Central Bank publishes comprehensive - ish update on tracker review

Bronte

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13,239
Questions for the Central Bank which those affected want to know

When the lenders identify cohorts which were not affected - did you approve those decisions? (For example AIB has a lot of customers who were entitled to trackers at the then prevailing rate when their fixed rates expired. AIB did not offer them rates. But now argue that if they had offered them trackers, they would have been at a rate higher than the SVR, so they were not affected.)
How did AIB decide on a tracker rate higher than the SVR?

Does the CB Accept that reasoning.

I don't understand you using the word 'retrospectively' ? Does that mean they deliberately plucked a rate in the present to say this is the rate which would have applied at the time?

Is that rate similar to prevailing rates in Bank of I and PTSB.
 

Bronte

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The CB has just added three new documents to the website:
I see the boys in the CB Are still reading AAM!

Is there a division in the figures to see the difference between overpayment refunded and compensation?

How much can a customer get in order to pay for independent kegsl advice? That kind of thing does not come cheap.
 
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Brendan Burgess

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I don't understand you using the word 'retrospectively' ? Does that mean they deliberately plucked a rate in the present to say this is the rate which would have applied at the time?

Is that rate similar to prevailing rates in Bank of I and PTSB.
Bank of Ireland is not affected by this issue. They did not issue mortgage contracts which did not specify the margin.

permanent tsb and AIB issued fixed rate contracts which said "when the fix is over you will be entitled to a tracker at the then prevailing rate"

Although ptsb were no longer issuing trackers to new customers, they offered those borrowers whose fixed rates expired tracker rates of 3.25%.

AIB did not give the borrowers the tracker option, as they were no longer doing trackers. Now, years later, AIB is saying "We should have offered you a tracker. But if we had done so, it would have been at 3.67%".

So ptsb set their prevailing rate at the time. AIB set it retrospectively.

I personally think it's very hard to challenge ptsb on this issue, although Padraic Kissane and others take a different view. It's discussed at length in the thread on the issue. However, those who broke out of their fixed terms early, have a great case for getting the lower rate prevailing at the date they broke out of their contract. ptsb is putting them on the rate prevailing when their contract was due to end.

In my view, the AIB case is not defensible by AIB. By definition, you cannot set a prevailing rate 4 years later. They should take the last rate on offer to new customers.

The Central Bank has not commented on it but has approved the refund schemes of AIB, so it is presumably, approving it by its silence.


Brendan
 
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Wardy7

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Although ptsb were no longer issuing trackers to new customers, they offered those borrowers whose fixed rates expired tracker rates of 3.25%.
But they didn't Brendan?? I'm confused, purely because I know that you know what your talking about.

They didn't offer any tracker rate.....obviously until July 2015?
 

Brendan Burgess

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Hi Wardy

That is the essential difference between AIB and ptsb which I think that those affected by ptsb seem to miss.

Most people who had these contracts, did not break out of them early. They went to the end of term and then ptsb offered them a tracker at the then prevailing rate.

So, ptsb actually had a prevailing rate. You might not like the rate. But they had one at the time.

AIB did not have a prevailing rate, so they set it retrospectively.

Brendan
 

Somar

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Brendan

I was offered a tracker rate of 2.35% on top of ECB rate by PTSB in March 09 after expiry of 2 year fixed rate.
The rate was then higher than the other rates on offer by PTSB.
No mention of this rate or a prevailing rate in original contract.
Are PTSB entitled to set these rates and if so how do they calculate them as it would appear to me they were cleverly calculated to induce customers off trackers?
 
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Wardy7

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Oh right. I see what you mean now. I broke early so I was never offered the tracker.

Thanks for clarification! (I knew there had to be an explanation!!)
 

Milo4444

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Brendan

Did FA have a prevailing rate in March 2009 or should it revert to original home loan tracker rate?
 

delsalmon

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Ptsb. Approved mortgage April 07.
December 07 moved in and drew down.
April 09 broke out of fixed rate which would have expired December 09.
I'm on 3.25% + ECB.
If by reading above comments I may have a chance of fighting the rate.
Does this mean I should be on the tracker rate of April 09?
And if so what is the rate for April 09?
 

Brendan Burgess

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Are PTSB entitled to set these rates and if so how do they calculate them as it would appear to me they were cleverly calculated to induce customers off trackers?
Hi Somar

Variable mortgage contracts allow the lenders to set the mortgage rates.

A lender who offers tracker mortgages is entitled to set the tracker margin at whatever rate it likes for new customers.

ptsb will argue that it was entitled to set the margin for customers whose fixed rate expired at any level it liked.

I have not yet seen a well documented counter argument to that. There may be one, but I just haven't seen it. There is talk of a legal case on the issue. Before a legal case is taken, a very coherent argument will have to be developed. I would love to see such an argument.

Brendan
 

Brendan Burgess

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Brendan

Did FA have a prevailing rate in March 2009 or should it revert to original home loan tracker rate?
That is a completely separate issue. As far as I know, FA's contracts specified the tracker rates. If you have a question on this, start a new thread and give the full details.

Brendan
 

Brendan Burgess

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Does this mean I should be on the tracker rate of April 09?
ptsb have put all these borrowers on the rate at the time the tracker was due to expire.

However, I think that a court would rule that this is the wrong rate and would give you the rate when you broke out early.

The rate in April 2009 was 2.25%

http://www.askaboutmoney.com/threads/what-do-do-if-your-tracker-rate-is-ecb-2-25-or-ecb-3-25.195425/

I think that this is a much stronger case than the general "the tracker rate is too high" case.

Brendan
 
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Wardy7

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Brendan do you know what the PTSB rate was in January 2009?
 

Somar

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Hi Brendan

Thanks for your response on the "manufactured" rate issue.
When is this legal case you referenced on this issue due before the courts??
If the rate in April 2009 was 2.25% and increasing to over 3% later that Summer before PTSB stopped offering trackers then how could my rate in March 09 possibly be 2.35%?

PTSB used these "manufactured" rates to keep their tracker rate slightly higher than their SVR so as to induce customers off their trackers. Of this I am convinced but proving it will be a huge challenge. When ECB starting dropping ECB rates big time, PTSB and others stopped offering trackers of course!!!

I would also like to know the PTSB margin rate above the ECB for Jan and Feb 2009??

Are the rates different for each customer, surely not, how are they calculated??
 

Brendan Burgess

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If the rate in April 2009 was 2.25% and increasing to over 3% later that Summer before PTSB stopped offering trackers then how could my rate in March 09 possibly be 2.35%?
Was yours a buy to let property? I quoted the rates for home loans. I think that buy to let were 0.1% higher.

When is this legal case you referenced on this issue due before the courts??
I don't know. I gather that some borrowers have issued legal proceedings, but I don't know if it's gone any further than that. I don't know if it will either. I am not involved.

Are the rates different for each customer, surely not, how are they calculated??
The rates are not calculated as such. They are at the discretion of the lender unless the margin is specified in the mortgage contract.

Brendan
 

Stitcher

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136
I was offered ecb + 2.25 by ptsb in Jan 2009 as follow on to my "discounted tracker" which i thought should have reverted to ecb + 0.8% after the discount period (0.6% for 1 year). Their special clause 9 mentioned moving to the " then current tracker rate" which was confusing and misleading and not fully explained. The offered 2.25 % tracker was higher than all other rates so i took the cheaper variable under duress. Case with CB at the moment. Am told i may have a response by June (as Feb date for a response has now been postponed).
 
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Freshstart

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It's also worth bearing in mind that when Padraic spoke to the finance committee he had cases with a variety of contracts. He had virtually identical contracts none of which stated a rate and had all been returned to between 1.1% and 3.25%. This would certainly need explaining in my opinion!
 

Somar

Registered User
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33
Hi Stitcher

What contact did you use in CB, to put your case forward?
Is Padraic Kissane looking after it for you?
Whom has informed you that you will have a response in June?

Listening to Padraic speaking in the Oireachdeas it would seem he has his research done on this margin issue and will put forward a strong case against PTSB.
 
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