Ireland: No Longer Homes – Only (Bank) Assets Now?

by séamas carraher, global rights | 3rd August 2018 4:03 pm

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Reducing non-performing loans is necessary step for us to take to complete the rebuilding of Permanent TSB as a viable, competitive lender.” Permanent TSB chief executive Jeremy Masding[1]


That’s news to me today.” Mr. Leo Varadkar (Irish Taoiseach[2])


It is reprehensible that Irish families have been thrown to vultures by a bank which only exists from State support and funds from the taxpayer.” David Hall, chief executive (Irish Mortgage Holders’ Organisation)[3]


The representation of private interests … abolishes all natural and spiritual distinctions by enthroning in their stead the immoral, irrational and soulless abstraction of a particular material object and a particular consciousness which is slavishly subordinated to this object.” Karl Marx, On the Thefts of Wood, in Rheinische Zeitung[4] (1842)


Racing into the 21st century on the back of boom and bust, from money being thrown around the place – (to those with hands, if not claws, quick enough or sharp enough to grasp it) – to collapse, austerity, endless people waiting in endless hospital queues here (and dying in the process), more poverty (what’s new?) and homelessness; once again now the sharp teeth of 21st century “development”, aka “capitalism”, rears its usually covert head.


1st August 2018: the Irish Taoiseach (Prime Minister) opened the holiday season with his (at least) honest “haven’t a clue what you are talking about” on the 8am news (RTE Radio One’s Morning Ireland programme) when media reports questioned the announcement that one of Ireland’s massively-taxpayer-bailed-out-banks, the Irish Permanent (now Permanent TSB[5]) “following a competitive sale process” have now moved ahead with the sale of €1.3 billion of householders’ mortgages they hold to one of the, surely-now-notorious, vulture fund companies: the Texas-based US private equity giant Lone Star – through its “retail credit firm Start Mortgages DAC (“Start Mortgages”), supported by LSF Irish Holdings 97 DAC, both affiliates of the Lone Star Funds.” (Permanent TSB Group[6])


Permanent TSB, which, since the post-2008 bank crash[7] is 75 per cent State owned, said earlier in the week that it had agreed to sell loans secured on 10,700 properties (of which about 7,400 are private homes), where borrowers have fallen behind on repayments, to Start Mortgages.


Vultures (the scavenging bird of prey), as anyone who has been to the Tibetan highlands may know[8], play a positive role, like most non-human beings, in the natural cycle of life on our largely traumatised planet (since the arrival of civilization)… not so, unfortunately, their human-animal-relations, ourselves, who have a tendency to project, our own generally dirty deeds outside of ourselves…


Vulture Funds


Thus  “vulture” funds[9] have come to be recognised (despised?) as a relatively recent feature in the ongoing capitalist ‘revolution’ that has replaced the 20th century one where some of us dreamed of justice and a type of democracy that would bring well-being and respect to all on this small planet.


“A vulture fund is a hedge fund, private equity fund or distressed debt fund, that invests in debt considered to be very weak or in default, known as distressed securities. Investors in the fund profit by buying debt at a discounted price on a secondary market and then using numerous methods to gain a larger amount than the purchasing price. Debtors include companies, countries, and individuals.


Vulture funds have had success in bringing attachment and recovery actions against sovereign debtor governments, usually settling with them before realizing the attachments in forced sales. Settlements typically are made at a discount in hard or local currency or in the form of new debt issuance.” (Wikipedia[10])


“Vulture funds”, as a name for the debt collecting/scavenging of distressed debt have been around for a while, maybe since the 1950’s. However the practice apparently started to become profitable to international financial companies in the 1980’s with the development of debt rescheduling scenarios in response to the widespread financial and economic crisis and bankruptcy of nation states particularly in Latin America[11].


“According to the former United Nations independent expert on the effects of foreign debt and other related financial obligations of States on the full enjoyment of all human rights, the term ‘vulture funds’ “is used to describe private commercial entities that acquire, either by purchase, assignments or some other form of transaction, defaulted or distressed debts, and sometimes actual court judgments, with the aim of achieving higher returns”.


The African Development Bank considers ‘vulture funds’ as “entities that purchase distressed debt on the secondary market, where it trades significantly below its face value, and then seek to recover the full amount, often through litigation”.


Basically, vulture funds are hedge funds whose modus operandi focuses on three main steps including: (1) purchasing distressed debt on the secondary market at deep discounts far less than its face value, (2) refusing to participate in restructuring agreements with the indebted state, and (3) pursuing full value of the debt often at face value plus interest, arrears and penalties, including through litigation, seizure of assets, or penalties.” (Third World Network[12])


…Enough said?


Alongside the collapse of numerous economies – followed by crisis, “austerity”  (meaning the slashing of essential public services, not a tough tax regime imposed on wealthy individuals and corporations), restructuring, usually overseen by the IMF or World Bank of whom The Guardian[13] said recently: “…that the policies they advocated during the heyday of the so-called Washington consensus – austerity, privatisation and financial liberalisation – have contributed to weak and unequal growth, with all the political discontent that this has caused…”, etcetera – the 20th century ended in one unholy catastrophe; for the forces of social change, of course.


Not so – despite over a century of revolt, rebellion, uprising and revolution – for those whose goal was to amass enormous wealth. Which they achieved.


Thus the world we live in now is organized in such a way, as Oxfam and others point out, that:[14]








“The combined wealth of the world’s 2,754 billionaires is now $9.2 trillion, an amount that has doubled in the past six years, and increased tenfold since the beginning of this century. The magnitude of this wealth is difficult to conceive. The top six billionaires own as much as the lower half of the entire world’s population.” Jeremy Lent tells us[15]…


In addition The Credit Suisse Research Institute’s Global Wealth Report also informed us[16] in 2017:





Compare that to:



So into this unholy mess comes:


“Many debt collectors … buying (for low prices) defaulted government bonds owed  specifically by a poor country participating in a global debt reduction program – with  the sole intent of collecting the entire amount, plus substantial interest and fees, once  that nation has more available resources…” (New York Law School International Review 2010[17])


Meanwhile back at the ranch


During the Irish Banking crisis[18] the now Permanent TSB bank was baled out to the tune of 4 billion euros and now, incredibly enough to one not immune to the contradictions of high finance, currently only owning 25% of itself (this State of the “men of property” owning the majority 75% share) has recently packaged over 11,000 loans worth an estimated €1.3 billion – part of the package for Start Mortgages – in reality – the “vulture” fund Lone Star.


This €1.3 billion is a cool discount to the €2.1bn actually owed on the mortgages. Nice work if you can get it…(especially when you realise that the minimum wage here in Ireland currently pays €9.55 an hour and many other employments pay rates moving upwards at a steadily slow pace)…


The bank has argued that the European Central Bank (ECB) is urging it to address the deficits on its balance sheet – “PTSB is committed to delivering on its NPL reduction strategy in line with the European average as per regulatory guidelines whilst protecting capital.” This same Central Bank (ECB) might do better to encourage national institutions similarly to address the deficits in their citizens basic needs, like homelessness, lack of medical care or the increasing gap between those who possess wealth (and assets) and the rest of us.


But of course, as this would cost “the wealthy” money and might also reduce the steadily increasing gap between rich and poor in Europe and globally… we might be waiting?


 Ireland’s Ongoing Housing Crisis


In the midst of a housing crisis with homeless figures now including families and children spiraling, this sale of distressed debt to the so called “vultures” is set to include 7,400 of  “owner-occupier mortgages”.


PTSB said of the 7,400 owner-occupier mortgages, 2,500 of those accounts are classified as ‘not co-operating’, adding a further 3,850 accounts have either ‘refused treatments’ or ‘the account has failed to operate in line with the agreed ‘Treatment’.’” (RTE[19])


Earlier in 2018, following other media reports the bank had to back down when it was pointed out that despite its own claims a significant number of its house loans planned at that time for a similar sale were in fact loans that were “performing”,  that is where borrowers were meeting the terms of their contracts to repay outstanding amounts.


The bank backed down[20]. Public opinion, or public criticism, just about, still amounted to something. No longer, apparently.


With all the sharks circling the sinking ship since 2008 and with all the assets continuing to be vacuumed up,  it is estimated that this package is one of the largest to date to transfer assets (not homes, houses, dwelling, lives) to this almost-or-should-really-be fictitious financial empire that has no flag, no borders, and obviously little heart and soul (to those of us with compassion or an interest in music)…


Media Quotes


The Taoiseach, Leo Varadkar, under the spotlight briefly, promised[21] the current Fine Gael – Independents – ( + Fianna Fáil) coalition regime would address people’s concerns:


Legislation that is coming in the next session will make sure that vulture funds are regulated, much more so than they are now – or investment funds, whatever you want to call them – so that those consumer protections exist,” he said.


Probably after a lot of these people find themselves sleeping by the side of the road..?


PTSB Chief Executive Jeremy Masding[1]:


“…protections which exist for homeowners transfer with a loan when it is sold. Mr Masding said that “Customers will continue to be afforded the protection of existing regulatory protections after the transfer….


PTSB will now begin contacting relevant customers to inform them that their loan(s) are being transferred, and to confirm that existing legal and regulatory protections continue to remain in place.


Fianna Fáil Spokesperson on Finance Michael McGrath said[22]:


It would be much better if Permanent TSB dealt with the loans itself and made case by case decisions involving restructuring the loans, writing off debt in some cases and only taking enforcement action as a last resort.


While it is a positive at least that Start Mortgages is a regulated entity, there will be understandable concern among affected borrowers given its background as a sub-prime lender and the fact that it is owned by giant US vulture fund Lone Star.”


The Taoiseach, Leo Varadkar, stating the obvious, concluded:


Without stating the obvious, our view when it comes to the sale of these loan books is always to seek an assurance and try to make sure those people who are paying their mortgages and those people who are making a genuine effort to repay their mortgage aren’t adversely affected by it in any way. It’s something I want to talk to Minister [for Finance Paschal] Donohoe about.


This, we have to see.


Irish Government Failure


On August 1, the mainstream media reported that the Irish Mortgage Holders Organisation has condemned the sale[23] of the loans calling it a “dark day” in recognition of the 7,400 homes and 3,300 buy-to-lets sold to Start Mortgages. They also pointed out that the sale, Project Glas had “raised fury from political figures and mortgage campaigners when mooted earlier this year.”


Mr. David Hall:[24]


Five years ago, I was with a woman, whose husband had died in tragic circumstances and with young children, desperate to keep her home,” he said. “She was deemed non co-operative by Permanent TSB. It is an abject failure to deal with loans over the years. Vulture funds don’t do solutions for people, so you can be sure there will soon enough be double the amount of families in emergency accommodation because of sales like this.”


Having said all that, at the same time as the announcement of the bank’s outrageous sale, the Sunday Business Post quoted once Independent, now Fianna Fáil, politician Stephen Donnelly in a letter to the Minister for Finance where he pointed out[25] that vulture funds are now putting in place new strategies to avoid tax and regulation. “The funds have moved substantial sums from the controversial Section 110 companies and into other entities called L-QIAIFs (loan-originating qualifying alternative investment funds). These do not file public accounts.”


The Future?


What does the future hold for our young people currently paying exorbitant rents to stay working in an environment where property prices now prohibit them from ever owning their own home? And as for the State’s social housing programme…how unfashionable, in these neo-liberal[26] times to be expecting the state to do anything other than collect tax to pay for their own exorbitant salaries, expenses and pensions…as well as bank and insurance company bail-outs, when needed, of course?


We all know how disreputable Marx and Engels have become. But waking early at the beginning of the holiday season on a day off from an averagely paid job (where the prospect of buying or renting in the private housing market would be ridiculous…) one can well imagine the anger that may have launched the young Marx on witnessing his fellow countrymen and women being prosecuted for gathering firewood (“In the year 1842-43, as editor of the Rheinische Zeitung, I first found myself in the embarrassing position of having to discuss what is known as material interests. The deliberations of the Rhenish Landtag on the thefts of firewood and the division of landed property; the official polemic started by Herr von Schaper, then Oberprasident of the Rhine Province, against the Rheinische Zeitung about the condition of the Moselle peasantry, and finally the debates on free trade and protective tariffs caused me in the first instance to turn my attention to economic questions.” (A Contribution to a Critique of Political Economy[27])… Property, in that case, did turn out to be theft. The theft of kindling!


Closer to home: to quote, once again, Theobald Wolfe Tone – one of the founding members of the United Irishmen, and regarded as the father of Irish republicanism and leader of the 1798 Irish Rebellion against the English colonisers, hero of course, (when it suits) to our own aspiring ‘bourgeoisie’, in what, unfortunately so far (as Murray Bookchin pointed out in 1969[28]) it seems most revolutions have been up to now – the transfer of power (and property) from one group in society to another and to heck with the rest, majority or minority – still, lest we forget, as we once again learn another lesson from this artificial System that currently organises our lives: “If the men of property will not support us, they must fall. Our strength shall come from that great and respectable class, the men of no property.”


…Meaning, back then – other choices were possible, and eventually became inevitable.


As for now, time (for those of us with a roof over our heads, however temporarily)  to go back to the drawing board?


Only by imagining and desiring another world, other social systems and relationships, in fact, the change becomes concrete. Only by recovering forgotten and subtracted vocabularies, by rebuilding proper syntax and new grammars, subversion becomes viable.” (Sergio Segio)[29]


séamas carraher



Dublin’s St. Stephens Green, June 2017

By, séamas carraher

Attribution-NonCommercial-ShareAlike (CC BY-NC-SA)


Global Wealth Report 2017 – Credit Suisse



10,000 March In Dublin For Housing (April 2018)[30]


Ireland’s Housing Crisis #8[31]


Ireland’s Housing Crisis 2017: A Crisis to Let.[32]


Richard Boyd Barrett questions the Taoiseach

about the housing crisis (February 2018)[33]

  1. Jeremy Masding:
  2. Irish Taoiseach:
  3. Irish Mortgage Holders’ Organisation):
  4. On the Thefts of Wood, in Rheinische Zeitung:
  5. Permanent TSB:
  6. Permanent TSB Group:
  7. bank crash:
  8. may know:
  9. “vulture” funds:
  10. Wikipedia:
  11. Latin America:
  12. Third World Network:
  13. The Guardian:
  14. point out, that::
  15. tells us:
  16. informed us:
  17. International Review 2010:
  18. Irish Banking crisis:
  19. RTE:
  20. backed down:
  21. promised:
  22. said:
  23. condemned the sale:
  24. Mr. David Hall::
  25. pointed out:
  26. neo-liberal:
  27. A Contribution to a Critique of Political Economy:
  28. pointed out in 1969:
  29. Sergio Segio):

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