Mr. David Hall:

I thank the Chairman, Deputies and Senators for the invitation to give evidence today in respect of loan sales. It may seem strange to say that it is a pleasure to be here but it is for one key reason. No other committee of these Houses recognises more clearly that it is the duty of Irish politicians to speak truth to power. No other committee is more clearly engaged in the key duty of Irish politicians to keep the people safe and that is what I wish to speak of here today. I acknowledge and remind everyone of the many people who are in arrears who are watching these proceedings. I say a particular "Hello" to my bank and to my vulture fund friends and their spokespersons.

The Irish Mortgage Holders Organisation, IMHO, is one of two registered national charities that advocate for and help people who are in debt. The fact that there are only two tells us a great deal in comparison with other sectors. We negotiate with creditors, informally and formally, via the Insolvency Service of Ireland, and we have an in-house personal insolvency practitioner registered with the service. We also provide a free bankruptcy service after all other options have been exhausted. A quarter of all those adjudicated as bankrupt last year were clients of ours.

Since our foundation in 2012, we have helped over 8,000 families, with 90% of them staying in their homes. I am speaking to the committee today with significant front-line experience of the actual challenges and not from any observer’s seat. The mental health of thousands of citizens has been and is suffering from the effects of being tortured by banks, creditors and a system that has protected banks, big corporations and developers but abandoned ordinary citizens. I am very proud of the work done by the IMHO team and board to date but, despite all of that work, I genuinely fear we have entered a dangerous stage in the mortgage arrears story.

We have seen this moment coming for a period. Recognising that many people left behind in mortgage arrears would lose their home, I and my fellow directors established iCare Housing, an approved housing body set up specifically to facilitate mortgage-to-rent. AIB, to its credit, fully supported us in establishing ourselves and has approved us for funding to buy homes. Much to our surprise, and perhaps that of AIB, they took a leap of faith but many more will be needed.

The involvement of a debtor advocate charity to help people via the IMHO has been of great help. We have cases involving 536 families - 2,300 people - in our pipeline and we expect to buy the first 99 homes next month. This change has transformed, and possibly even saved, lives and the combination of an approved housing body and the IMHO has been very positive.

I have included a copy of the enhanced mortgage to rent process, which was adopted and changed with the help of the Housing Agency, which has been exceptionally helpful in establishing iCare and moving things forward, and full details of the pipeline and all the various banks it represents to the committee ahead of today. All banks, including vulture funds, are participating in mortgage to rent with one notable exception. Bank of Ireland still refuses to write off the residual debt of those people eligible for social housing. Despite the fact that these people are absolutely goosed and have no money, the bank still resists writing off the residual debt. We work closely with all other debtor support organisations such as MABS, FLAC, Phoenix Project, StepChange and the Insolvency Service of Ireland along with the many personal insolvency practitioners throughout the country. We are proud to be part of this exceptional family that helps debtors in this country. I am delighted to be addressing this committee as I believe it is the strongest voice those in mortgage arrears have in this Oireachtas. This committee has seen at first hand the deception of banks and is probably the only forum in the State where bankers are regularly seen by the public to be held to account. This important work needs to be continued by the committee with the same vigour with which it has been pursued to date.

There has been much commentary from various quarters around loan sales to vulture funds. Many have commented on how vulture funds do good deals and the fact that they give write offs giving the impression they are warm and cuddly. This is rubbish. Vulture funds are a cancer on our society. They have one thing on their agenda and that is feasting on the carcases of those who suffered because of the gambling by banks. These are ordinary citizens whose lives collapsed when the crash hit, who lost jobs, who became ill, who lost relationships or who lost their lives. One of the greatest affronts to those citizens crucified by the recession was the Government’s willingness to sell them out to vultures. This included not only those in arrears but those with performing loans. When someone goes into mortgage arrears, their bank assesses them against its waterfall of restructuring solutions. These include capitalisation of arrears, term extensions, reduction in interest rate, split mortgages and voluntary sale for loss or silent repossessions. This waterfall allows for banks, albeit for their own benefit, to offer solutions that cost them the least amount possible. Yes, 119,000 restructures have taken place, which is very welcome, but the Central Bank recently reminded us that 15,000 of these have failed. Some of these are precarious solutions such as capitalisation of arrears. In spite of vulture fund lovers' statements, what is critical is the fact that vulture funds do not restructure loans. This point is simply not being understood. They buy to obtain the asset, sell it and profit. If someone wants to lose their home and have their debt written off then vultures are for them. If someone wants somewhere to live, they have a problem if they are in mortgage arrears and their loan is sold to a vulture fund. Vulture funds have no interest in our housing crisis, no interest in any of the stories of those affected and no interest in the people represented by members of this committee in their constituency clinics and in here. As practising politicians, each member has seen this at first hand. Anyone engaged in helping people in mortgage arrears knows this. Those on the side lines profiting from engaging with vultures will blindly support them. Those gurus who claim vultures adhere to contractual terms need to understand that nowhere in any contract does it require the loan owner to offer any restructuring or help. People with arrears have broken the contract and are out of contract. The contract does not exist leaving them exposed. While banks are horrible, out of a mix of legal, fiscal and social necessity and for reasons of PR, they must provide some solutions. By contrast, vultures are a social evil.

I could stay here all day giving examples of how nasty vultures are but, respectfully, the point has been missed. Vultures are a symptom of the failure of Government; the Department of Housing, Planning and Local Government; the Department of Finance; the Central Bank; and the banks. Across all of these self-interested groups, there has been a collective intended or unintended incompetence and-or conspiracy to ignore the fact that the majority of people cannot pay. Banks, Government and bank lovers have allowed a narrative to develop and in some cases, have assiduously fostered the narrative that those in arrears that have not been resolved are messers, strategic defaulters and non-engagers. This is not true. The majority of those in long-term arrears, a number which stands at 31,500 households, cannot pay. I have yet to see someone of sane mind voluntarily turn up to be executed yet some believe they should do so and turn up in a repossession court. Some read details dictated by banks' lawyers about people's non-engagement but very few affidavits are opened in court that state someone can actually pay. I now believe that 17,000 individual mortgage holders, which represents nearly 80,000 people or a Croke Park-full of citizens, will have their homes repossessed. This is because the banks have been complicit in hiding the human crisis and destruction that are ahead. They have hidden the fact that thousands of families simply cannot restructure their loans. They cannot make payments that even meet the Insolvency Service of Ireland requirements and are not eligible for mortgage to rent. This is a human crisis which has not been seen before and this is the actual issue rather than the vultures. The inability of people to pay is the critical issue that has been left behind for those in mortgage arrears.

The banks currently selling loans to vultures are being dishonest. They are cowards by not informing this committee of the severe challenges that exists with customers who have engaged and supplied their financial information but simply cannot pay. They have been vilified as non-engagers. This is simply not true. The banks are outsourcing their dirty work and the vultures will respond enthusiastically by repossessing homes. I believe banks have taken another gamble that it is easier to take the backlash of selling family home loans to vultures rather than the backlash that will ensue from the thousands of customers who cannot pay and whose homes they would have to repossess. Some naively say vultures have not shown any aggression but let us not forget banks have a six-year head start on vultures. Anyone who engaged with a vulture and who tells the truth will ask why they are overly excited about repossessing properties. No loan portfolio in the world performs as well as Ireland given property prices. Many vultures believe they will actually be able to flip on their loan portfolio without having to repossess a single house. Nowhere else in the world is equivalent with regard to house prices going up by 10%.

The banks currently selling loans to vultures are being dishonest. They are cowards by not informing this committee of the severe challenges that exists with customers - customers who have engaged and supplied their financial information but who simply cannot pay. They have been vilified as non-engagers. This is simply not true. The banks are outsourcing their dirty work to vultures who will respond enthusiastically by repossessing homes. I believe banks have taken another gamble that it is easier to take the backlash of selling family home loans to vultures rather than the backlash that will ensue from the thousands of customers who cannot pay and whose homes the banks would have to repossess. Some naively say that vultures have not shown any aggression. Anyone who engaged with a vulture who tells the truth will ask why they are overly excited about repossessing properties. There is no loan portfolio in the world that performs as well as Ireland is with property prices. Many vultures believe they will actually be able to flip on their loan portfolio without having to repossess one house. Nowhere else in the world do house prices go up by 10%.

In representing those in mortgage arrears on the front line, my job is to be truthful with the information we have and the people we represent. The tsunami is coming unless something is done. The data circulated ahead of this meeting showing 600 actual cases shows the challenges - the fact that people have no money and no time and that hidden behind this is ill health, separation, continued loss of employment and the passing of time. Unless steps are taken to establish a NAMA-type organisation that will ensure a debt for equity solution is imposed through the insolvency service or loans that can be managed through a NAMA-type organisation along with immediate reviews of the social housing qualification criteria, we will be walking blindfolded into a massive social crisis. This situation is now so grave that while bashing banks and vulture funds is therapeutic, it actually misses the key issue that 17,000 families, or 80,000 people, cannot pay their mortgages. If we look at the current homelessness list, we can quadruple it because, effectively, that is what is facing us. I thank the committee for its time.