Thousands of mortgages to be moved as operator leaves

Start Mortgages is transferring the servicing of 11,000 mortgages to Mars Capital, the Irish Independent has learned.

Start originated some of the mortgages on its books as it previously operated as a subprime lender before the property collapse.

But most of its mortgage book is made up of loans it services on behalf of vulture funds.

It is known that many loans have been restructured, but a significant proportion of the mortgages are still in some form of distress.

When US investment giant Lone Star bought Start after the crash in 2014 the deal included a licence from the Central Bank, sparking speculation it could develop into a new bank but it never happened.

Start Mortgages is now leaving this market and has told the Central Bank it is revoking its licence.

It is not known why Lone Start has decided that it is no longer interested in having a mortgage credit servicing operation in this market.

Lone Star has owned Start Mortgages since 2014.

Sources indicate that it is likely that the transfer of the servicing rights from Start to Mars will take between six and nine months to complete.

This means it will be business as usual for Start’s customers until the transfer is complete.

One person familiar with the situation said: “Start employees continue to support borrowers experiencing financial difficulty, to ensure they can continue to meet their mortgage obligations and remain in their homes. There is no reason for customers of Start to be concerned.”

It was emphasised that there will be no impact on those borrowers whose loans are currently serviced by Start Mortgages.

“This transaction will not impact borrowers or the terms of their loans. The only difference is that their loans will be managed by Mars Capital rather than Start,” the source said.

Their rights under Irish loan regulations will remain unchanged.

Communications will be issued to customers at the appropriate time, the source added.

It is understood that most staff will migrate to Mars Capital which means their jobs are safe.

The majority of the staff at Start will move to Mars Capital under Transfer of Undertakings (TUPE) agreement.

The transition will likely take at least six months.

There was no comment from Lone Star or Start.

Mars Capital said Lone Star Funds has reached an agreement to transfer the servicing rights of the Start Mortgages mortgage book to Mars Capital Finance Ireland.

Subject to certain third party approvals, the deal is expected to close in approximately six to nine months, with all of the Start Mortgages loans and the vast majority of staff transferring to Mars over this period, it said.

“This transaction will not impact borrowers or the terms of their loans. Borrowers’ rights under Irish loan regulations will remain unchanged. The only difference is that, once the deal closes, the borrowers’ loans will be managed by Mars rather than Start,” Mars said

Mars said the team at Start, like Mars, is focused on delivering the right outcomes for customers and clients while adhering to regulatory obligations and Central Bank of Ireland’s expectations.

“We are very excited about what our future together holds,” the firm said.