Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

Bank resolution registration across Europe is an entirely different matter to that of how mortgage holders of an individual institution which is in liquidation might be treated. There is a misunderstanding about what is happening. An independent liquidator has been put in place under law. Specific legislation in this regard was put through the Houses of the Oireachtas. His responsibility is to get the best deal possible for the taxpayer and value for money. What is on the market are the mortgage books of former Irish Nationwide, which were transferred into IBRC. There is a great deal of misunderstanding about this. The holder of a performing mortgage who has met each monthly payment of the mortgage for the past 15 years and now owes only €50,000 might well ask for a discount. However, a performing mortgage does not get discounted because the value of it is par. Only impaired mortgages are discounted. It is like the bag of apples, some of which are good and others of which are not so good. The value for the purchaser is not in the performing mortgages but in the impaired mortgages because by definition the value of a performing mortgage is par. Basically, the profit to be made by anybody who purchases is on the better management of the accounts.

Deputy Higgins asked how the individual mortgage holder will be affected. First, their mortgages are held under contract and there will be no change in the contractual position regardless of who purchases them. It is the additional protocols put in place by the Central Bank in regard to how a person with an impaired mortgage could be approached and treated by the banks that will not apply if a purchase is outside of the Irish regulatory system. We have had two examples of this already because this is not the first mortgage book that has been sold. Two tranches of mortgages have been already purchased. In both cases, the purchasers who were outside of the Irish regulatory system voluntarily agreed to apply all the protocols. Any legal adviser would tell them that is what they should do because in the exceptional number of cases that have gone before the court for repossession the first question asked by the judge was if all of the obligations that are supposed to be fulfilled under the Central Bank protocols have been. If a lending agency has not done so the court will not give an order to proceed with a repossession. I am fully aware of what the Deputy is saying. However, we are going to wait to see who buys the mortgage book, following which we will do as we did in the other two cases. My officials have already had discussions on this with the Central Bank. The purchaser will be told of the protocols applicable in Ireland which we expect him or her to fulfil, advising that it is in their own interest to do so.

Deputy Michael McGrath will shortly publish a Bill to enshrine this in law. If at the end of the day legislation is required we will look at whether that Bill would fulfil the objectives. It is my objective too that when the mortgage books are sold the mortgage holders will have the same level of protection as they currently have.