Buy to let mortgage review after 12 years

Metatron

Registered User
Messages
63
I think Walter Odlum solicitors took a test case on behalf of PTSB borrowers on this very issue and won.
 

George12

Frequent Poster
Messages
47
I think this round of letters is more to do with the bigger picture of paying off capital. Walter Odlum focused more on the appropriate interest rate to be applied.
 

Deaneo

New Member
Messages
6
Is it a buy to let?

Does clause 7 exist?
"Clause 7: “Permanent tsb reserves the right to review the deferral of the repayment of principal at any time during the term of the loan, including the first three years of the term and may require the applicant to cease the interest-only repayment and require the repayment of principal and interest and the applicant will immediately arrange to pay the revised monthly repayment comprising the repayment of principal and interest calculated over the remaining term so that the principal and interest will be discharged within the existing term of the loan."
Yes and Yes to both questions. Who can provide me with a review of the paperwork & a definitive Yes/No?
 

RedOnion

Frequent Poster
Messages
4,286
There have been court cases over the clause. I can't see you getting much benefit from someone looking at it.

Have a look at the following thread. Someone who's been through the process you're now presented with:
 

Deaneo

New Member
Messages
6
There have been court cases over the clause. I can't see you getting much benefit from someone looking at it.

Have a look at the following thread. Someone who's been through the process you're now presented with:
Hi There,

Thanks for the info - saw it before and the person volunteered the disclosure of personal financial info which seems compulsory - again under the threat of being switched to Capitol & Interest. Depending on IF they can or cannot make such a switch will determine my response.
 

Deaneo

New Member
Messages
6
Update on my post. I contacted PTSB by phone, they were looking to see if I could repay at end of mortgage. Filled out mortgage review form, included all income, proof of sufficient savings to cover any potential loss on property, proof of 2 sales of similar property from property register. Sent it all off. They came back to me within 2 days of posting by telephone. Gave me the all clear, told me there now will be 2 year reviews for remaining of mortgage. All worked out well and they did not touch my tracker mortgage or the rate.
Happy days! :)
Hi,

I saw your post & am in the same situation - I received a similar letter with the same options. What was their focus in your communications with them by phone and did they threaten you with a switch to Capitol & Interest payments?
Thanks
 

suicra05

Frequent Poster
Messages
217
Hi,

I saw your post & am in the same situation - I received a similar letter with the same options. What was their focus in your communications with them by phone and did they threaten you with a switch to Capitol & Interest payments?
Thanks
I phoned and they were actually very helpful. They did not threaten to switch me to Capital and Interest.
 

Deaneo

New Member
Messages
6
I phoned and they were actually very helpful. They did not threaten to switch me to Capital and Interest.
Hi,

Many thanks for your reply. I contacted them (by phone) and they clarified what they needed & their position. Their focus seems to identify mortgages that are in bad shape (negative equity) and in need to additional resources in order to secure the debt(s) in question. We agreed to disagree on some issues and I await their review outcome. Like you there will be similar follow-up reviews every 2 years or so.

I also asked if PTSB are likely to encourage customers to clear mortgages & offer discounted full & final settlements? No was the current position so I suggested Management should re-consider this as an option for those who have the means...
 

Aardvark

New Member
Messages
1
Hi,
I am in a somewhat similar position having received the same letters, being 14 years in to 25 year int only trackers regarding four investment residential properties.
I filled in the forms, along with valuations from recent sales taken from the price register which showed I was at about break even, not in negative equity but not positive either. I explained that I wanted to stay on interest only and expected capital appreciation over the next 10 years to give some equity plus I would be at retirement age and intended downsizing my by then mortgage free PPR. They decided my situation was unsustainable
and have asked me to voluntarily surrender or sell all four properties! Their reason being that my loan to values are greater than 75 %. The loans were originally agreed on 80% loan to values. The loan to values are currently at their best over what they have been over the last decade so why , after 15 years without missing a payment are they being so heavy handed?
 

NoRegretsCoyote

Frequent Poster
Messages
1,309
@Aardvark

Default rates on BTL properties in Ireland are appalling. My guess is that these mortgages are not very profitable for them given the risk weights attached.

Ironically there was no point asking you to sell when the properties were in negative equity, but there is now that you are no longer underwater!

Can they oblige you to sell the properties? I am not the expert but suspect it's a bluff on their part. Once you continue to service the mortgages I doubt they will take legal action.
 

RedOnion

Frequent Poster
Messages
4,286
Can they oblige you to sell the properties? I am not the expert but suspect it's a bluff on their part. Once you continue to service the mortgages I doubt they will take legal action.
There's a clause in standard PTSB BTL contracts (clause 7) that allows them to revert the mortgage to capital & interest. That might make the mortgages unsustainable, forcing the borrower into default.
I can't find a full contract to check all the clauses at the moment, but I definitely wouldn't assume it's a bluff without checking all the clauses they're relying on.
 

NoRegretsCoyote

Frequent Poster
Messages
1,309
This article in the Times might be relevant:

The State’s former top mortgage lender highlighted this week, as it reported its full-year results, that 17 per cent of its performing mortgage book – equating to about €2.6 billion – is made up of loans doled out during the boom years where borrowers only have to meet interest payments until the loan period comes to an end. At that point, the principal falls due at once.

The bank has begun to ask borrowers how they plan to make these end-of-term payments so it can assess what level of defaults can be expected from the portfolio.

And even though borrowers may continue to meet their loan arrangements, the bank, under rules brought in following the financial crisis, may have to start classifying interest-only mortgages as non-performing loans (NPLs) if borrowers don’t come back with credible capital repayment plans.
 

Metatron

Registered User
Messages
63
Is it a buy to let?

Does clause 7 exist?
"Clause 7: “Permanent tsb reserves the right to review the deferral of the repayment of principal at any time during the term of the loan, including the first three years of the term and may require the applicant to cease the interest-only repayment and require the repayment of principal and interest and the applicant will immediately arrange to pay the revised monthly repayment comprising the repayment of principal and interest calculated over the remaining term so that the principal and interest will be discharged within the existing term of the loan."
Maybe someone should highlight the following clause under the Unfair Terms in Consumer Contracts to PTSB.
Terms which have the object or effect of being unfair, from Scedule 3, SI 27/1995:

“(K) enabling the seller or supplier to alter unilaterally without a valid reason any characteristic of the product or service to be provided”

You signed up for an interest only loan for the term of the loan! Nothing more nothing less.
 

NoRegretsCoyote

Frequent Poster
Messages
1,309
Clause 7:

may require the applicant to cease the interest-only repayment and require the repayment of principal and interest and the applicant will immediately arrange to pay the revised monthly repayment comprising the repayment of principal and interest calculated over the remaining term so that the principal and interest will be discharged within the existing term of the loan.

In theory you could be six months away from the end of the term and be obliged to repay the principal in six chunks effective immediately.

This would present anyone with difficulties, even with a mortgage out of negative equity and with solid rental income!

@Metatron 's point about unfair terms in consumer contracts here could be very relevant.
 

Leo

Moderator
Messages
11,074
Maybe someone should highlight the following clause under the Unfair Terms in Consumer Contracts to PTSB.
BTL mortgage contracts are not covered under that legislation.

You signed up for an interest only loan for the term of the loan! Nothing more nothing less.
You signed up to what you signed up for. Years later isn't the time to challenge the small print.
 
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