08/12/2023
Are You Being Overcharged On Your Mortgage by a Vulture Fund?
You May Be Entitled To Compensation
Introduction
A troubling new trend is emerging for Irish homeowners whereby the “Vulture Funds” are imposing significantly higher interest rates on their customers.
If your mortgage has been bought out by one of these funds, resulting in high interest rates, you may be entitled to legal protection and compensation.
At Anthony Joyce & Co Solicitors, we've been leading the fight in Tracker Mortgage disputes and financial litigation across Ireland. Our team is dedicated to defending homeowners' rights and stands ready to assist you in taking action against these unfair financial practices.
Understanding the Challenge
In the aftermath of the financial crisis, Ireland has seen a significant rise in the activity of non-bank entities (often international investment funds) buying up distressed loans from Irish banks. These vulture funds are attempting to maximise their returns in any way possible.
One of those tactics is to charge higher variable interest rates compared to the original terms set by the “Pillar Banks” Pillar banks are the original owners of the debt e.g. Allied Irish Bank, Bank of Ireland, Ulster Bank, Permanent TSB, KBC Bank Ireland.
Since the European and US Central Bank interest rates have been rising, the vulture funds have increased their variable interest rates significantly higher than the pillar banks.
The terms and conditions of the loan allow the pillar banks to sell the loan to a third party such as a vulture fund. However, the terms of the loan cannot change. Therefore, there is a change in the terms of the loan if there is a divergence between the rates charged by the pillar banks and the vulture funds.
Legal Framework and Your Rights
We have been at the forefront of insolvency litigation in Ireland for many years. In many cases where we have been instructed, Irish banks have acknowledge their implied contractual duty to NOT apply excessive interest rates. This implied duty to the borrower must also apply to the vulture funds who have purchased the loans. In many cases it is easy to compare the current rates being applied by the pillar banks to the higher rates applied by the vulture funds. Therefore, the borrower can challenge the high variable interest rate set by the vulture funds.
Current Landscape
As of November 2023, vulture funds control a staggering 112,630 mortgages in Ireland, a substantial share of the housing market.
On top of this the rise in the vulture fund interest rates (some as high as 9% or more), has left nearly 60,000 mortgage holders trapped, leading to widespread financial distress.
A common scenario is emerging where homeowners, despite having taken measures to protect their homes by entering into a Personal Insolvency Arrangement (PIA) are now faced with high and excessive interest rates.
Taking Action
Contact Anthony Joyce & Co Solicitors for a consultation. Our expertise in financial litigation equips us to effectively assess your situation and confront any unfair financial practices. As the legal landscape continues to evolve, you don't have to face these challenges alone.
