Call to assist mortgage holders being 'trapped' in vulture funds

Cllr Vinny McCormack is calling for action in the forthcoming budget to assist families whose mortgages are currently held by vulture funds.

Cllr McCormack said at a recent meeting of the Athlone-Moate Municipal District that the mortgage situation for families who have their mortgages through investment funds or vulture funds is reaching an “unsustainable point.”

“The Central Bank are reporting increasing numbers of these mortgages, which had previously been on track, now going into substantial arrears.”

The Fianna Fáil councillor has requested that the members urgently write to the Minister for Finance asking for the issues outlined to be dealt with and also asking for immediate actions to be taken in the context of Budget 2024 to assist these borrowers and families.

Cllr McCormack suggested implementing an interest rate ceiling, a tax relief for borrowers paying in excess of 7pc interest and other options which, he said, would help to guard against a mortgage crisis and ensure that families can meet the monthly repayment on their home.

He said: “We need parity across the mortgage market and at present we have tens of thousands of families around our country 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, 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.”

Cllr McCormack added that there is an urgent onus on Government and on the Central Bank to step in and assist.

Cllr Tom Farrell supported the motion and said the people trapped in the vulture funds “have no choice.”

Cllr Liam McDaniel added: “There’s an increasing number of people out there falling into the trap and now they’re trapped in a mortgage.”

Cllr Louise Heavin said that she wasn't aware that people couldn't move from vulture funds and that a regulation must be put in place to deal with this. The Green Party councillor added: “It's scandalous that people are in this situation in the first instance because I think if we’re offering financial assistance to people on tracker mortgages we need to offer financial assistance to people on other mortgages."

Cllr Heavin also supported Cllr McCormack's proposal of a 7% interest rate and said that anything above that is “getting into unrealistic monthly payments.”

In the past six months some mortgage holders whose accounts were sold to vulture funds have seen their interest rates jump to between 8.5% and 10%, Cllr McCormack said citing one family who had seen their monthly repayment go from €1300 to just over €1800 since February of this year.

Currently, these vulture funds do not offer a fixed rate option, he said.