AIB putting pressure on me.

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I borrowed 100K in 06 to buy 2 properties abroad. I gave a 1 acre site as security.

I sold one property for 30k last year, the bank phoned saying they needed the money from the sale. They advised me to put the 30k into a deposit account which I am getting 2% interest on and I cannot withdraw this money.

Things started to go wrong and I could not afford the full payments and missed 3 have it paid up to date now though. I went back to the bank and asked them to put the 30K against the 100k loan.

They said the only way they would do this is if they got title deeds from land that my mother has. I told them forget it, eventually they said they will put the 30k in against the 100k but said the monthly payments won't change.

I am on a variable rate and 15 years left on the loan.

How can they do this?
 
Make an appointment to see someone at MABS. they will give you some guidelines.
rochs
 
So you will owe 70K? Why don't you sell the site to pay back the 70K? Or sell the second property you purchased abroad.
 
Under the Consumer Protection Code, the bank is obliged to act in your best interests. Assuming that the rate on the loan is higher than the rate on the deposit, they should have advised you to use the deposit to pay off the loan from the start.

So, first, you should insist that they refund you any excess interest. For example, if money was on deposit at 2% for 10 months but they were charging you 3% on the loan, then they should refund you €30,000 @1% = €300 per year = €250 for 10 months.

Have they set the €30,000 off agains the loan yet? If not, then don't agree to it for the moment.

Is there any formal legal connection between the loan and the property you sold? It seems to me that you secured the loan on the 1 acre site. If so, the bank has no right to the €30,000 and they should not have pressurised you into giving them a lien over it. I would insist on withdrawing the €30,000 cash and putting it in an account at a separate bank. You can use the cash to keep up the repayments on the loan.

When your financial position is more secure, you can decide whether the best thing to do is to use what is left of the capital to repay the loan.

Write to the bank and tell them that they have no right to the deposit. Under the Consumer Protection Code they should have advised you what was in your best intersts. They did not do so. Tell them that you want to withdraw the money immediately. Tell them that if they do not comply, you will make a formal complaint to the Financial Services Ombudsman

It's very important that you check your credit record with the ICB. If they have put up the missed payments, then tell them to correct this.


Brendan
 
The second property I have is only valued at 40k, and impossible to sell at the moment. The site has no planning and is only valued between 10 to 20K. I keep making the argument that they gave me the money first day and I am making every effort to pay it back. THe 30k is not gone against the loan yet should be done this week. I am getting 2% interest on this and paying 4.85% on the loan. The story will probally change agian this week. I have contacted a solicitor to find out why the monthly payments will not change when the 30k is put in. Why the 30k was not put against the 100k first day I presume it looked better on their books to have a site and 30k as security for the loan, and they would still be making money from me on charging 4.85 % for the 30k. I have been banking with Aib for 20 years and this is what I get in return.

Oh and I forgot to mention 2 months ago they said they would put the 30k in against the 100k on a new contract capital and interset for the first 5 years and the loan would be revise after this. In other wourd they want all the capital to be paid back after the 60 months. I got this checked out with a friend of mine who said don't even dream of signing it.
 
Hi Brendan
Brendan Burgess said:
Under the Consumer Prothection Code, the bank is obliged to act in your best interests. Assuming that the rate on the loan is higher than the rate on the deposit, they should have advised you to use the deposit to pay off the loan from the start.

So, first, you should insist that they refund you any excess interest. For example, if money was on deposit at 2% for 10 months but they were charging you 3% on the loan, then they should refund you €30,000 @1% = €300 per year = €250 for 10 months.

Have they set the €30,000 off agains the loan yet? If not, then don't agree to it for the moment. This is going to happen this week

Is there any formal legal connection between the loan and the property you sold? none what so ever. It seems to me that you secured the loan on the 1 acre site. Yes this correct. If so, the bank has no right to the €30,000 and they should not have pressurised you into giving them a lien over it. I would insist on withdrawing the €30,000 cash and putting it in an account at a separate bank. Tried this and they siad I can't You can use the cash to keep up the repayments on the loan.

When your financial position is more secure, you can decide whether the best thing to do is to use what is left of the capital to repay the loan.

Write to the bank and tell them that they have no right to the deposit. Under the Consumer Protection Code they should have advised you what was in your best intersts. They did not do so. Tell them that you want to withdraw the money immediately. Tell them that if they do not comply, you will make a formal complaint to the Financial Services Ombudsman

It's very important that you check your credit record with the ICB. If they have put up the missed payments, then tell them to correct this.


Brendan
Click to expand...
 
Write to them immediately and hand deliver the letter.

Tell them not to set the €30k against the loan as they have no right to do so.

Tell them to give you a bank draft for the €30k + interest immediately.

If they refuse, they will have to give you a letter in writing. Then go to the Ombudsman.

You do not need to go to a solicitor. The Ombudsman will sort it out for you.

Brendan
 
Hang on, the bank must have a lien on the two foreign properties (including the one you sold) or did they give you a 100k mortgage on a security worth €10-20k? Suppose in 2006, anything was possible!
 
I presume the site was worth way more in 2006 and loan was secured on that, planning may have lapsed by now 5 yrs later so is now just a field and not a site.
 
The bank gave gave me the 100k never asked for proof of income just the site as security and there was never any planning got on this site.
 
lee75 said:
The bank gave gave me the 100k never asked for proof of income just the site as security and there was never any planning got on this site.
Click to expand...

Mad. Well then, Brendan is right. Don't even waste your money on a solictor. The bank have no right to tell you what to do with the 30k from the proceeds of the sale and should never have made you put it in a deposit account and put a lien on it. Get the banks position in writing and contact the Ombudsman.
 
I think the OP would be very unwise to upset the bank. Yes the bank has no right to tell him what to do with the 30K but OP owes the money, it's secured on basically a worthless site, OP has defaulted or not complied with the terms of his loan (he mentioned arrears). Now most loans have in the small print some clause about calling in loans in arrears or whenever they, the bank, decide to do so. If he messes them around and gets his 30K he'll have a much bigger headache when they come looking for the 100K forthwith.

Lee what do you mean the 2nd property is worth 40K and is unsaleable. It's worth what you can sell it for? Is this a property in somewhere like Bulgaria, what is your long term plan for it? As in what did you buy it for?

I presume they originally loaned you 100K without 'real' security as your mother has assets/land?
 
Hi Bronte

An interesting approach.

He seems to have 15 years left on the loan. It's unlikely that it could be recalled, although there might be such a term in the loan agreement.

I think he should stick up for his rights here. Part of the reason he fell behind was because he didn't have access to the 30k.

Obviously we haven't heard AIB's side of the story here, but taking the OP's story at face value, AIB have a lot of questions to answer here.

brendan
 
The story seems a little bit strange. On the face of it it appears that AIB gave the loan secured only on a site, then how did they even find out about the sale of one of the two foreign properties? Did OP tell them, and if so, why, if the sold property legally had nothing to do with AIB?

There is the loan, with a site as security, 15 year term and certain monthly repayments. So long as OP didn't try to sell the site and kept up his monthly repayments, how did the sale of a foreign property ever come to the bank's attention and what has it got to do with the bank? I honestly don't understand it.
 
The bank called me in and said the borrowing was very high against the site and asked me for more security, at that point I told them that I was in the process of selling an apartment in Budapest but wanted to leave the money in high interest account in Budapest @ 8%. They said that they needed the money in for more secuirty. I was slow in sending in the money as I was watching the exchange rate I got several calls and text as the fellow in the bank said he was under serious pressure to get the money in. I should have got advice first but I thought I was doing the right thing,
 
In your original post;
"They said the only way they would do this is if they got title deeds from land that my mother has,"... was the loan secured on land that belonged to your mother, or is this a different site?
 
lee75 said:
The bank called me in and said the borrowing was very high against the site and asked me for more security
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Is there anything in your contract that allows AIB to demand more security? The value of the site is very low compared to your debt secured on it, but that's the bank's problem, they shouldn't have lent your the money without adequate security in the first place!

I am not sure how widespread such practice by banks is, but it's really appalling.

I think Brendan is right, you should stand up to the bank and fight to get the 30,000 back, you wouldn't have had any immediate financial problems if you hadn't given this money to the bank, as you could have used it to subsidise loan payments for a very long time or paid some off the loan and retained the remainder. It's not up to the bank to decide what you should do with your money, just because they were stupid to lend without sufficient security.
 
losttheplot said:
In your original post;
"They said the only way they would do this is if they got title deeds from land that my mother has,"... was the loan secured on land that belonged to your mother, or is this a different site?
Click to expand...

The site belongs to myself, notting to do with my mother. They just tought they would get this security as well.
 
Didn't think they could do that, it has nothing to do with your mother. It sounds very unprofessional. Sounds like someone screwed up by giving you the initial loan and is panicking and maybe trying to hide it from their boss. I wonder was their a "rogue" loan approver firing out loans to blow up their commision. Now it's all gone wrong and they're desparetely trying to clear it up. I also find it strange that you received text messages from them. All my contacts with banks has always been mail, voice calls or voice messages - never a text. Is it always the same people in the bank you're dealing with?
 
There was nothing in the contract about extra security. I have told the bank several times that they made the mistake and they accept it every time I say it. [

Sorry if i did not explain myself properely on the 30K. I now want to pay this off the 100k as I am getting 2% interest on the 30K and paying 4.85 % to borrow it. This is the big problem in trying to get them to pay this off the 100k. I just don't understand them, why they do not want to pay down the 30K, and up until last week they said they wouldn't unless they get more security.

I did my calculations last week on the mortgage repayments when the 30k would be paid off I could afford it, but then as I say the bank turned around and said that the monthly payments will not reduce so I am back in the same position I was in first day with the repayments.








Greta said:
Is there anything in your contract that allows AIB to demand more security? The value of the site is very low compared to your debt secured on it, but that's the bank's problem, they shouldn't have lent your the money without adequate security in the first place!

I am not sure how widespread such practice by banks is, but it's really appalling.

I think Brendan is right, you should stand up to the bank and fight to get the 30,000 back, you wouldn't have had any immediate financial problems if you hadn't given this money to the bank, as you could have used it to subsidise loan payments for a very long time or paid some off the loan and retained the remainder. It's not up to the bank to decide what you should do with your money, just because they were stupid to lend without sufficient security.
Click to expand...
 
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