If you had asked anyone in early 2011 who Blackstone, Cerberus or Lone Star was not many would have been able to answer you correctly. Roll on the clock 5 years and chances are that most people will have heard of one if not all of the above companies. When the bottom fell out of the Irish property market and the recession hit home and all the banks foreign and domestic operating in Ireland started to see an alarming increase in non-performing loans, certain shrewd investors particularly in the USA saw an opportunity to make a lot of money in Ireland.
For the 90,000 mortgage borrowers in arrears and for thousands of business borrowers with problem debt and cash flow issues it is no longer the bank they need to worry about it is the so called vulture funds who have amassed vast tranches of Irish debt over the past 6 years. Many of the foreign banks who operated in the market during the nineties such as Bank of Scotland Ireland and Danske Bank have long since closed their doors and left having had to write off huge sums of money. The history of Anglo Irish Bank and Irish Nationwide Building Society is well documented so what happened to all the loans? To put it simply they were bundled into various portfolios such as residential, commercial, buy to lets, performing and non performing and subsequently sold to the above funds at a substantial discount. They are also showing no signs of slowing down when it comes to acquisitions so more and more Irish debtors are going to learn what it means to owe money to a vulture fund.
At Opes Wealth Trust we have been dealing with these funds for a number of years now and have considerable experience in negotiating with them on behalf of our clients. We have been successful in negotiating significant write downs on behalf of our clients. In order to assist our clients reach a suitable long term agreement with the various vulture funds there are no hard and fast rules when dealing with vulture funds as no two cases are exactly the same, every case has its own nuances. The following are a few pointers to bear in mind if you have been advised that your loan has been sold on to a third party.
- When you first receive the letter advising you that your loan has been sold don’t panic. Nothing is going to happen immediately. You should gather all the relevant documents regarding your loan including details of your previous negotiations with the original bank.
- You will be advised in the letter the date your loan was sold and who the new owners are and in most cases the new payment details for the new owner’s bank accounts and their contact details.
- Get Professional Advice. Most people do not know what they are dealing with. Most of these funds do not interact directly with their customers so they appoint servicing agents to act for them. If you get a letter from Pepper Asset Servicing or Capita Asset Servicing you are dealing with a servicing agent. The servicing agent is a buffer between the client and the vulture fund. This can make the process slower and at times quite frustrating.
- Debt Management Firms such as Opes Wealth Trust deal with these firms on a daily basis and as a result are on a first name basis with most of their staff. We have an extensive knowledge of their processes and requirements and most importantly will be in a position to quickly gauge what type of a deal if any may be possible given our previous experiences to date. You will pay an agreed fee to any Debt Management Firm you employ to act for you, however in the long run they will save you money and time.
It’s not all bad news however; vulture funds by their very nature are very commercial and pragmatic. The lifespan of these funds tends to be around three to five years so they are literally looking to make as big a profit as possible in a relatively short period of time. Whilst there is no doubt they can be ruthless on the other hand they are prepared to write down debt and if a deal is possible they will do it quicker than the domestic banks. The other issue to bear in mind is that just because your loan has been sold it does not mean that your rights under the Consumer Protection Code or Personal Insolvency Legislation have in any way been diluted in particular where the family home is concerned they have not.
So in conclusion no one is saying that dealing with a vulture fund is going to be a ‘bed of roses’ you need to know what to expect and you need to go through the process with the assistance of a specialist who can get you through the process and out the far side relatively unscathed. At Opes Wealth Trust we have an excellent track record of doing just that so if you have recently received a letter regarding your loan been sold on to such a fund just pick up the phone and one of our experienced advisers will be delighted to meet with you and carry out a full review of your case.