Any chance of Banks "wriggling out" of trackers ?

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RMCF

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If only a couple or a few of the banks renege on tracker mortgages, it will look really bad from a PR point of view. Can you imagine the backlash and anger from customers if they find out that their bank is cancelling their tracker mortgage while other banks are not changing their tracker deals. There would be a lot of coverage in the media too which could seriously discourage potential customers from choosing the banks which decided to renege on the tracker deal.

Banks need to think strategically and not just about existing customers!
But legally can banks actually renege on their contract with you?

Would you not be able to thake them to court if they did?

I currently owe approx €75k - I will switch to a variable or fixed rate if they take €30k off my capital;)

As another poster has just mentioned, those of us on trackers are at a disadvantage if we decide to move. I was thinking of self build or possibly buying in the next 3 or 4 yrs, but they surely would use this desire to get people out of their trackers?
 

callybags

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How can you be at a disadvantage if you are on a tracker rate and want to move?

All that will happen is that you will go on to a standard variable rate.

What are you at a disadvantage against?
 

Mixednuts

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Well for me it means going from 1.8% to 4.0% ... that's a big jump , I could afford it but have to factor in all the other costs that come with moving home
 

Paulk

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But legally can banks actually renege on their contract with you?

Would you not be able to thake them to court if they did?
This is the million dollor question right now! I would have thought that the answer is a firm no ie they cannot renege on their contract with you.

I can't see just a couple of banks getting away with reneging on their tracker deals. I think it will be a case if one bank does it, they will all follow. Otherwise, none of the banks will be successful in cancelling current tracker deals.
 

serotoninsid

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I said that my other alternative was to put the funds into a competitor bank, on deposit paying more than the rate I am paying for the Mortgage.
Surely your savings should simply be in whatever account gives the highest return currently regardless? That's what i'm doing - and thanks to the AAM key post on savings rates, its very easy to determine what offers the best value when going from one fixed term deal to another.
 

Mixednuts

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Somebody has been reading askaboutmoney.ie

quote;
He says the question really was whether any of the banks that have ECB tracker rates will try and look at the fine print of the mortgage contracts which might allow them some "wriggle room", Mr Oakes said on RTE's 'Morning Ireland'.

"wriggle" hey that's my word ;)

But on a serious note , anyone any suggestions or angles the banks might take to get out of trackers with it's customers .
 

OakesP

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Somebody has been reading askaboutmoney.ie

quote;
He says the question really was whether any of the banks that have ECB tracker rates will try and look at the fine print of the mortgage contracts which might allow them some "wriggle room", Mr Oakes said on RTE's 'Morning Ireland'.

"wriggle" hey that's my word ;)

But on a serious note , anyone any suggestions or angles the banks might take to get out of trackers with it's customers .

I have to say I had no idea of this discussion when I did the radio programme on Morning Ireland. A friend called me today (18/04/2010)about this thread. So sorry to say I did not borrow anyone's wording. I used 'wriggle room' in the UK press about a year and a bit ago on the same topic. But I am glad that more than one of us reached the same conclusion .

All those with ECB tracker mortgages should read the mortgage documentation first and foremost. A lot of these agreements allow - in certain circumstances - the substitution of the ECB rate for another rate. Thus if that other rate is higher (which it will need to be for the bank to elect to switch) , the bank (if it could pull it off) would be able to effectively raise the interest rate suffered by the borrower. However I suspect that all those with ECB trackers will argue that the bank informed him/her verbally that the rate was ECB for life. I should expect the courts would entertain this evidence based on the parole evidence rule, the creation of a collateral contract or estoppel (i.e the bank cannot argue that the Manager's statement is outside the written contract). Furthermore I should think that the FSO will give a sympathetic hearing a borrower in these circumstances too.

Since I made that statement, off the cuff, a number of people have contacted me with stories about how their banks have approached them to move off their ECB tracker. Now whether this is a formal and clear bank policy (and instruction) or the actions of specific branch managers is not yet clear.

Peter Oakes
 

serotoninsid

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However I suspect that all those with ECB trackers will argue that the bank informed him/her verbally that the rate was ECB for life. I should expect the courts would entertain this evidence based on the parole evidence rule, the creation of a collateral contract or estoppel (i.e the bank cannot argue that the Manager's statement is outside the written contract). Furthermore I should think that the FSO will give a sympathetic hearing a borrower in these circumstances too.
Ok, well this is positive. Does anyone still have any of the marketing blurb for any of these tracker deals from any of the banks? I know when I went to NIB, they gave me promotional stuff on their LTV tracker but I don't tend to read marketing type stuff as it tends to be misleading! Would be good to check if it inferred ECB+X% for the duration of the mortgage...
 

twofor1

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Another positive in an article in today’s Business Post about banks wriggling out of trackers.

In it a spokesperson for the Financial Regulator says read your terms and conditions and see what is permitted, and refers to the Consumer Protection Code which states that;

‘’A regulated entity must ensure that all information it provides to a consumer is clear and comprehensible, and that key items are brought to the attention of the consumer. The method of presentation must not disguise, diminish or obscure important information’’
 

OakesP

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I cannot post the link to today's Sunday Business Post by Kathleen Barrington because I have not posted 15 times (its a rule of this site). Would someone else please post it - if you don't have it, email me and I will send it to you. It is worth reading first hand.

In the article KB cites an unnamed bank employee confirming to her that his/her bank and others are looking at ways of getting borrowers off ECB trackers.

The statement from the regulator (quoted immediately above in ‘twofor1’s” psoting) is encouraging but it is a stock/library answer, just like the FR's former 'overcharging press releases' and promises by their former senior executives that firms must comply with the Code or be sanctioned for overcharging issues (then Elderfield joins the FR and basically criticises the regulator’s past action – and those of firms – for dragging their heels on this issue). I think the other quote from the FR in the SBP article is more relevant that this ‘‘would appear to be a matter of contract between the provider and the consumer, and customers should carefully examine their terms and conditions to see what is permitted under their contract’’.

The fact that the issue is addressed in the legal documentation does not mean it is obscured. I certainly don't want to raise undue concern here at all. I am suggesting that those with trackers read both their mortgage documentation and any marketing documentation provided at the time of the loan being taken. If in doubt write to your bank to request the information and go one step further - ask the bank to reconfirm the promise you believe was made if after reading your contract documentation you think there is a conflict. I see 'Mixednuts' is writing to his bank, so why not follow that lead if you do not have the material?

If the bank does not respond or seeks to charge you a fee for the information or otherwise frustrate your request, respond by informing it that you file a section 4 Data Protection Act 'Access Request' for a copy of all personal data it holds on you. The bank can only charge €6.35 to action the request and many do not because of the cost of processing such a low value amount. The bank will soon get the message and had over the specific loan documentation you have requested or be faced with a very costly exercise of having to give you a copy of all your personal data within the provisions of the DPA. [Separately, I can inform from personal experience where I advised an institution which thought it could ignore an Access Request because it did not refer to the relevant section number in the DPA that if it wanted to tick off the customer and the Commissioner got involved, it was looking at €15,000 in costs to eventually comply. Guess what they did – yep they gave the person the specific requested information to avoid a general disclosure requirement].

A cheap and most simple way to perhaps put this tracker (and any ancillary LTV) issue to bed is as per the link on -
http://complianceireland.com/Press.html#Banks_ECB_Tracker
- 'we should expect that the Irish Banking Federation (speaking on behalf of the banks) or the banks themselves to give a commitment to borrowers on ECB trackers that the banks will not seek to alter the promises made to consumers despite any fine print in the mortgage contracts.' [disclosure – this is my website]
 
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T

theclassic

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Tracker Mortgage holders could create a group to institate Legal Action

twofor1 - my tracker is with AIB & states the terms are ECB +.6% unless there is a 'material change' in the mortgage. The terms & conditions, such as they are, are set out on 1 no. page letter and at first glance appear very straight forward.
In any event I think the financial insitutions went into the tracker mortgage option with their eyes open & we the customers entered into the deal based on the 'ordinary meaning' of the terms & conditions.

In my particular instance it was & still is my understanding that the terms pertain unless I change the terms to a significant degree (or materially) eg not paying back, or getting a top-up amount or using the property as calatoral in another deal, or agreeing to come off the tracker rate.
As far as I am concerned the bank entered into an agreement with me, and if I do not materially change the terms of same, then it holds.

If the bank argue that the deal was predicated on a certain LTV then I will most certainly be arguing that whilst that may have informed part of their assessment when deciding if they should offer me a tracker, the final deal as presented to me in a 1 page letter is not linked to such a formulae: I entered into the deal based on the terms & conditions as set out in the letter of offer not on their assessment.

In any event I think our current regulator would not allow the institutions dupe customers in such a fashion. I think he is the Real Deal.

I will not allow AIB renage on our deal & take me of the tracker rate. I think if moves are made by the financial institutions to renage on the tracker mortgage deal based on a slight of hand, then there would certainly be merit in establishing a group to fund and instigate Legal Proceedings / Class Action.
I would be willing to donate a few hundred to a properly formulated and constituted group of persons in a similar situation & I hope there are others.

In my view the value of being on a tracker can me measured in tens of thousands of euro & in a certain peace of mind - these are worth trying everything to protect.
 

Mixednuts

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Noone can, just yet — the online edition of the Sunday Business Post isn't available until 6pm.
The binding document is the loan agrement which you would have signed in the presence of your lawyer and been given a copy of at the time. Surely you've held on to such an important document?

I have all documentation for my mortgage safely put away , but I was on a fixed term for 5yrs , when it ended I wasn't happy with variable rates been offered , argued my case and was offered a tracker package ( which was much better ) at .8+ecb .
That was all done over the phone in 2007 , I then just got a single page letter (which I have)confirming my new rate and payments.

What I will be asking PTSB is the T&C for my current package.
Am I guilty of been to naive ?, and should have asked for a copy/new contract when I first started out on the tracker?
If I am then there must be thousands of me out there .
I am not gonna panic til I see what PTSB say/send me.

OakesP,
Excellent advice on freedom of information , thanks . Least now I know how to approach and what methods are needed for same .
 

OakesP

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Noone can, just yet — the online edition of the Sunday Business Post isn't available until 6pm.
The binding document is the loan agrement which you would have signed in the presence of your lawyer and been given a copy of at the time. Surely you've held on to such an important document?
The SBP does not upload in full until 6pm but the article I refer to is there now in all its glory. The easiest way of finding it in the absence of me not being able to post it to the group is to go to SBP's website; search on "peter+oakes" and the article from today's edition by Kathleen Barrington is there. Perhaps one of you guys who can post weblinks will copy the link and paste it to the group?
[I also placed a pdf of the article on the press page of my business website as per previous posting - again I could not insert the hyperlink in full because of this site's 15 post rule - which is understandable and fair enough]. I emailed the SBP link to MixedNuts earlier - he/she might post it?
 

Mixednuts

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Noone can, just yet — the online edition of the Sunday Business Post isn't available until 6pm.
The binding document is the loan agrement which you would have signed in the presence of your lawyer and been given a copy of at the time. Surely you've held on to such an important document?
The SBP does not upload in full until 6pm but the article I refer to is there now in all its glory. The easiest way of finding it in the absence of me not being able to post it to the group is to go to SBP's website; search on "peter+oakes" and the article from today's edition by Kathleen Barrington is there. Perhaps one of you guys who can post weblinks will copy the link and paste it to the group?
[I also placed a pdf of the article on the press page of my business website as per previous posting - again I could not insert the hyperlink in full because of this site's 15 post rule - which is understandable and fair enough]. I emailed the SBP link to MixedNuts earlier - he/she might post it?

here's the link

http://www.thepost.ie/story/?jp=eyidgbcwsn
 

Paulk

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My loan offer has statements like "the rate may vary before the advance is drawn down and will be subject to variation throughout the term."

Statements like these are slightly worrying, but surely a solicitor should/would have highlighted this if she thought it should be an issue of concern?
 

wirelessdude

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My loan offer has statements like "the rate may vary before the advance is drawn down and will be subject to variation throughout the term."

Statements like these are slightly worrying, but surely a solicitor should/would have highlighted this if she thought it should be an issue of concern?
to me, this refers to ECB rate going up and down
 

Marion

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House Insurance

People should ensure that they insure their house at least for the value advised by the lender at the time the tracker mortgage was taken out.

Failure to do so could render the contract void.

Marion
 

Mixednuts

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People should ensure that they insure their house at least for the value advised by the lender at the time the tracker mortgage was taken out.

Failure to do so could render the contract void.

Marion
Good point .I currently have my house insurance and mortgage with Ptsb .
Even if they have both figures (ie) valuation&insured amount , I am sure they would use it as a technicality to get out of tracker agreement .
 

serotoninsid

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People should ensure that they insure their house at least for the value advised by the lender at the time the tracker mortgage was taken out.

Failure to do so could render the contract void.

Marion
Is this why NIB sent a letter out for proof of insurance some months ago?
I've just had a quick look through some of my paperwork from them following my switch to nib from ub 3 years ago. Just realised that the valuation at the time indicated a rebuild cost in excess of what i have been insuring it for. I didn't realise the valuation HAD indicated a rebuild cost. Insurance coming up for renewal shortly. I guess I better revert to rebuild cost indicated by valuer...

By the way, rebuild cost seems excessively high in proportion to total valuation (92%) - maybe this is what nib indicated they wanted from their shortlist of approved valuers??
 
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