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  #1  
Old 09-03-2012, 05:10 AM
DavidKoresh DavidKoresh is offline
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Default Lender increased my interest rate - said I did not qualify for MARP

When MARP was just getting started I requested my bank in writing to include me in the MARP process. They met me and informed me that although the mortgage was on my family home they had given me a commercial mortgage...(to finance another house purchase) and as such I would not be eligable for the MARP process ever. They then pressurised me to sign up to new mortgage contract terms....capitalising arrears and applying a higher interest rate...(called to my door at 7:30am to get me to sign the contract).

At the time I tried to resist signing this new contract as it just seemed to postpone the inevitable and in fact was going to make the situation worse in the long term (with the higher interest rate). After a few months I was back in arrears again, but now this time they indicated that I would be part of the MARP process.

I met with the bank and asked them to explain why I was not included in the MARP process at the outset and asked why I was given misleading information on the matter and given no option but to sign a new contract which contravened MARP principles in a number of areas. At a meeting I asked the bank to come back to me with an explanation. I also took advice and was informed that I would have a valid complaint if I pursued this - presumably with the Financial Ombudsman.

Since this time, almost a year ago I have been making payments as best I can but it still isn't enough to cover even the interest. The bank however in fairness to them have not put me under the intense pressure I experienced over a year ago.

My question is. Do you think my "mistaken" exclusion from the MARP process was significant enough an error that the bank have no decided to now give me extra leeway? Its a difficult time not knowing when the axe will fall.....
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  #2  
Old 09-03-2012, 07:57 AM
Brendan Burgess Brendan Burgess is offline
 
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Hi David

The Code of Conduct on Mortgage Arrears will provide the answer. Unfortunately, it's not available on the Central Bank website as I write this. (I have reported the broken link)

As I recall, the purpose of the loan does not matter. If it's secured on the family home it comes with the Code and therefore must be subject to MARP.

They are not allowed to penalise you for being in arrears. In other words, they can't increase your interest rate. So you need to write back to them and tell them to reduce the interest rate to the original rate and to credit you with the difference.

But you have to ask youself a fundamental question. With the new rate, is your mortgage sustainable? If not, then you should attempt to agree a voluntary surrender with them.

Brendan
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Old 09-03-2012, 09:37 AM
DavidKoresh DavidKoresh is offline
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I have for a long time been telling the bank that the mortgage is unsustainable but they have done nothing about it and have suggested nothing. For the moment to seem to want to kick to touch. I presume they don't want to start recognising these losses on their balance sheet yet.
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  #4  
Old 09-03-2012, 10:19 AM
Brendan Burgess Brendan Burgess is offline
 
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I have found the Mortgage Arrears Code and it says

Quote:
This Code applies to the mortgage loan of a borrower which is secured by their primary residence.
So, it does not matter what you borrowed the money for. You should be treated under the Mortgage Arrears Code.

Set out a summary of the dates, the facts and the figures and we might have some suggestions for how to approach this.
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Old 09-03-2012, 10:26 AM
Bronte Bronte is offline
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Quote:
Originally Posted by DavidKoresh View Post
They met me and informed me that although the mortgage was on my family home they had given me a commercial mortgage...(to finance another house purchase) and as such I would not be eligable for the MARP process ever. They then pressurised me to sign up to new mortgage contract terms....capitalising arrears and applying a higher interest rate...(called to my door at 7:30am to get me to sign the contract).

...
We don't have all the details, but if the bank decided to give you a commercial loan for your home than that's their problem. Totally outreagous that they called to your door at 7.30. Sounds like someone in the bank was under severe pressure. Leads me to think 'someone' in the bank made a mistake and to rectify it 'forced' you though misinformation, pressure, fear, underhand practices to enter the new contract with no legal advice whatsoever. You're going to have to go to the ombudsman, no easy task, record now everything that has happened so that you don't forget anything. First step is letter of complaint to bank. This may be a long process.

If you've posted your real name on AAM I suggest you change it. Banks are watching on here.
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  #6  
Old 09-03-2012, 10:36 AM
44brendan 44brendan is offline
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I believe that this is very poor banking practise and you do need to make a complaint, first of all to the Bank and ultimately to the Ombudsman if the issue is not dealt with to your satisfaction.
Having said that, I suspect that neither the Bank nor your position has changed as a result of this restructure. If your home is in negative equity and you are unable to met even the interest on the mortgage, you have a problem that is only getting worse. As per the earlier post by Brendan B. you need to look at surrendering this property to the Bank and starting afresh. Forget the consequences of them pursuing you for the balance. If you can't pay, there is little they can do.
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  #7  
Old 09-03-2012, 01:06 PM
DavidKoresh DavidKoresh is offline
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I did complain again in writing to the person who runs their MARP process. They never responded and have seemed reluctant to contact me. One of the two people who informed me that I could not be part of the MARP process has since "left" the bank...
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  #8  
Old 09-03-2012, 01:38 PM
44brendan 44brendan is offline
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Your issue is with the "Bank", not the individuals who dealt with your case. Address your letter to the Customer Complaints Manager in the HO of the inststution and outline your experience, enclosing a copy of your previous correspondence and failure to get a reply. Copy this letter to your local branch.
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