Mr. Paul Joyce:

The Senator raises the very important point that it is commonly understood that each loan is sold on a loan-by-loan basis. In fact, it is usually a portfolio of loans, which is often quite large, that is sold. The buyers of loans do not look at the loans on a loan-by-loan basis. They buy at a particular price with a particular knock-down. In our experience, the buyer of the loan often does not have sufficient documentation, contractual or otherwise. The buyer often does not have correct information on the arrears, when they arose and so on. This problem sometimes arises where loans that are already the subject of legal proceedings or repossession proceedings in the courts are bought. In such cases, the new owners must seek to substitute themselves as the plaintiffs seeking to repossess the properties involved. It should be the case that all rights relating to a loan should transfer from the original lender to the buyer but it is not always as smooth and straightforward as that. Often, when repossession proceedings are brought by the buyer of the loan, the sworn statement that the lender must set out to ground the application does not often contain enough information about the history of the mortgage, how the arrears arose and so on.