Catherine Murphy (Kildare North, Independent)
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13. To ask the Minister for Finance if, in respect of the sale of the former Irish Bank Resolution Corporation loan books, he will indicate if the Special Liquidator has considered sale of individual mortgages to their corresponding borrowers so that they may refinance their loans themselves; the details of any recent agreed sales of loan books; at what price and which institutions the sale was agreed with; and if he will make a statement on the matter. [8362/14]

Joe Higgins (Dublin West, Socialist Party)
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38. To ask the Minister for Finance his views on passing on a write-down to mortgage customers with loans formerly with the Irish Nationwide Building Society rather than sell the loans on the international market. [8275/14]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 13 and 38 together.

There is an obligation on the Special Liquidators to ensure that maximum value is extracted from the loan sales process for the benefit of all the creditors of IBRC including the State. The sales process plan and timeline for the sale of the residential mortgage portfolio has been developed following professional advice and in light of requirements for a robust and credible sales process in that context. The Special Liquidators have given significant consideration to and have sought independent advice from PWC in relation to how the residential mortgage portfolio is to be dealt with. Following that independent advice, the Special Liquidators have decided that the residential mortgage would be sub-divided into four tranches with a view to maximising market interest and return within the timelines set out in the Ministerial Instructions. I am advised that it is for this reason that the Special Liquidators have decided not to accept any bids from individual mortgage holders.

Neither I nor my officials had any role in the development of the sales process plan for the residential mortgage book and given the Special Liquidators obligations to ensure that maximum value is obtained for all creditors of the bank it is not possible for me to interfere in such decisions. For example the valuation price for performing mortgages is likely to be much higher than some of the discounts suggested in recent commentary, it would not be possible for me to direct the Special Liquidators to dispose of these loans to individual mortgage holders at such discounts as to do so would erode significant value for creditors and leave me open to challenge.

The valuation process for the residential mortgage portfolio was completed on 11 September 2013 and the sales process commenced on 14 October 2013. Following receipt of indicative bids, a reduced number of bidders were progressed to Phase 2 of the sales process which launched on 29 November 2013. The Special Liquidators expect to finalise the sale of these loans in March 2014.

For operational reasons, IBRC loan assets have been grouped into a number of portfolios which have been ascribed project names Evergreen, Sand, Rock and Salt, Stone and Pebble; In total, there are 15,734 Borrower Groups comprising 24,632 loans for sale across the 7 portfolios. In total only 33 of these Borrower Groups, representing 0.2% of total Borrower Groups were/ are being offered for sale on a stand-alone basis.

The first portfolio sale brought to the market by the Special Liquidators was concluded successfully in early December where the Evergreen portfolio achieved sales to third parties of 84% of the total portfolios at values above the independent valuations. The sales processes for the Sand, Rock, Salt, Stone and Pebble portfolios are all on going and it is therefore too early to comment on what percentage of each portfolio will be sold to third parties or will transfer to NAMA at the valuation price. However, the Special Liquidators are pleased with the level of interest shown by investors in the portfolios to date.

The Special Liquidators will not be providing details of the discount applied to loan assets to arrive at the valuation price or the price at which the loan books are subsequently sold at as this information is commercially sensitive information which could potentially have a detrimental impact on asset recovery from the impending sale process.