Regulation

Explainer: Mortgages, vulture funds, and the gaping regulatory gap

Gaps in the regulation of vulture funds came to light this week, raising concerns about the Central Bank’s ability to regulate such firms

The issue has only just come to light as a consumer, who took a case to the Financial Services and Pensions Ombudsman could not be helped. Picture: Getty Images

A law introduced five years ago to protect mortgage borrowers whose loans were sold to so-called vulture funds came into the spotlight this week as gaps in foundation of the regulation have left consumers in the lurch.

The issue only made headlines after a consumer, who took a case to the Financial Services and Pensions Ombudsman (FSPO) complaining of poor treatment by the company servicing her mortgage, was told she could not be helped.

The case has revealed a gaping hole in the legislation and raised questions about a larger loophole that vulture funds are using to circumnavigate the system.