VULTURE FUNDS TO SWOOP AFTER ELECTION
The Sunday Business Post ran a story claiming that vulture funds who bought up the loan books of Irish financial institutions are likely to step up pressure for payment after the general election.
Councillor Brid Smith of People Before Profit said,
‘The report in the Sunday Business Post is a terrible warning of what is to come. Far from years where we enjoy a new ‘fiscal space’ there is more economic turmoil ahead.
‘US vulture funds were encouraged to come into this country to buy up debt at incredibly low prices. The debts of both mortgage holders and small business enterprises became another opportunity for profit making.
‘A Freedom of Information Act request showed that government officials wrote to companies like Apollo, Lone Star and Kennedy Wilson inviting them to buy up distressed loans. Apollo even hired the former chief executive of Bank of Ireland, Brian Goggin, as its adviser.
‘The vulture funds operate on a three year-30% rule where they hold distressed assets for about three years and aim at getting a 30% return on their purchase.
‘The funds which bought Irish loans at a fraction of their value are now putting a squeeze on debtors to pay back the full price of their loan. The Sunday Business Post reports that Goldman Sachs and Cerberus, the company involved in allegations of bribery in the North, are ‘planning to heighten pressure on Irish borrowers’.
‘Many small businesses and owners of rental property will not be able to pay up. Their new owners will then foreclose on them, enabling others to buy them up at a fraction of the original price.
‘The result will be social dislocation – not just for the debtors but for the wider society. The tenants of buy-to-let small landlords could find themselves on the street as vulture funds squeeze their owners for a higher return and full payment on loans
‘The state should step in to avert this situation. Banks should be retained in public ownership and a left-wing government should repudiate deals done with the vulture funds.
‘When it comes to a choice between saving society and protecting the greed of the few, the choice should be obvious’