Loan placed on Interest Only: never requested but now Bank wish to change

M

mercman

Guest
Refinanced a residential property in July '08 for a specific purpose regarding a commercial property transaction. Do quite a bit of business with the same Bank and never any big problems. Have never missed a payment with any Bank including this one. The original letter of offer included a tracker rate but they state that as the forms were two days late, they could not offer the tracker rate. (I have disputed the two days delay but has fallen on deaf ears).

Regardless the money was drawn down via solicitors and within six months, it was noticed that I was paying Interest only and no Capital repayments were been included in the deductions. I contacted the Bank and they have on file four pieces of correspondence plus a number of e-mails, requesting Capital repayments to be included in my monthly repayments. This was ignored and in end 2010 I was asked to sign a new form to change to Capital repayments. This was declined as frankly it didn't suit me at the time.

Received correspondence from the Bank in July'11 stating that as the Interest only period was coming to an end, they would automatically be placing me on Capital and Interest. I wrote back to the Bank stating that they simply cannot penalise me for their actions and asked on what basis they were acting on, as I never requested Interest Only. They returned forms to me, supposed to have been signed by me, but I never saw these forms previously. There are signatures on same but they are not witnessed or countersigned or dated. There is none of my writing (apart from the signatures which are not in accordance with the manner I sign papers) on the forms whatsoever. I have asked if the signatures on the forms were digitised and copied. Of course they said NOT at all, but I have asked for sight of the originals (not the copies) and this has been declined.

Most interesting, the copies of the forms state that the Interest Only section is for five years from 2008 (they state that is when same were signed), which would leave the matters satisfactory for me and the change would be in July 2013. The same part of the form only states that the Interest Period was to be fixed for 3 years, but my repayments have changed over the past three years. I spoke with the Bank last Friday and they state that this does not form part of the contract.

I have asked repeatedly for copies of correspondence where I requested Interest Only. This was not forthcoming. I have never asked for this type of lending ever and can prove this as I can show I never had Interest Only on loans by any Bank.

Rather than heaps of correspondence going backwards and forwards, would anybody have any suggestions as to what is the best way forward. What I did request was for another six months from September '11 to remain on Interest Only, but they have declined this unless I complete more forms showing my asset base, bank balances etc., which will then go under their credit committee. They state that the forms must be completed by instruction of the Central Bank.

Anyone with ideas or suggestions ??
 
mercman

This seems to be maladministration, but only that.

You have a contract to pay interest and capital. They did not implement that when they should have. They did not implement that when you asked them to.

However, they do have a right to implement it now, because that is the original contract.

So, in my view, the lender is correct to switch you to a repayment mortgage.

In practice, I think you have a right, within reason, to time the switch. If I understand your post correctly, you are quite happy to begin capital and interest payments in March 2012. The bank should be delighted with this.

I think that the simplest is to complete the forms as requested. If this is your Principal Private Residence, then they seem to be the MARP Standard Financial Statement forms which are compulsory.

I would also formally notify them that you are making a complaint to the Ombudsman over maladministration. I would hope that once this hits their internal complaints process, they will tell the credit guys to extend it to March 2012 as requested.

Brendan
 
Most interesting, the copies of the forms state that the Interest Only section is for five years from 2008

The same part of the form only states that the Interest Period was to be fixed for 3 years,

Is it correct that on one form two different periods of interest only are written?

I understand the bank have given you a copy of what you signed? Is it your signature, are you saying that your signature is a forgery?

Also your original offer was for a tracker, this was withdrawn, did you get a different letter of offer to sign?
 
Is it correct that on one form two different periods of interest only are written?

I understand the bank have given you a copy of what you signed? Is it your signature, are you saying that your signature is a forgery?

Also your original offer was for a tracker, this was withdrawn, did you get a different letter of offer to sign?

No. On the form the Interest Only period is marked for five years, not dated so I'm unaware as to the commencement date. I do not sign any forms without dating my signature. The same bank always ensures the forms are countersigned by members of the Bank or a solicitor. The other part of the form states that three years is to ficed, which did not happen.

I am not saying it is a forgery. What I am saying is that my signature could have been digitised and then placed on a different form.

Yes the tracker offer was withdrawn as the form was late by two days. Am awaiting confirmation from solicitors as to when they received the original papers. A new letter of offer was issued to my solicitors.
 
You have a contract to pay interest and capital. They did not implement that when they should have. They did not implement that when you asked them to.

However, they do have a right to implement it now, because that is the original contract.

So, in my view, the lender is correct to switch you to a repayment mortgage.

In practice, I think you have a right, within reason, to time the switch. If I understand your post correctly, you are quite happy to begin capital and interest payments in March 2012. The bank should be delighted with this.

I think that the simplest is to complete the forms as requested. If this is your Principal Private Residence, then they seem to be the MARP Standard Financial Statement forms which are compulsory.

I would also formally notify them that you are making a complaint to the Ombudsman over maladministration. I would hope that once this hits their internal complaints process, they will tell the credit guys to extend it to March 2012 as requested.

No it is not my PPR. I did request a six months waiting period for the Capital to be deducted. It is only then that they sent me these papers incinuating I signed Interest only forms. The Capital & Interest payments have already commenced which does not really suit me at this point in time. Although it really does appear as if my signature has been copied, I really am not that keen to go to the Ombudsman as there is a nine month waiting period, and frankly the Ombudsman more often than not sides with the Bank and not the customer The fixed rate Interest has not really happened as the deductions have been variable since the mortgage commenced. There are an awful lot of unanswered questions which are been fudged or it appears that Bully Boy tactics are been used.
 
1. No. On the form the Interest Only period is marked for five years, not dated so I'm unaware as to the commencement date. The other part of the form states that three years is to ficed, which did not happen.

2. I am not saying it is a forgery. What I am saying is that my signature could have been digitised and then placed on a different form.

.

1. the answer is Yes not No if the interest only on the form is marked for 5 years and for 3 years.

2. Well it is a forgery if you did not sign the document?

If going to the ombudsman takes 9 months then that is a good thing surely as you can stay as you are while you are disputing the case? We have had only today a case on here where the ombudsman sided with the customer. I have an ongoing case myself and would hope he is impartial.
 
Apologies for not explaining the matter properly.

There is a box on the form ticked for a 5 year Interest only period. Then separately some person has written in '3 years' fixed rate. The writing is certainly not mine in both cases.

I am not saying it is a forgery until I have sight of the original form. Until then I cannot say for certain. Regarding your point re bringing it to the Ombudsman, I did suggest this but it has been insisted that Capital & Interest continues to be taken. which defeats the entire process.

Personally I would prefer to go to Court rather than the Ombudsman.
 
Having dealt with queries like this in my previous employment usually what it says on the form doesn't really matter that much even if it was not what you think you wanted, what matters is what did the loan offer you signed with the solicitor say. This is the one that should be checked, if it said interest only and that was not what you wanted then it should have been noticed and an amended loan offer requested from the bank. Same with the 3 yr fixed option, all this should have been on the loan offer and checked with solicitor before signing. This will be the banks defence I would think, if you signed loan offer for what you got then you agreed to it. However if the loan offer is different then thats another story.
 
This is the one that should be checked, if it said interest only and that was not what you wanted then it should have been noticed and an amended loan offer requested from the bank. Same with the 3 yr fixed option, all this should have been on the loan offer and checked with solicitor before signing. This will be the banks defence I would think,

Checked the papers. The original loan offer stated nothing about interest only. Nothing about fixed rate only. This only came about in August when the Bank presented me with a copy of the forms which I am supposed to have signed. (my signatures are on it but they will only provide me with a copy, will not show sight of the alleged original). There are no other signatures on same or any dates.
 
That is odd so, the original loan offer is correct so. Another question, you say they did not give you the original tracker rate as your acceptance I presume was 2 days late, did they then issue another loan offer with the new rate to your solicitor with the cheque to be signed before he released cheque? This would often be the case if there was a change in rate between offer and drawdown. If not, then it looks like they messed up.

However if you had a 5 yr int only period then it should not be up until 2013, your fixed rate would be up now but the interest only should continue, is this not the case with them now? And would that suit you now if they stuck to the terms that they are saying you signed for?
 
However if you had a 5 yr int only period then it should not be up until 2013, your fixed rate would be up now but the interest only should continue, is this not the case with them now? And would that suit you now if they stuck to the terms that they are saying you signed for?

Exactly, this is how this mess started. After working into the early hours of this morning, I reckon the Bank are working on terms which do not form part of the original letter of Offer. You are correct, it appears the Bank have messed up but they wish me to take the full blame for their mistakes.

Question wbbs: How do the Bank work their months ? According to my calculations the Bank received the original offer accepted within the two month period. Allowing that there was a Public Holiday in the midst of the two month period and a delay in postage of a day, I reckon I was penalised unduly.
 
Not sure which bank you are with and only have experience of one, some of the brokers on here might know more about other banks. Usually if there was a change in fixed rates existing loan offer holders would have a set number of days to draw down at old rate, now if they were not in a position to draw down for any reason then it would be the new rate they would get, be it higher or lower. Variable rate changes didnt matter as your rate would move with it anyway. In your case the tracker product must have been withdrawn around that time, there might have been a date on which existing loans had to be drawn and you missed it. Mind you returning the loan offer used to mean nothing in terms of accepting the rate, the rate could still change prior to drawdown, it was the drawdown date that was important, again as I say this only relates to the bank I was with but those deadlines were very rigid.
 
In this case the loan offer was issued on 20/05/08, and was returned on 23/07/08 but was declined as they maintain that it fell outside the two month period. I say it is with due to the Public Holiday and at least one day for the delay in postage in my Solicitor receiving the offer. I must now await for mine to confirm the receipt date.

The Bank have withdrawn the Interest only portion which they ran with for three years but have never based the loan on a the fixed Interest rate. None of these items formed part of the original offer and were never requested by self.
 
In terms of signatures most (but not all) banks have some sort of a digitised archive of signatures, usually based on the signatures you originally signed when you opened the account. The original signatures are usually held on paper copies at the account holding branch.

Is a request under the Data Protection act feasible? There have been significant issues within the banks regarding substandard/incomplete and missing paperwork and I recall NAMA highlighting it as a particuler issue when they took on the loan books.

If you feel (as your OP seems to suggest) that some of the forms are forged, is it worth stating this to the bank and that you are referring the matter to the Gardai and then, depending on their response to that, perhaps actually doing so. I seem to recall the Ombudsman mentioning cases of forged signatures in his annual reports in the past
http://www.examiner.ie/business/cou...orged-signatures-on-loan-document-112032.html
 
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