Kerry resident tells of terror inflicted by vulture funds as hundreds in the county have mortgages resold

By Alastair Tibbs, The Kerryman

A Kerry local has spoken out about the terror inflicted by so-called vulture funds as new data shows thousands in the county have mortgages with shadowy financial companies.

The local, who wished to remain anonymous, is unable to move house or take out any sort of loan, and said the debt she has feels like a “noose around my neck”.

It is estimated around 600 people in Kerry have had their mortgages sold to vulture funds, with multiple dozens currently in court proceedings, according to resold mortgage campaigners Mis-Selling.ie.

A vulture fund is a type of hedge fund which invests in highly risky debt that is very likely to default, many making profit on mortgages by using psychological tactics to scare debtors into paying their loans.

As multi-national companies with little regulatory oversight, funds can set mortgage interest rates far higher than a recognised bank.

Approximately 200,000 people in Ireland have their mortgages with these corporations, amounting to around 15% of the total mortgage population. Many of these debtors bought property in the lead up to the 2008 financial crisis and watched their home value plummet in the aftermath.

The Kerryman spoke to a Kerry resident who had their mortgage with Bank of Scotland sold when the firm left the country in 2012. They can no longer afford the inflated interest payments and are living with a monumental debt burden.

“This is an absolute noose around my neck. I can’t pay for it, so I’m in a complete bind,” they said.

“Its kind of like a prison sentence without being in prison. You can’t move, you can’t get credits, you can’t make decisions. I’m just not one of those people that has a second home in Bulgaria and decided I’m going to take the mickey and mess around.

“This was my family home, my children grew up here and my mother lived her with me until she passed away. This was their home, now its literally like a holding cell. I can’t see how it’s going to end up.”

The Kerry local’s experience of funds’ dirty tactics used to harass homeowners is sadly typical.

Every month they receive a threatening letter, often demanding repossession, with extra post purposefully arriving on festive occasions such as Christmas Eve, Saint Stevens Day and other public holidays.

“It’s just all the covert bullying that you don’t see. A lot of them come from faceless call centres and then some of them are letters that are terrifying because you’re trying to cope,” they said.

“I’m one of the lucky ones. Can you imagine the people that are bullied that are not articulate or they can’t communicate, or they don’t understand the process, and they are getting these letters through the door.”

Ben Hoey, director of the Mis-Selling campaign and former banker, has over 500 clients with distressed mortgages and said he sees people in great distress daily.

He estimates that nearly all the housing debt is within the age cohort of 50 to 75, and thus the struggle will only get harder for most.

“I see an awful lot of stress, its dreadful. People just dreading the envelopes coming through. Some of them don’t even open them, just bury their head in the sand,” said Mr Hoey.

“The more stressed individuals have entered their 60s and are staring at their retirement and do not know how they’re going to pay this. Obviously, their resilience breaks down when they get older. There’s a ticking time-bomb here of people with mental health, getting old and their resilience breaking down.”

Mr Hoey works to apply EU laws which, in theory, obligate the Irish government to inspect mortgages for unfair terms. In practice however, they can be tough to implement as vulture funds have won cases in Ireland in the past, and now use the existing case law to their advantage.

“I’m still battling the Vulture Funds, but the real enemy now is our own legal establishment. Under EU law, courts across the EU - including Ireland - are obliged to examine mortgage contracts for unfair terms on their own motion before granting possession,” said Mr Hoey.

“This safeguard exists to protect consumers from imbalance and lack of transparency in loan contracts. Yet, in practice, Irish repossession cases were often processed without that EU-mandated review.”

Kerry councillor Podge Foley, who has represented someone against vulture funds in court, said the estimate for the number of people in Kerry with vulture fund-held mortgages was “unbelievable”.

“These people have worked all their lives. There’s very few people who have taken the mickey,” he said.

“This goes back to time of the landlords. This is the current absent landlords case where our people are being moved off the land.”

“Nobody should be able to come to Ireland and treat our citizens like this. Its unfair, its unjust, it’s the way bullies operate. So as quickly as possible…I don’t care if they leave the county with nothing but get them out straight away.”

“During a homeless epidemic, a child poverty epidemic and a housing crisis, they are feeding like rats.”