Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

Deputy Michael McGrath spoke about the code of conduct on mortgage arrears, which is an important administrative protection, although there are doubts, which I share, about its legal enforceability and so on.

Parking that to one side, is the real issue not that the vultures can take a different approach from the banks? This is not just my belief; I have evidence to back it up. I see from the files of many of the clients who come to me that vultures in some circumstances are just not interested in making arrangements. Consider the structures that have been set up. We talked about Glenbeigh. This vehicle was set up a couple of weeks before the purchase. It is in an SPV. Promontoria Scariff DAC, which I have been talking about in the past couple of weeks, is the same. It is a company that was set up just a couple of weeks before Ulster Bank sold the portfolio of €1.6 billion. Bearing in mind the Companies Act, the directors are the same directors of 360 other companies. The problem is that loans are now with this company. I have been trying to draw attention to the sale of the €1.6 billion portfolio. It was obviously sold at a discount. The purchase price might have been in the region of €900 million. It was made up of nearly equal numbers of buy-to-let properties and family homes. There were close to 3,000 buy-to-let properties.

The loans were sold late last year. I have a letter from an individual about what is happening. Cabot Financial Ireland, the administrator on behalf of Promontoria Scariff DAC, wrote to the individual on 18 February stating it is now servicing the loan rather than Ulster Bank. Exactly seven days after receiving the letter, the individual got another stating that, further to the correspondence on 18 February 2019 regarding the transfer of the individual's mortgage account from Ulster Bank to Promontoria Scariff DAC, Cabot Financial Ireland had been appointed by Promontoria Scariff DAC as the regulated entity responsible for providing to the individual mortgage administration services and assistance regarding all the matters of mortgage. It is very nice so far. The letter then states Cabot has noted there are arrears owing on the mortgage. It specifies the amount. It is stated that, to assist the individual in clearing the arrears in full, certain payment options are available. Relevant account details are given. The letter then states, in underlined text, that in the event of failure to contact Cabot and clear the arrears in full within 30 days from the date of the letter, it will have no further option but to appoint a receiver over the secured property. That is not an individually tailored letter. Cabot has done this as a policy.

I have raised this with the Minister for Finance and the Tánaiste. The owners of thousands of buy-to-let properties may be getting these letters. I know of quite a few cases. It is now policy within Cabot not to take on any solutions or arrangements, even when there is positive equity. I have a file in my office that is related to Cabot and that concerns a property in positive equity. The house is being sold. The owner is actually in it but Cabot is not willing to sign off on it because of its policy. The policy is that it does not care, that it owns the loan and that it has the right to appoint a receiver to the full portfolio if the demand that arrears be cleared within 30 days is not met. That is what is happening.

The banks could have done the exact same thing but it is not in their interest to do so because there would be an uproar. The banks rely on us to keep deposits flowing and to take out loans. How do we square the circle? The Tánaiste was saying today that the Central Bank of Ireland and the financial institutions have a responsibility, when loans are being sold, to ensure the public good is looked after. There is no responsibility, however. Neither the Central Bank of Ireland, Cabot nor any vulture fund has responsibility to deal with the public good. The responsibility is in the contract. As referred to in the opening statement, the contract states there is a right to sell the loan without further consent.

Given the number of loans stacked up — AIB is now considering another loan sale — where will this end? My point might be long-winded but it is a matter I feel passionate about. It is not just a matter of how the vultures are treating homeowners or buy-to-let property owners. There are tenants in all the houses who will get eviction notices. Some of the families will end up in hubs and we will see the same comments from children as we heard read out by the Ombudsman today.

The Central Bank confirmed to me it is aware of the Cabot letters and is engaging with the company. It can do nothing about it, however. As said in the witnesses' opening statement, the Central Bank cannot interfere in the contractual arrangements with the client. If Cabot does this with all its buy-to-let properties, what are we going to do as a nation if over 2,600 buy-to-let property owners evict their tenants in a couple of months?