How ‘friendly vulture fund’ could come to PTSB’s rescue

A “FRIENDLY vulture fund” could come to the rescue of the Government and Permanent TSB, both of which are under the cosh over controversial plans to sell a portfolio of home mortgages.

Debtor advocate David Hall is planning to bid for up to 4,000 of the loans, which would help relieve what has become a politically toxic mortgage loan sale.

Mr Hall is planning to buy 4,000 of the so-called “split mortgages”, which form part of the €3.7bn loan sale. These are mortgages where under-pressure homeowners have an arrangement with Permanent TSB to only pay part of the loan, with the rest “warehoused” to be paid at a later date.

These loans are regarded as non-performing by European regulators even though the householders are meeting the revised payment terms.

It is understood the split mortgages account for around €700m of the portfolio, and involve around 4,000 families.

Mr Hall (inset) is understood to be meeting London-based financiers and a UK bank tomorrow in an attempt to hammer out a funding deal that would see him bid for part of the Permanent TSB loan book.

He already has €100m in funding from AIB Corporate Finance to finance a mass mortgage-to-rent deal with banks.

Both AIB and Permanent TSB have formal arrangements in place with Mr Hall’s registered housing charity iCare to put forward homeowners for the mortgage-to-rent scheme.

However, neither iCare nor his Irish Mortgage Holders Organisation, which helps stricken mortgage holders, are regulated by the Central Bank.

A bill being promoted by Fianna Fáil’s Michael McGrath would mean only regulated entities could buy residential mortgages, but charities like iCare are likely to be exempted from this provision.

It is understood Permanent TSB is open to the idea of Mr Hall’s housing body buying the split mortgages.

A spokesman for Permanent TSB said the “loan sales process was open to any party that can demonstrate serious intent in acquiring some or all of the portfolio”. He added that those interested in acquiring the loans should contact consultants EY, which is handling the sales process.

Mr Hall said he was unable to comment at the moment, but it is understood he is keen to acquire the split mortgages.

Permanent TSB chief executive Jeremy Masding is under huge pressure over the high level of non-performing loans at the bank, but the decision to off-load 18,000 mortgages has proved hugely controversial.