Arizun drops link with New Beginning
...but still plans mortgage-to-rent scheme
A VULTURE-style fund planning a €2billion mortgage-to-rent scheme for Ireland has distanced itself from New Beginning after months of controversy following a data breach involving thousands of struggling homeowners.
Sources familiar with the proposed deal have told the MoS that Arizun plans to disassociate itself from the mortgage campaign group.
But in a move which may provoke further controversy, Ross Maguire, the acting chief executive of New Beginning, will continue to work with the Arizun fund in a personal capacity even if New Beginning does not.
Mr Maguire confirmed this weekend that he will push ahead with the project regardless of whether his high-profile debt campaign group has a role.
It follows revelations in this paper that New Beginning supplied the personal financial details of thousands of strug- gling borrowers who had approached them for help to the fund.
New Beginning was paid €20,000 on the day the information was sent to Arizun. The breach remains the focus of a continuing investigation by the Office of the Data Protection Commissioner.
Arizun needed the details to assess the profitability of its plan to buy 15,000 distressed mortgages from Irish banks before renting the homes back to the families living there.
The details provided – which included mortgage arrears, home value, family income and number of dependants – will have helped Arizun to calculate how much it should offer banks to take over the distressed mortgages as well as how much the families could afford to pay out in rent.
Internal Arizun and New Beginning correspondence about the scheme revealed that New Beginning’s initial contract with Arizun was for a three-month period, but letters of assurance from Arizun revealed that New Beginning stood to gain as much as €5m if the deal went ahead. New Beginning apologised for the breach but only reported it to the ODPC a day after the MoS informed the group of an impending article about the matter.
Internal New Beginning communications revealed that New Beginning had doubts about the viability of the scheme – but saw the partnership as an opportunity for good publicity and profit.
Now the Arizun fund is seeking to disassociate itself from New Beginning altogether – the MoS understands that there is no prospect of an ongoing partnership, although Arizun is continuing its efforts to negotiate with banks and Government.
Asked about the potential split last night, Mr Maguire said: ‘Decisions on partnerships [are] still to be made but either way I am personally leading the project.’
Arizun said: ‘We have not yet made a final decision on whether we need any partnerships for our upcoming programme or indeed who those possible partners might be,’ said Arizun’s US-born director, John McDaniel. ‘I can confirm that Ross is a member of the team that is working on our Irish project,’ he added.
‘I am personally leading the project’