In the public war of words surrounding European Central Bank-enforced loan sales, one particular boy’s tendency towards crying wolf is starting to become tiresome.
For the umpteenth time, David Hall has warned of a tsunami of home repossessions with the volume of displaced families so large they could fill Croke Park.
His latest warnings follow the announcement of a €900 million loan sale by Ulster Bank which includes private mortgages.
There’s no shortage of public sympathy for those who find themselves so hard-pressed that they’re unable to pay for the roof above their heads. And that sympathy certainly intensifies when their mortgage is sold on to a largely faceless private equity company, often referred to as a vulture fund.
It’s important that in the debate around these funds we continue to make it clear that the lower regulatory hurdles they face are problematic and need to be addressed. But when we reduce the debate to rhetoric about floodgates opening, nobody is well served.
Evidence of past loan sales shows that they come after a series of efforts to resolve the issues at hand. Central Bank statistics also makes clear that the repossession rate is falling. Meanwhile, analysis by University College Cork economist Séamus Coffey done in 2017 shows that the vast majority, or 85 per cent, of court repossessions were taken by regulated financial institutions, rather than funds – a fact that is unlikely to sit well with Hall's "tsunami" narrative which has yet to play out.
Of course, he believes he’ll be on the right side of history with this prediction. Although that’s unlikely to be the case, it’s important to note that he has helped a large number of people in a very meaningful way.
Nobody is arguing that the funds who buy up distressed loans don’t need to fall under greater regulatory inspection. But with Hall’s continued exaggerations, the key points, and his good work, risk being forgotten about.
About 3,300 homes have been repossessed since the financial crises. For Hall’s version of history to play out, we’ll need at least 79,000 more.
