PTSB defends controversial sale of 3.7 billion euros in mortgages


Updated at 8.5 hours

PERMANENT TSB Has issued a statement defending its plan to sell a € 3.7 billion portfolio of non-performing loans known as Project Glas.

The proposed sale of 18,000 properties, including 14,000 private homes, has become the subject of a political battle in recent days and has been raised several times today in questions from leaders.

Taoiseach Leo Varadkar told the Dáil earlier that Permanent TSB, which is 75% state-owned, has yet to find a buyer.

Fianna Fáil sought to challenge the government on the issue and launched a bid to block the planned sale of PTSB.

Party leader Micheál Martin told the Taoiseach that the bank was “outsourcing its dirty work” and said a message had to be sent by the government that it would not accept such behavior.

“The government is very supportive of families,” said the Taoiseach.

He said it would be illegal for the government to educate the bank on the sale issue, but said that the state being a majority shareholder, the bank must consult with the finance minister – which Varadkar said the bank had not yet done so.

The Taoiseach said the government was willing to consider whether further protections and regulations were needed.

PTSB statement

In its statement tonight, Permanent TSB said that around € 2 billion of the loans it plans to sell consist of private real estate loans.

He said the loans were “generally from clients who have not contracted the bank, whose mortgages are not viable or who have not been able to meet the terms of the various treatments put in place.”

On this part of Project Glas, some account holders have not entered into a relationship with the Bank for more than 7 years and on average the loans have been overdue for more than 3.5 years.

Many have not made any payments for years. asked the Permanent TSB spokesperson if the bank could provide a more detailed breakdown of the number of customers who had not signed up for more than seven years. They said no further information was available tonight.

The statement said the sale of non-performing loans to third parties is common in the UK and other European countries.

“In the UK there are a number of examples since the onset of the current crisis where the UK government has ceded home loans to third parties.”

Legacy of the crisis

In a section of its statement titled “After Ten Years”, the PTSB explained why it believed it should be allowed to proceed with the sale, describing non-performing loans as “one of the last major issues left over from the crisis. financial ”.

“All stakeholders have worked extremely hard for almost a decade to minimize the number of non-performing loans and to give clients the space and time to try to solve their problems on their own.

“However, we are now almost ten years after the start of the crisis. A new generation of home buyers must be able to engage with healthy and competitive banks that can finance and buy homes and the banks themselves must ensure that they are strong, profitable and able to withstand to potential future shocks.

“In view of all this and the existence of appropriate consumer protection regulations regarding interaction with customers by any acquirer, the Bank believes that the time has come to implement measures considered to be part of the normal banking practices in the UK and other European countries.

These include allowing third parties to settle these non-performing loans and allowing banks to use their resources to focus on providing new loans to homebuyers and businesses that need access to finance. credit.

Vulture funds

Michael McGrath, Fianna Fáil’s finance spokesperson, had advocated for new protections for mortgage holders, the Taoiseach said earlier today, adding that he had asked Finance Minister Paschal Donohoe to work with McGrath on the matter.

Speaking to reporters earlier, McGrath said all mortgagees should have the same protections.

He said:

“Do you think vulture funds really have an interest in building a portfolio of loans over 15 to 20 years?

They absolutely do not. They are here to make a quick buck and we know what they will do – they will move on [mortgage-holders] at the first opportunity, especially as house prices continue to rise.

It’s not just names on a list, it’s families, some of them are in a tough spot.

Many have engaged with the bank, they have agreed to restructure the loans, they have agreed to split the mortgages, they are fully on the terms of their loan, but they end up in a cluster of non-performing loans – why?

He added that the legislation his party is proposing must be a priority.

In the Dáil, Micheál Martin raised concerns that any legislation introduced should be speeded up and allowed to go through all stages quickly.

“We have time,” Varadkar replied.

Varadkar said he understood that mortgage holders did not need more stress, adding that the government would “openly and constructively” consider new protections.

– With reporting by Daragh Brophy

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