

Vulture funds are private equity firms and pension funds that purchase non-performing or distressed loans at heavily discounted prices, which are eventually sold for profit.

They invest in several different asset classes, one of which is debt, and they are attractive prospects for banks, as they can clear non-performing loans off their books.

These loans are usually related to commercial or residential property, and vulture funds buy with the aim of taking charge and possession of the asset, through either a receiver or the courts.

Many homeowners were not even aware their mortgage was sold to a vulture fund.

The UN special rapporteur on the right to housing, Leilani Farha earlier this year sent a letter to the Irish government noting how they have facilitated housing financing through “preferential tax laws and weak tenant protections among other measures”.

The report was highly critical of Ireland for allowing vulture funds buy up properties, which has led to rocketing rents and a worsening housing crisis.

The report states that “almost overnight multinational private equity and asset management firms like Blackstone, have become the biggest landlords in the world, purchasing thousands and thousands of units… they have changed the global housing landscape”.

So who are the vulture funds operating in Ireland?

CEREBRUS

A US private equity firm created to mainly operate in the distressed debt market, they have been active in Ireland, among their largest purchases was a portfolio of commercial property loans from Ulster Bank.

GOLDMAN SACHS

The world’s largest investment bank, they were memorably described by US journalist, Matt Taibbi as a “great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”

Goldman Sachs’s three main vulture funds, Ennis Property Finance, Beltany Property Finance and Liffey Acquisitions, have collected almost €1 billion from local borrowers in the last two years on distressed property loans.

Beltany Property Finance caused widespread anger in 2016 when it threatened to evict more than 100 families from their rented homes in Tyrrelstown.

LONE STAR

Another of the world’s largest private equity firms, Lone Star and its affiliate Shoreline Residential, are the main vulture funds which bought the Irish Bank Resolution Corporation (IBRC) mortgage loans.

Shoreline employs Pepper Asset Servicing to manage its portfolio in Ireland.

BLACKSTONE

World’s biggest private equity firm have been an active investor in Ireland since the economic crisis and the collapse of the property market.

START MORTGAGES

Another affiliate of Lone Star, Start Mortgages bought a portfolio of loans off Permanent TSB in September made up of 1,422 home mortgages and 510 buy-to-let mortgages, with a net book value of €274m.

Start are one of the most active vulture funds in taking legal proceedings against customers.

APOLLO GLOBAL MANAGEMENT

A leading US “global alternative investment manager” Apollo bought a portfolio of Irish home loans from Lloyds Bank in 2013 for €307m.

NEW RULES ON HOW VULTURE FUNDS CAN OPERATE IN IRELAND

This week, new rules were announced aimed at helping consumers resolve mortgage disputes with vulture funds.

The deal between the Banking and Payments Federation of Ireland (BPFI), the State’s main banking lobby group, and the Money Advice and Budgeting Service (MABS) will see an information leaflet created for borrowers.

The deal sets out the rules of engagement between banks or funds and MABS, when they are representing borrowers.

It provides for how MABS and lenders can work together to try to resolve mortgage arrears for those borrowers who have already exhausted the Central Bank’s mortgage arrears resolution process, and are entering or are about to enter the legal process.

As per the new rules, where a mortgage is sold by a bank to a third party, that party must appoint a credit servicing firm to manage it and the protections afforded by the Central Bank’s Code of Conduct on Mortgage Arrears still apply.

This comes on foot of concern that borrowers whose loans were sold off by banks to third parties, would not be afforded the same consumer protections.

A new consumer information leaflet, “Protections If Your Mortgage Is Sold to a Third Party”, has been published to accompany the agreement.

However, David Hall, CEO of the Irish Mortgage Holders Organisation, was critical of the new agreement between the BPFI and MABS.

“This morning’s ‘Agreement’ raises more questions than answers and appears to favour vultures rather than customers, not least whether this informal scheme helps vultures bypass the current insolvency process with its checks and balances,” he said.

“Already people are asking is this ‘code’ an attempt by vultures to block people availing of ever improving insolvency arrangements.

“Vultures don’t like some of the insolvency arrangements where, despite some recent high-profile cases, many ordinary families have gotten good insolvency arrangements approved.

“I welcome the recognition by the Banking Federation and MABS that more than 40,000 citizens are in crisis, a potential tsunami in anyone’s language.

“The timing of this is curious, given that the Central Bank is examining restructuring arrangements vultures are doing.

“There is an old saying about the need to be wary of Greeks bearing gifts.”