Private Equity Firms are now having an ever increasing role in relation to the mortgage market in Ireland. It has been recently reported that an estimated 40,000-50,000 mortgages are now currently owned by Private Equity firms.
This influence on the mortgage market place has been growing rapidly in Ireland since 2011 and it will only continue to grow and grow in the coming months and years ahead. Therefore, the aim of this blog is to educate you on what a loan sale to a Private Equity Firm entails so that you are fully prepared for this eventuality.
Some would argue that Private Equity Firms are not interested in negotiating with the customer to help them restructure their loans so that they're sustainable. The argument has been made that Private Equity firms simply want to acquire a discounted asset that they have bought i.e. a customer’s home.
In contrast to this, others would argue that more and more Private Equity Firms are now adapting the approach that if the customer is willing to engage and willing to pay what they can afford then they will reciprocate this engagement to attempt to achieve a long-term solution.
Based on the above, it is quite clear that in relation to this matter if you bury your head in the sand or continue to ignore any engagement with a Private Equity Firm then you have a lot to fear. However, if you have a plan in place and you are open and willing to make what can often be deemed as a sacrifice to make that plan work then you will have nothing to fear.
There is no doubt that Private Equity Firms still have a negative perception in Ireland and are often referred to as Vulture funds. However, recent statistics have shown that some are attempting to improve that reputation by now following regulatory codes, having long engagement with customers in relation to their standard financial statements and working more closely with debt solution organisations.
In light of this, Private Equity Firms would state that this is not vulture activity but rather what a bank would do. They would also reinforce the view that they in fact do deals that the banks won’t do. Recent statistics do highlight that there are massive write-down’s being done by these Private Equity Funds which is a very promising development in this ever changing landscape.
What should I do?
Whether or not you are of the opinion that the new owner of your loan is a positive or negative development, it is vital that you have a plan of action in place to deal with them.
The business model of many Private Equity Firms is not a long-term one. They will either seek to agree a restructure of the loan with you or else they may well potentially seek to repossess your property secured against the loan.
Subsequently, please ensure that you are fully prepared and have the necessary funding in place to address this matter. Do not ignore and do not wait any longer to act on this. We, at GDP Partnership, can’t stress the importance that you must ACT TODAY to deal with this eventuality.
It is also very important to take advice in this regard from a regulated team of debt advisors to plan for the future, and the time to act is now.
What we can do to help?
Since 2011, our loan sales team have been helping borrowers with banks. Seven years into this journey and we are now heavily involved in a new wave of business involving loan sales and trying to help all kinds of businesses and families hold onto their properties and their livelihood.
We have particular expertise in dealing with private equity funds, and we would like the opportunity to share this with you. In the past 12 months, our team has been involved in over £150MM of refinancing deals involving private equity companies therefore we are well placed to help you in this regard.
Solutions are available and it can be quite empowering once one works out the different options open to them. Our team have significant experience in this area as we have restructured hundreds of millions of pounds worth of loans in the last seven years. We know what is expected and how to get you to where you want to go. In short, we WANT to hear from you today.