Some people are wrongly attributing their problems to their loss of their tracker.

[Mortub2005]

Hi Brendan,

I most definitely do not blame the banks for all the stress over the past 10 years. Yes my husband was working in construction and lost his job that was the fault of the downturn. Unfortunately for us we would have been able to make our mortgage payments if we were on tracker. Having to deal with the banks caused a lot of anxiety for me and we would not have had to do this if we were on correct rate. So for this I do blame them.

 

[Waver]

I think this theory ignores the psychological impact of debt.

A smaller debt may have seemed more manageable and allowed wronged customers to may adjustments to tackle the debt. A very large debt which was caused partly by the wrong tracker and partly by other factors may have seemed insurmountable and caused customers to give up.

 

[Brendan Burgess]

Having to deal with the banks caused a lot of anxiety for me and we would not have had to do this if we were on correct rate. So for this I do blame them.

Agree fully with you.

That is the point I am making. The loss of the tracker caused problems for people. For some people it was the main or only cause of the problem. For others, it was not the main cause of the problem.

Brendan

 

[Brendan Burgess]

A smaller debt may have seemed more manageable and allowed wronged customers to may adjustments to tackle the debt.

Hi Waver, you have a point here.

If the person has arrears of €21,000 and was overcharged by €20,000, I think that they could say that their problems were caused by the overcharging. Most of us would pull out all the stops to avoid early arrears, but when we have insurmountable arrears, there is less point in making sacrifices.

But in the example I gave of €50,000 arrears with €20,000 overcharging, they would have been in deep arrears anyway.

Brendan

 

[Brendan Burgess]

I have added a Case D to the initial post and would be interested in feedback.

However, what about Case D?

The lender and borrower engaged with each other. The mortgage was restructured so the payments were reduced to close to what they would have been on a tracker mortgage.

So he was overcharged "only" €5,000.

D cannot attribute all his problems to the loss of the tracker.

 

[joe351980]

Would partially agree. Put the stress of actually having to deal with the banks is again hard to compensate for. Also there is that uniquely Irish feeling of owning your home.

 

[gnf_ireland]

Before I comment, I do want to say that I do fully emphatise with you here, but would just like to make one point

Unfortunately for us we would have been able to make our mortgage payments if we were on tracker.

I think your wording here needs to be slightly changed - you would have been more likely to afford the mortgage repayments if you were either on your original tracker rate or a similar low cost tracker.
If the terms were prevailing tracker rate, and the bank had a tracker rate of 2.5% + ECB available, it may have been a different matter. It was the interest rate that caused the issue.
Obviously everyone's mortgage contract terms can be slightly different - so without reviewing these it is hard to know. I agree with most that in hindsight there were probably not strong enough and can be misinterpreted. But the fact is still that in 2008/09/10- low cost trackers would not have been available as prevailing tracker rates - so the issue may still have happened.

Having to deal with the banks caused a lot of anxiety for me and we would not have had to do this if we were on correct rate. So for this I do blame them.

Absolutely - the banks behaviour both from a customer contact point of view and from dragging their heels point of view has been terrible. The behaviour of PTSB on the customer who won the FSO case, then went to the High Court and won and the bank still threatened the Supreme Court on them before changing their rates is unforgivable. They could have changed the rates after the FSO case and only changed them back in the event they lost the High Court case.
I have said in a separate thread, I believe anyone impacted should have a 0% rate applied from the date they are identified until the date the issue is resolved, and even better a payment freeze during that window also. Anyone who has been delayed in being identified should have their compensation doubled, and anyone who complained and lost should also have their compensation doubled.


But that said, I do not believe everyone who is claiming to be a victim of the tracker scandal is necessarily going to win. I believe a lot are now trying to create cases for themselves to see if they can benefit from this in hindsight. Understandable to a degree, but many of these are unlikely to be successful..

 

[Foxy007]

I don't agree. We were one of these 'people' and were over charged 12k plus a year....That 12k is the cost of IVF, the cost of a car, the cost for a lot of people of running a household, food for kids schooling for kids. I lost my job 3 times through redunancies and the stress and worry was way too much for me. I suffer hugely from anxiety now and this whole discussion brings the madness we went through all back. We also had a house with pyrite and had to struggle with that during while paying excess money we didn't need to pay for a house we couldn't live it. I don't think anyone here knows the full extent of much this has impacted people lives. Like it or not people do actually need money to live too. We were living day to day. 5k, 500K or 500 euro is still money. I don't usually mention all the stuff we went through as a result of not having that money when it was badly needed but clearly it is necesssary.

 

[gnf_ireland]

Would partially agree. Put the stress of actually having to deal with the banks is again hard to compensate for. Also there is that uniquely Irish feeling of owning your home.

Agree, this is the hard part. The easy part in all of this is calculating the financial cost to the mortgage holder based on the overpayments

What cannot be calculated easily is the non-financial cost and the sacrifices the customers had to make to stay out of arrears, or the pressure the banks directly applied put those who went into arrears. In effect, the human cost

@Brendan Burgess - it may make sense to split this into two parts. The financial cost and the human cost, and see if there is any precedence on how the human cost of something like this can be calculated, either here or internationally. A person who went into arrears may have less 'human cost' than someone who did not - because maybe they strategically defaulted or other factors such as loss of job were contributing factors. This is why I think there is no real correlation between the two.

There are lots of complex variables into the calculation of the human cost, including the nature of the person themselves. It would be interesting to see what other countries have done in similar cases (assuming there are any ???)

 

[gnf_ireland]

We were one of these 'people' and were over charged 12k plus a year....That 12k is the cost of IVF, the cost of a car, the cost for a lot of people of running a household, food for kids schooling for kids. I lost my job 3 times through redunancies and the stress and worry was way too much for me. I suffer hugely from anxiety now and this whole discussion brings the madness we went through all back. We also had a house with pyrite and had to struggle with that during while paying excess money we didn't need to pay for a house we couldn't live it.

@Foxy007 I think you have hit the nail on the head here, for both arguments
You went through a lot in the 8 year period, and this has caused you a lot of anguish and pain and you will no doubt have to live with the impacts of this for a long time. In my view it is irrelevant as to whether you went into arrears or not - there was suffering caused
BUT
Not all the suffering was a result of the loss of the low cost tracker. Some of it was, but there were other factors including loss of jobs 3 times and pyrite, and no doubt other things. How do you allocate suffering between each of these factors, what about the cumulative effect where stress compounds itself, what about the impact it potentially had on a relationship/family both immediate and extended.
But the problem is not all is as a result of the loss of the tracker - which is why I say the human cost is complex !

This will be the challenge - calculating the human cost for people who were impacted (and my view is everyone was, one way or another)

 

[Brendan Burgess]

That 12k is the cost of IVF, the cost of a car, the cost for a lot of people of running a household, food for kids schooling for kids.

Again, you are missing the point completely.

If you delayed having children, because you were overcharged, you can certainly claim that the cost of IVF should be factored into the compensation.

But if you would have been in €30k arrears anyway, then you can't blame the overcharging. You blame whatever it was which pushed you into arrears e.g. the loss of your job.

Brendan

 

[gnf_ireland]

You blame whatever it was which pushed you into arrears e.g. the loss of your job.

Can I take the liberty of rewording this line slightly
"You need to apportion blame all contributing factors which resulted in the difficulty, including loss of job and loss of tracker"

The point is you don't have to be in arrears to have suffered. I am sure many people who barely struggled through suffered as much, if not more, than some of those who went into arrears.

 

[Brendan Burgess]

The point is you don't have to be in arrears to have suffered.

I have made that very clear in the first post

Borrower A is a bit more complex. If they had plenty of income and savings, the extra €20,000 may have just been a financial loss and may not have impacted their life. But if they had to cancel their health insurance and make other sacrifices, they may well been severely impacted.

I will say it again.

People who were in arrears due to the overcharging, who would not otherwise have been in arrears, have been very badly affected.

People who were overcharged and have kept out of arrears, may have been very badly impacted.

People who were in arrears well in excess of the overcharge, had problems whose main cause was something else.

Brendan

 

[gnf_ireland]

People who were in arrears well in excess of the overcharge, had problems whose main cause was something else.

I agree with you, subject to a slight rewording ;-)
People who were in arrears well in excess of the overcharge had other contributing factors and cannot reasonable attribute all of their difficulties are as a result of the overcharging.

 

[robe]

I disagree Brendan.
Take case c.
So a btl tracker with ptsb .put onto the magic rate of 3.35 % above as opposed to the correct rate of 1.1% above .
So overpaying by 9k a year on a 400k mortgage .
Struggle to keep payments going receive 1100 a month in rent , running costs 250 so 850 left to pay mortgage .
So paying €13,400 per year, rent in covers €10200 so leaves a shortfall of €2800 .
Which has to come from somewhere, so borrow and spend savings to keep up.
Tenants move out ,.house destroyed needs 4 to 5 k spent on it .
No funds available....ptsb no help .
House remains vacant ... no rent in ...arrrears build very quickly.
If the tracker rate was correct 1.1% above the btl would show a nice profit (€5800) and money would be available from savings to refurbish the house .

 

[Brendan Burgess]

Hi Robe

I was referring to family homes, so maybe it's different for buy to lets.

It seems clear from your numbers that the arrears are due solely to being overcharged by the lender. There is no other cause as far as I can see. Therefore this is Group B and not Group C.

Of course, but to let is risky, and the failure to be able to let it is probably a big cause of the arrears. That is not the bank's fault.

Brendan

 

[robe]

Not being able to let is due to lack of funds to carry out repairs and redecorating.
Lack of funds is due to overcharge .
But yes I know you are talking about family homes , but I'm sure this scenario could be related to a family home .

 

[gnf_ireland]

It seems clear from your numbers that the arrears are due solely to being overcharged by the lender. There is no other cause as far as I can see.

Tenants move out ,.house destroyed needs 4 to 5 k spent on it .

Not sure its fully down to the overcharging. There is another major factor in this that the tenants destroyed the house so it could not be rented out so the income stream disappeared. Had the house not been destroyed by the tenants, then the arrears would not have been as bad.
If you as a landlord had selected different tenants or you had inspected the property more frequently it may also have avoided the need for the refurbishment. I don't think you can blame the bank for the tenants you selected!

If the tracker rate was correct 1.1% above the btl would show a nice profit (€5800) and money would be available from savings to refurbish the house .

Lack of funds is due to overcharge

That's assuming the savings had not been spent and were available solely for this. I can fully accept there is a negative cash flow impact as a result of the overcharge.
In theory you could also blame the government, due to increased taxes such as property tax, NPPR, reduction in allowance interest rates etc also caused a negative cash flow impact.

Was it all down to the overcharge? No, I don't think it was. In any 8 year period, it will be very difficult to pin everything on a single issue. It is a combination of factors - it does not make it any better or any worse though!

But yes I know you are talking about family homes , but I'm sure this scenario could be related to a family home

Not sure how to be honest, as the issue here is a combination of increased outgoings and reduced income as a result of the overcharge. The function of a family home is not to generate income, so hard to be hit on both sides. Any loss of income is probably not a result of the overcharge.
At an absolute stretch, you could say that the family were renting a room for 10,000 euro to help with the mortgage. However, due to the additional stress the mortgage caused, including a decision to dramatically reduce the heating costs, the tenants moved out as the house was no longer a nice place to live. The mortgage fell further into arrears as a result.
But the tenants could have moved out for any reason - including nothing to do with the family, so would be a hard one to argue.

 

[joe351980]

Brendan have u any idea how banks should work out compensation?

Do you believe the compensation in any of the cases in general was sufficient? Or how do you reckon banks came up with a figure without consulting a group representing affected customers.
Again it seems arrogant of the banks. Pay them x and sure they'll be grand. If not jump through a few hoops first.

 

[Mortub2005]

@gnf_ireland my husband did not lose his job until early 2010 which is when I had to engage with the banks. The difference to us is 500 euro pm which would have made a big difference to us. I know we would definitely have been able to make the repayments at the rate we have which is 1.05 + ecb. What I found the hardest was we were in a deal never missed a payment and they still phoned my place of work every couple of weeks. I find the anxiety still hard to deal with.