Minister 'deeply conscious' of concern surrounding Permanent TSB mortgage sales
The Finance Minister says he is deeply conscious of the worry and concern surrounding the sale of thousands of mortgages by Permanent TSB.
The bank has revealed that the majority of the 18,000 belong to private homeowners.
Paschal Donohoe is meeting Fianna Fáil’s finance spokesman Michael McGrath this afternoon amid concerns the mortgages will be sold to vulture funds.
The party wants to bring in legislation which would see more regulation.
Minister Donohoe says he wants to ensure those affected are fully protected.
"I need to ensure that Permanent TSB has a secure future in Irish banking which I believe it does," said Mr Donohoe.
"To do that, they need to - at the request of the Regulator - address issues that are there.
"What I will aim to do is build on the legal and regulatory environment that we have to make sure that everybody is treated as fairly as possible."
Earlier, Permanent TSB issued a statement defending its plan to sell the mortgages.
The bank says the loans are typically owned by customers who have not engaged with them.
They said: "The sale of non-performing loans to third parties is common in the UK and other European countries.
"In the UK there are a number of examples since the current crisis began of the UK Government disposing of homeloans to third-party funds."
A buyer for the €3.7bn loan book has yet to be found, but Fianna Fáil is worried it could be sold to a vulture fund is trying to block the sale.
The statement from Permanent TSB reads: "The level of non-performing loans (NPL) in certain jurisdictions has been an area of concern for European authorities.
"The lead regulators of the European Banking sector, the Single Supervisory Mechanism (known as the SSM) in Frankfurt, have set out clear expectations that all European banks with above average Non-Performing Loan (NPL) ratios will develop and implement measures to reduce significantly their NPL ratios as a matter of urgency.
"Permanent TSB (the Bank) is not alone amongst banks in the Eurozone or in Ireland in having to deal with a significant NPL issue.
"The regulators in this area are clear that in dealing with this issue, the Bank must address all NPLs, whether restructured or not."
The bank says it is taking a wide range of approaches to the issue.
They said: "As part of the Bank’s response to this issue, it has utilised a range of innovative approaches. For example, agreements have been concluded with over 1,200 mortgage holders under which the Bank has agreed to write off outstanding debts which are owed to the Bank and linked to Investment Properties once the mortgage holders surrendered those properties to the Bank.
"Arrangements have also been put in place to cater for up to 1,000 mortgage customers who may be eligible to avail of the enhanced Mortgage To Rent (MTR) scheme. Under the MTR scheme, qualifying customers can remain in their homes with all debts to the bank secured by their property, written off after its sale to an Approved Housing Body."
