Mr. David Hall:

I thank the Chairman, the Deputies and the Senators for the invitation to address this meeting on Deputy Doherty’s No Consent, No Sale Bill which the committee is considering. The Irish Mortgage Holders Organisation is one of only two debt charities within the State. We have helped more than 10,000 families restructure their mortgages since we were established in 2012. It is with this front-line experience I make this address today with the support of my entire team.

We are at a critical stage in families being fed to vultures. Deputies and Senators can note that I did say "fed to vultures”, because it is not just a matter of loans being sold but of real families, real people and real lives being fed to vultures. This is a real social issue. These sales are as a result of incompetence from banks in not offering realistic restructures to customers in mortgage arrears. The Central Bank has been a party to this failure by limiting the banks options. Banks have resisted the personal insolvency legislation and taken various legal challenges to aspects of the legislation to prevent its impact on writing down debt. We are amid bureaucratic corruption in which large bodies such as the Central Bank and the Department of Finance utter unevidenced statements with authority designed to scaremonger. A State-supported system is pitching citizens against each other with misleading commentary about the effects on interest rates if such a Bill as this passed. This was recently demonstrated when the same warnings were issued ahead of Deputy Michael McGrath's vulture fund regulation Bill and when commentary was made on both the low number of repossessions and on their ineffectiveness. Only last week AIB again reduced interest rates, which shows that the completely opposite effect to that suggested by the commentary is being experienced.

While trying to protect banks, these bodies fail to state that this is not an ongoing mortgage arrears issue but an historic issue. This is not an active concern of banks and is therefore currently having no effect on the banking system. This should be addressed as a standalone issue.

The Central Bank bizarrely says that vulture funds are okay. This is so inaccurate that it frightens one to think that the Central Bank has a consumer protection function. It published a report last October which reported on a period before the mass sales of loans to vulture funds by Permanent TSB and Ulster Bank. No competent body knowing such numbers of loans were about to be sold would have chosen such a window to carry out any report on vultures' adherence to a voluntary code unless a particular finding was being sought.

There has been a banking culture of blaming customers who have been in mortgage arrears. This has radiated around banks and has led to disgraceful behaviour by banks. Banks have forgotten the part they played in destroying thousands of lives and their direct responsibility for the loss of many lives.

As a citizen, it is concerning to hear the Taoiseach and the Minister for Finance state that vultures are good and that the protections available for those in mortgage arrears carry from the bank where a loan is sold to a vulture fund. This is simply not true. The protections referred to are administrative processes via the code of conduct on mortgage arrears, CCMA. This is a voluntary code, however. The Supreme Court, in Irish Life and Permanent plc v. Dunne in 2015, has confirmed it is a voluntary code.

Furthermore, there are no mandatory solutions that must be offered under the code of conduct on mortgage arrears. The front-line experience of the IMHO is that whatever CCMA solutions may have been offered by mainstream lenders historically or are being offered at present, vulture funds simply do not offer these solutions at all. Vulture funds want to take the family home, sell the home and leave with a profit. In addition, in Stepstone Mortgage Funding Limited v. Clarke, Mr. Justice White ruled that the lender does not have to give the family a solution even if they are eligible for a solution. In this case, where the family were eligible for mortgage to rent, Mr. Justice White ruled that no such solution was required.

Those who believe banks will conform under a voluntary code have a lot to learn. Indeed, the new Irish Banking Culture Board may discover this soon. Banks only respond to severe sanctions, direct regulation and consequences. In addition, and despite it being 2019, the Central Bank cannot accurately report repossession numbers and court proceedings as the current system is fundamentally flawed.

Vulture funds are interested in assets and they price their purchase on their value and the timeframe in which they can repossess and sell on. Banks must take responsibility for contributing to cause this crisis to recklessly lending to borrowers.

Banks have restructured 116,000 family home mortgages. This is welcome. The spin from the Taoiseach and the Minister for Finance infers that the protections transfer. The truth is the protections are administrative and do not provide any solutions to be provided by lenders to customers. This is deeply concerning if the respective officials do not understand the limitations of the code of conduct on mortgage arrears.

The No Consent, No Sale Bill is an extremely important one to apply pressure on banks to do as they always should have done and create aggressive restructuring options rather than the lazy approach they have taken to date. Banks resisted every effort to write off debt, although there now is a theme of willingness to write down debt for vulture funds but not for customers.

A spectacular environment was created to welcome vultures into Ireland, including magical charitable and tax status. This showed a policy of intent. In my view, the most egregious step taken by a bank against customers recently was that of Permanent TSB in selling restructured and compliant loans to a vulture fund.

I believe that the insolvency legislation needs to be revamped. Proposals that were prepared on a multi-party basis have been submitted to the Department but have not been implemented thus far. Many vulture funds will need to be tackled using the insolvency legislation. There have been some very successful personal insolvency arrangements recently that are exceptionally good and this will be a tool in the armoury in the future. Finally, we might just see the provisions of the Act coming into their own, albeit with a service that is understaffed, under-resourced and still privatised.

By way of example, I included in the pack I provided ahead of today's hearing two cases where, through iCare Housing of which I am the voluntary CEO, we offered to buy two homes for families who were deemed eligible for mortgage to rent. Without patronising the committee, I remind members that to be eligible for mortgage to rent means one has a very low income and is eligible for social housing and that the home is modest and in line with social housing homes. In the first case, Start Mortgages refused an offer of 15% below the open-market value. In the second case, Shoreline, through Pepper, refused an offer of 8% below the open-market value. Promontoria, to which Ulster Bank sold loans, does not do mortgage to rent. Permanent TSB has sold thousands of loans to Start Mortgages, and Ulster Bank has sold thousands of loans to Promontoria. The vultures paid for these loans at a discount of 50% or perhaps 60%. They want their money and they do not care how they get it. We have a housing and homelessness crisis and the aforementioned two families will eventually transfer to emergency accommodation. This is how vultures operate. They are not a friend to families in mortgage arrears.

Going back to those who made various comments on vultures and the deal they do, and explaining that vultures bought loans cheap and therefore must do good deals, this is simply false. There is a serious question of competency around those making these vulture-friendly comments. For clarity, vultures are great in the event that one wants to surrender one's home and have one's debt written off. However, if one wants to keep one's home and stay in it, as most people do, vultures are not in the business of doing a deal, restructuring or long-term solutions.

In conclusion, vultures are bad for Irish families and incompetent commentary about their willingness to do deals adds insult to injury to the families that are affected. If one is in mortgage arrears and facing the prospect of dealing with a vulture, one is in significant risk of losing one's home. We hear vulture lovers' comments on the numbers of repossession orders granted for banks in comparison to vulture funds to defend their supportive stance. They seem to forget that banks have been at this since 2009 while vulture funds have only recently been getting started with family homes. The two aforementioned cases have now been terminated out of mortgage to rent and moved to being repossessed. This is a true reflection of the actions of vultures, not the fairy-tale version promoted by some.

The No Consent, No Sale Bill is an essential tool in helping families in mortgage arrears as we are facing an avalanche of loan sales to vultures over the coming 12 months and these families face a very uncertain future. To those who say the Bill is unconstitutional, I say we have a mechanism in the form of a court process and let the courts decide on its constitutionality.