Permanent to ensure Springboard buyer abides by code

Permanent TSB will ensure that the buyer of its Springboard sub-prime mortgage portfolio will sign up to the terms of the Central Bank of Ireland's code of conduct on mortgage arrears (CCMA), the minister for finance Michael Noonan has said.

Mr Noonan was replying ot a questions from Fianna Fail’s finance spokesman Michael McGrath on whether the sale of Springboard was likely to take place before the enactment of legislation to protect mortgage holders whose loans are sold to unregulated third parties.

“Permanent TSB has committed to ensuring that any sale prior to enactment of this legislation, will be to a purchaser that voluntarily signs up to CCMA,” Mr Noonan said.

Springboard Mortgages comprises about 2,200 home loans with a face value of €465 million. It is a non-performing book for Permanent TSB, which is 99.2 per cent owned by the State.

In March, PTSB said Springboard was being prepared for sale and Morgan Stanley was appointed in June to advise on this process.

It is understood that a number of parties have expressed an interest in Sprinboard and a sale is expected in the coming months.

Mr Noonan said his department was currently preparing the Sale of Loan Books to Unregulated Third Parties Bill.

“This will address concerns surrounding the continued applicability of the CCMA after the sale of loan books to unregulated entities,” the minister said. “Detailed engagement with the Attorney General’s office and the Central Bank on draft legislation has now commenced. I have always made it clear that this is a complex issue. The bill is listed for publication in 2015. However, it is intended that the legislation will be commenced as soon as possible.”

Mr Noonan said the Government has always been clear that it would ensure mortgage holders maintained the protection of the CCMA.

"The two unregulated purchasers to date of residential mortgage loans from Irish Bank Resolution Corporation, Loan Star and Oaktree, have both voluntarily committed to servicing these books in accordance with the terms of the CCMA," he said.

"The Irish company [DILOX]which is buying ICS mortgages [from Bank of Ireland]has said that it will apply the relevant codes of conduct and that it has applied to the Central Bank of Ireland for authorisation."