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The implications of the Pepper Finance (vulture fund mortgages) Court Ruling.

[Deleted User]

This might have consequences going down the line. Basically Tullamore district court ruled in favour of a Personal Insolvency Arrangement (PIA) for a couple with a home loan of €290,000. The court ruled that a 25 year loan payment period with a fixed interest rate of 2.5% (to remain at that for the whole 25 years) could go ahead. The interest rate before this was 5% variable.

Not surprisingly Pepper Finance didn't like the outcome as they usually employ a variable rate with their customers as do a lot of other vulture funds. What probably sunk Peppers case IMO was their refusal in court to outline how much the loan its client had acquired had cost it and how much it was costing into the future. Apparently there are 32,000 distressed mortgages in the country currently, so no doubt others will be looking on with interest at all this.

https://www.irishtimes.com/your-money/2023/05/10/road-map-for-borrowers-as-pepper-forced-to-fix-rate-for-25-years/

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BattleCorp

https://www.boards.ie/discussion/comment/120583843#Comment_120583843

You do realise that if you borrow 400/500k, you ~~should~~ are required to pay back the 400/500k + interest.

The constant harasing phone calls, letters every week etc. is probably illegal or against a code of practice somewhere, but it doesn't negate the fact that the borrower still owes the money and the company that owns the loan is entitled to collect on it. The fact that they paid less for it is immaterial.

I agree with a previous poster, houses should be repossessed here much quicker here and much more often. And for every person living in a house that should be repossessed but isn't, those paying their mortgages are paying for the non-paying people.

spaceHopper

https://www.boards.ie/discussion/comment/120584957#Comment_120584957

I never said they were in arrears

Peregrinus

https://www.boards.ie/discussion/comment/120583638#Comment_120583638

This. Nama's obligation is to get the best value for the taxpayer not loan-by-loan but for the loan book as a whole. They sell a package of loans to a vulture fund. If the more solvent borrowers were able to buy themselves out of the package, then the package would be comprised entirely of less solvent borrowers, and the vulture fund would pay much less for it, or wouldn't be interested in buying it at all.

Podge_irl

https://www.boards.ie/discussion/comment/120586734#Comment_120586734

Not to mention the administrative cost of dealing with every loan individually as opposed to as a group.

strongback

Look up "nama haircut"........smoke and mirrors....farcical.....absurd by anybodies standards

Seth Brundle

https://www.boards.ie/discussion/comment/120587494#Comment_120587494

So if NAMA was to put a tranche of say €100m worth of mortgages (a combination of both performing and non-performing loans) on the market, how much do you think they should have been sold for?

Potatoeman

https://www.boards.ie/discussion/comment/120585051#Comment_120585051

There is a reason people get mortgage insurance, though pre-existing conditions invalidate it.

Irelands problem is that the won’t pay are lumped in with the can’t pay. If someone is struggling for a short time then I don’t have issues with them making lower payments but I remember during the crash people refusing to pay as the asset was worth less. In that case reposes the property and cease assets.

The banks just pass this onto other mortgage holders through higher interest rates so they are not sticking it to the bank but other people paying their mortgage.

Nigzcurran

For what it’s worth I can’t stand people not paying a cent off their mortgage for years while they fight it out in the courts and live for free. Those people should be evicted asap and held responsible for any money owed. On the other hand I’m one of the unfortunates that has had their mortgage sold to pepper, I have it 15 years and have never missed a single payment with zero arrears and it has risen from €1000 a month in October to €1500 a month now with the interest rate at 8% and rising. I contacted them 2 months ago when the rate was less than 6% and told them my fears of falling into arrears at some stage and could they possibly fix the rate at 5% for 12 months and then 6% for the following 12 months and so on so I could guarantee I wouldn’t fall behind on the payments. They have just informed me “they have no appetite for that solution” and can’t offer any options whatsoever, they then sent me a letter telling me I can voluntarily hand the house back now and walk away! These people don’t want my mortgage paid on time, they want me falling into arrears and ending up owing a fortune in arrears and interest and eventually losing my home

fixxation

https://www.boards.ie/discussion/comment/120579812#Comment_120579812

Before the hikes, both Avant and Finance Ireland had 20/25 year terms at 2.5%, up until around June last year

https://web.archive.org/web/20220522050814/https%3A//www.avantmoney.ie/mortgages/one-mortgage

They didn't last for long... I think Finance Ireland stopped all the long term terms now.

francois

https://www.boards.ie/discussion/comment/120589130#Comment_120589130

I'd go to MABS, see what they advise

tom1ie

https://www.boards.ie/discussion/comment/120589287#Comment_120589287

Really?

We switched in 2021 and enquired what the longest term offered was- and were told 7years?

howiya

https://www.independent.ie/business/personal-finance/vulture-fund-agents-may-be-put-out-of-business-by-courts-mortgage-ruling-standard-and-poors-global-warns/a1854692359.html

Interesting article in the indo this morning re the implications.

Makes you wonder more at the poor defence offered in court by Pepper.

If it were that mission critical surely they could have backed up their point of view with figures in court.

Nigzcurran

Greed and unwillingness to help will hopefully be their downfall

thegame983

Won't somebody think of the vulture funds!

The Mulk

https://www.boards.ie/discussion/comment/120590188#Comment_120590188

I switched mid 2022 to a 20 year fixed 2.5% with Avant. Less than 50% LTV though, that was a condition. It finished around September 22 as far as I remember

howiya

https://www.boards.ie/discussion/comment/120590188#Comment_120590188

Finance Ireland only introduced their 20 yr product in May 2021 so may not have been available if you switched earlier in 2021.

[Deleted User]

https://www.boards.ie/discussion/comment/120590511#Comment_120590511

Vulture funds provide a service, whether you like it or not. They take non performing loans of the balance sheets of the pillar banks, which otherwise could inhibit the ability of those banks to lend to decent folk who want to pay their mortgage.

Just like actual vultures carry out a dirty but necessary role in the natural world, these funds are doing the work that others don't want to do.

Podge_irl

https://www.boards.ie/discussion/comment/120590570#Comment_120590570

The need for them might be less if we had a functioning repossession system.

thegame983

https://www.boards.ie/discussion/comment/120590570#Comment_120590570

I've worked for two vulture funds.

Their business model is profiting of the misery of others. I have as much sympathy for them as I do for the men and women who lost their jobs operating the gas chambers at the end of WW2.

[Deleted User]

https://www.boards.ie/discussion/comment/120590764#Comment_120590764

Why did you choose to stay in the industry and work for a 2nd VF, participating in inflicting such misery?

Count Dracula

It is really embarrassing the way some of the posters here seem to think that a vulture fund is some sort of foreign investment.

Lots of Irish stakeholders, investors and profiteers involved. Wake up.

Any assumption that Irish capitalists are not heavily invested in investment projects in Ireland is a really naive one.

thegame983

https://www.boards.ie/discussion/comment/120590895#Comment_120590895

Believe me, a little piece of me died when I got that 2nd job offer.

[Deleted User]

https://www.boards.ie/discussion/comment/120590763#Comment_120590763

Any ideas if vulture funds operate in countries that do have proper repossession systems?

Jim2007

https://www.boards.ie/discussion/comment/120580844#Comment_120580844

So you'd prefer to have the loans crystallise then???? Do you have any idea at all what would happen to those people as a consequences of such an action????