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

It is important to highlight that the contractual terms and conditions of all customer mortgages and other borrowings have not changed as a result of the appointment of the special liquidators; nor will those terms and conditions change as a result of the ultimate sale of these obligations to a third party. Purchasers of mortgage loans will be required to honour the legal terms of the loan agreements. None the less, I am fully aware of the concerns raised by the IBRC mortgage holders regarding continued protection under the CCMA for those mortgage holders following the sale of the loan book by the special liquidators.

The special liquidators have, following due consideration, decided that the sale of the residential mortgage book in portfolios was the best method available to maximise market interest and return within the timelines set out in the ministerial instructions.  It was not possible for me to interfere in the sales process developed by the special liquidators to compel them to sell the residential mortgage portfolio to regulated entities as to do so would have had a negative impact on the return achievable by the special liquidators. Such action would have left me open to challenge by other creditors of the bank.

I am keenly aware that the potential loss of protection under the CCMA is a source of great concern to the mortgage holders of the bank.  The continued applicability of CCMA depends on the regulatory status of the ultimate acquirer of the IBRC portfolio, which will not be known with certainty until that process is completed next month. However, I have instructed my officials to examine the issue fully, in consultation with the Central Bank, with a view to bringing forward a solution if required. While work is ongoing in that respect, I am pleased to note that some unregulated firms have already indicated that they intend to voluntarily adopt the CCMA in order to manage acquired loans, as they believe that following the CCMA is in the ultimate best interests of both the businesses and their customers.  I fully expect that this would also be the case in the event that the IBRC portfolio was acquired by such organisations.

It is important to note that in the event that NAMA acquires the IBRC residential mortgage book it will be mindful of its legal obligations and is likely to apply best practice in relation to the CCMA. Furthermore, it has confirmed that no borrower will be in any worse a position.

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