Update may bring resolution for borrowers, writes Emma Kennedy
On Thursday, the Central Bank will issue a further update on its long-running tracker mortgage probe, with thousands of mortgage borrowers likely to be keen to get some resolution once and for all.
The
ongoing examination of lenders’ treatment of tracker mortgage customers stems from an overcharging scandal – and subsequent redress scheme – that emerged at Permanent TSB this time last year.
The market-wide tracker investigation hinges on a number of key issues, such as whether lenders breached the contractual rights of thousands of customers by failing to offer them a tracker mortgage at the end of a fixed rate period. In a scenario where a mortgage customer was not offered a tracker rate by a bank, despite being contractually entitled to such a rate, they would have ended up paying over the odds for many years.
Long before news broke of
the Permanent TSB problem, there were already concerns in Dame Street about issues with tracker mortgages, dating back as far back as 2008. That year, the regulator’s then consumer director, Mary O’Dea, warned mortgage lenders to act in the best interests of their customers when providing advice on switching tracker mortgages to fixed or variable rate mortgages. “Lenders should fully disclose the short, medium and long-term effects of switching to each consumer,” she said.
Regulatory sources suggest that trackers had been on the radar since then, but it wasn’t until months after the Permanent TSB issue emerged that the Central Bank decided to push the button on a wider investigation of tracker mortgages.
Hopefully Thursday’s update will bring some resolution for affected borrowers, but the clock is ticking.
According to documents obtained by The Sunday Business Post under Freedom of Information legislation earlier this year, the Central Bank is concerned that tracker mortgage customers affected by lenders’ errors could run out of time to make complaints, and has flagged its concerns to the Financial Services Ombudsman.
The confidential documents revealed that concerns over “customers being time barred” were one of a number of tracker-related matters discussed at a meeting between high-ranking representatives of the Central Bank and the Financial Services Ombudsman (FSO) in May.