ronan fagan
As the cost of living remains a pertinent issue for many constituents within the Athlone-Moate District, local Fianna Fáil councillor, Vinny McCormack, voiced his tracker mortgage concerns during the most recent sitting of elected representatives on Monday afternoon.
Seeking the support of his councillor colleagues, Cllr McCormack called upon the local authority executive to pen a letter to the Minister for Finance calling for budgetary action to assist tracker mortgage holders and families whose mortgages are currently held by vulture funds and who have felt the full force of recent interest rate increases.
“Most of the members in this chamber will be familiar with families who are currently struggling to meet rising interest rates on their mortgages.
“The mortgage situation for families who have their mortgages through investment or vulture funds is fast reaching an unsustainable point. The central bank are reporting increasing numbers of these mortgages, which had previously been on track are now going into substantial arrears,” Cllr McCormack asserted.
Addressing the chamber, the Fianna Fáil councillor noted that mass defaults on such mortgage repayments would have a detrimental impact on the country’s banking system.
“This cohort of mortgages makes up roughly 16% of the current market in Ireland and if there were mass defaults on these loans it would have a huge impact on the entire banking system in the country.
“In the past six months mortgage holders whose accounts were sold to vulture funds have seen their interest rates jump to between 8.5% and 10%. To put this into real context I am aware of one particular family who have seen their monthly repayment go from €1300 to just over €1800 since February of this year.
“While the regular banks have absorbed some of the recent increases on behalf of mortgage customers, these vulture funds have immediately passed on every increase and as a result there are currently over 32,000 of these accounts in substantial arrears and it is clear that this number will only increase with the latest rate increases announced by the ECB.
“Moving institution is not an option for these customers and they are effectively vulture fund prisoners, forced to fight in keeping up repayments on loans which are rapidly increasing beyond their means,” Cllr McCormack added.
The councillor acknowledged that a number of debt restructuring experts have warned that borrowers who were barely coping are now “being pushed over the edge”.
“Currently, these vulture funds do not offer a fixed rate option. This needs to be resolved urgently and we need to ensure that all lenders are obliged to offer a full suite of loans, including fixed rate options.
“We must also ensure that vulture fund mortgage holders are not mortgage prisoners going forward. Presently, it is not possible to move mortgage from a vulture fund if you have been in arrears or if you had the payments schedule restructured.
“I would ask that we urgently write to the Minister for Finance asking for the issues outlined to be dealt and seek immediate actions to be taken in the context of Budget 2024 assisting these borrowers and families. Such actions could include an interest rate ceiling, tax relief for borrowers paying in excess of 7% interest and other options which would help to guard against a mortgage crisis and ensure that families can meet the monthly repayment on their home in a sustainable way.
“We need parity across the mortgage market and at present we have an inordinate number of families both locally and nationally not receiving this parity. At the end of the day these are families who are trying their best to keep up with their payments, some ended up trapped with vulture funds as their own means changed and they fell in to arrears, while others ended up in this situation when their own bank left the Irish market and their fully up to date loan was sold on without their knowledge or agreement.
“In both circumstances there is an urgent onus on Government, and on the central bank to step in and assist,” Cllr McCormack concluded.
