One third of homes in PTSB loan sale have not co-operated with bank

More than a third of the private homes with distressed mortgages that are to be sold by Permanent TSB (PTSB) to an overseas fund have failed to co-operate with the bank at any time since entering arrears.

PTSB, which is 75 per cent State-owned, has agreed to sell loans secured on 10,700 properties, dubbed Project Glas, where borrowers have fallen behind on repayments, to Start, which is backed by US private equity group Lone Star.

Minister for Finance Paschal Donohoe says he is confident the holders of “non-performing” mortgages with PTSB that have been sold to a so-called vulture fund will continue to have the protection of the Central Bank.

They will not be affected by who owns their loan book, he told RTÉ's Morning Ireland.

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He said he did not have the ability to approve or not approve of the sale, as this was prohibited by regulations of the Central Bank. “We need to be fair to the people affected.”

Mr Donohoe said it was a “real issue” for PTSB that 25 per cent of the loans had been in arrears for more than 3½ years.

Restructured

The mortgage holders had “many years” to see how their loans could be restructured, he added.

On average, borrowers owe €175,000, are €28,000 in arrears, and are 3½ years behind with repayments

PTSB had reduced its non-performing loans from €9 billion to €5 billion, but their rate for such loans remained five times the European average, and “that really matters”.

About 7,400 of the PTSB loans relate to private homes, while the remaining 3,300 are buy-to-let properties, which are effectively investment properties rather than family homes. A quarter of loans have been in arrears for more than 3½ years.

On average, borrowers owe €175,000, are €28,000 in arrears, and are 3½ years behind with repayments.

Of the 7,400 private homes, 2,500 of these are deemed “not co-operating”. These are customers who have failed to engage with the bank at any time since entering arrears, or failed to provide it with the information for what’s called a standard financial statement (SFS).

The Minister said his job was “to do the right thing by the taxpayer” and to look after the interests of the taxpayer and the economy in the long term.

Already 120,000 loans had been restructured, he said, of which 87 per cent continued to adhere to the terms.

Code of conduct

Mr Donohoe said he has asked the Central Bank to conduct a review of the code of conduct in relation to restructuring of mortgages and mortgage arrears. Supports were in place through Abhaile and the Insolvency Service and there was a need to be fair to the people affected.

He pointed out that 7,000 split mortgages had been removed from the PTSB sale.

Mr Donohoe also said that the Government remains committed to ensuring that no woman involved in the CervicalCheck controversy will have to go to court; however, the women in question retained the right to go to court if they wished.

He, the Taoiseach and the Minister for Health are “absolutely committed to do what we can on this”.

The Social Democrats called on the Government to put in place workable solutions to stave off the “wholesale sale of Permanent TSB’s non-performing home loans to unregulated vulture funds”.