As housing prices in Ireland continue to rise, many homeowners are struggling to keep up with their mortgage payments. Unfortunately, this has created an opportunity for vulture funds to swoop in and take control of these mortgages. New Central Bank figures show that these funds are becoming more prevalent in the Irish mortgage market, posing a threat to homeowners who are struggling to keep their homes. In this article, we’ll take a closer look at this growing trend and what it means for the future of the Irish housing market.
New figures from the Central Bank reveal that vulture funds and their agents have increased their hold over residential mortgages in arrears that are over a year old. In Q4 of 2022, non-bank entities controlled 77% of all residential mortgages in this category, reflecting a 3% increase from Q3. Meanwhile, the number of residential mortgages in short-term arrears rose to 2,326, marking the first spike in over a decade. However, the number of accounts in long-term arrears decreased, with almost 47,000 accounts in such straits by December. Nearly 90% of those whose loans had been restructured continued to make agreed repayments, although this figure represents a slight decline from the previous quarter. As ECB interest rates rose by 3.5% since last summer, Bank of Ireland’s fixed-rate mortgages will increase by 0.5%, affecting both new and existing customers. The move, the second rate increase this year, will raise a first-time buyer’s monthly payment by €78 or €936 per year.
As the Central Bank figures clearly indicate, vulture funds are becoming increasingly dominant in the Irish mortgage market, particularly when it comes to properties in arrears. This trend is understandably worrying for many homeowners struggling to keep up with their payments, but it’s important to remember that not all vulture funds are the same. Some are more willing to work with distressed borrowers to find a mutually beneficial solution, while others prioritize profits above all else.
Regardless of which type of fund you’re dealing with, though, it’s crucial to stay informed about your rights and options as a homeowner. This may involve seeking legal counsel, consulting with a financial advisor, or simply staying up-to-date with the latest developments in the market. By doing so, you can help protect yourself from any unfair or predatory practices and ensure that you’re able to stay in your home for as long as possible.
