General discussion of the issue (removed from public meeting thread)

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hughes

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Great exposure on Ray Darcy Rate Radio today ....well done Brendan. Listen here ..[broken link removed]
 
4 years ago, the EBS withdrew their so-called fixed-rate product. When I inquired as what was to stop them putting up their interest rate to say 10% they told me they were legally entitled to do so. Anyway, I panicked & fixed at 5.65%. Six months later they reintroduced their fixed rate, I guess job done as far as they were concerned.
You see, when you sign a mortgage here in Ireland you are in effect acting as guarantor to the banks other "investments".
How this works is the bank bundles a chuck of mortgages together and uses them as collateral to borrow money from German and French banks. The reason these mortgages are so valuable to Banks is because of the magic words on the mortgage "the bank may increase rates from time to time given market conditions".
Apparently both the financial regulator, nor the central bank see anything wrong with this.
Take me for instance. Ted McGoven of EBS borrowed over a Billion euro to which he gave away to some "high net worth" individuals.
Of course the collateral was made of cards and NAMA had to take on the bad loans.
What EBS customers did not realize is when we signed a mortgage contract with EBS we were covering Ted's losses.
How the exchequer got us to do that was subsidize AIB's tracker book.
If there was a way to legally prove that a mortgage contract cannot be used as collateral for other lending by a bank.
In the EBS's case, they could not have accessed their developer loans without using mortgages as a guarantee to the loans, and since I did not give permission to the EBS to use my mortgage as a method for them to take on monster loans then I believe there is a case against either the financial regulator for allowing this to happen, or the EBS. (Examine your mortgage contract an see if you have given the bank permission to use your mortgage to guarantee their other loans.
Forget about going down the SVR rate reduction route, cut to the chase and take a class action suite against the banks and financial regulator.
What do ye say
 
I don't think so, at least it was not my intention.
The Millar's are disputing the wording and are trying to imply that when they took out their mortgage on your bog standard VR it was expected by all who signed up for those mortgages at the time that rates would roughly follow Central Bank (or to become ECB) in their attempt to stem inflation. The wording in the mortgage contract was vague to say the least, and their case is based around that "vague-ness".
What I am on about is the EBS took out loans from European banks and used my mortgage contract with them as collateral.
I got a letter back in 2003 from the EBS which stated my mortgage was been "Amortalized" or something which sounded like that, which in effect meant my mortgage was been bundled with other SVR mortgages and was used as a financial instrument, (In the EBS's case collateral), to acquire funding it would not normally have access to.
Typically banks back then relied on deposits to fund loans. Now back in 2003 the EBS used my mortgage to borrow money I did not give it permission to do.
What I am saying here is completely different to vague wording on mortgage contracts. This is all about someone else taking on a loan with your acting as guarantor without your permission.
BRAND new case. and very much falling in the remit of the financial regulator.
Regards
 
Here is an email i sent in 2013, not that i got any response!
_______________________________
From: Bill <xxxxxxxxxxxxx>
To: "[email protected]" <[email protected]>
Cc: "[email protected]" <[email protected]>; "[email protected]" <[email protected]>
Sent: Thursday, 25 April 2013, 11:59
Subject: EBS Mortgage interest rate hike !


Re: EBS mortgage interest rate hike! Scandalous!

Dear Michael,

Shame on you Sir and your party, to stand idly by whilst you allow EBS & AiB gouge more profit out of hard pressed young families !

How much more strain do you think we will put up with ? We are not stupid and we know the government could greatly influence and prevent this increase if the will was there from the government !

Your leader Gilmore has the cheek to rub salt in our wounds with his rubbish about "commercial decision" ! How stupid does Gilmore think we are! Those banks exist only because the people bailed them out !

This will be remembered ! I dont expect a reply as cowards always hide when faced with the truth about their dishonesty !

Bill Xxxxxxxx .
 
Ken NALLY said:
Thanks for raising awareness about this Brendan and thanks for the suggestions - good piece on Prime Time tonight - have regularly emailed senior government ministers re this and other inequities over the past number of years - will send more emails tomorrow - we are in negative equity and have SVR mortgage with BOI - seeing as we cannot switch are we not at a disadvantage in terms of accessing any limited competition in the market place - surely this is a counter argument to the central bank and government's argument about not.
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It seems to me that you have three options:-
  1. Pay down your mortgage like your life depends on it so you can get out of negative equity and re-finance your mortgage with another lender at a better rate;
  2. Default on your mortgage; or
  3. Ring Joe Duffy (or meet with others in a similar situation) and have a whinge about the unfairness of it all.
I am conscious that this post sounds facetious but, frankly, what else can you do?

For the record, I have zero problem with anybody that walks away from a mortgage if it no longer makes sense for them financially to continue to make payments, even if they can afford to do so. I suspect most people would have a moral problem with this view.
 
"I dont expect a reply as cowards always hide when faced with the truth about their dishonesty !

Bill Xxxxxxxx ."

Snigger! You couldn't make it up!
 
I think you are all wasting your time. Please read the two articles from the Independant that I've posted on the other bank thread. Europe is dictating here and PTSB have no choice in the matter

The deal approved by Europe also includes a commitment by the bank to maintain its income ratio at targeted levels. That will be a worry for PTSB customers campaigning for a cut to the cost of their standard variable rate mortgages, which carry interest rates of around 4.5pc which are a multiple of the cost of servicing tracker loans.
 
I wrote to Brian Hayes MEP and in fairness to him he came back straight away with a reply. What he is looking to do is to get the ECB to take over the trackers. Can't see this happening, though it makes some sense, but thought I would post it for info.

I'm actually doing quite a lot at the European level in highlighting this absurd position for those on variable mortgage products in Ireland . My proposal which I have made to the ECB is that they would take over the trackers, which is the reason why those are variable mortgages are being fleeced. This is a big ask but something that I'm pursuing. I'm also doing what I can to put pressure on the banks - AIB were first to move. But much more needs to happen. Brian
 
Bronte said:
I think you are all wasting your time. Please read the two articles from the Independant that I've posted on the other bank thread. Europe is dictating here and PTSB have no choice in the matter

The deal approved by Europe also includes a commitment by the bank to maintain its income ratio at targeted levels. That will be a worry for PTSB customers campaigning for a cut to the cost of their standard variable rate mortgages, which carry interest rates of around 4.5pc which are a multiple of the cost of servicing tracker loans.
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Raising awareness of the injustice at the heart of this issue is not a waste of time in my view. Alot of elected representatives and others have advocated for the need for banks to respect the rights of tracker mortgage holders and those in mortgage arrears or at risk of repossession. While this is all perfectly fine and understandable my difficulty is that very little is being said in relation to the relatively small cohort that are picking up the cost of same. And this is a little too convenient for the politicians in my view. If they are prepared to endorse, permit or simply tolerate the placing of this additional burden on SVR mortgage holders then I for one would prefer it if they were compelled to say so publicly. That way I and my partner and our family and friends will know who will represent our best interests come the general election. If this campaign can keep the spotlight on this issue in an election year then who knows what it could achieve.
 
James Kelly said:
I wrote to Brian Hayes MEP and in fairness to him he came back straight away with a reply. What he is looking to do is to get the ECB to take over the trackers. Can't see this happening, though it makes some sense, but thought I would post it for info.

I'm actually doing quite a lot at the European level in highlighting this absurd position for those on variable mortgage products in Ireland . My proposal which I have made to the ECB is that they would take over the trackers, which is the reason why those are variable mortgages are being fleeced. This is a big ask but something that I'm pursuing. I'm also doing what I can to put pressure on the banks - AIB were first to move. But much more needs to happen. Brian
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I'm afraid Brian Hayes is assuming that his proposal (that the ECB take performing tracker loans onto its balance sheet) would substantially improve the financial position of the banks. It wouldn't.
 
seanie said:
My idea is basically the formation of a Home-Owners co-operative.

The function of this organisation would be to represent the interests of its members (mortgage holders) on a collective basis when dealing with lenders; particulary around interest rates and mortgage types.

Essentially, it would operate under the same principles underpinning a buying group that negotiates prices and terms with its suppliers. So instead of the suppliers (in this case the- lenders) setting the price (in this case -interest rates) without reference to its customers, they would be forced to do so given the collective strength of the buyer (in this case the members of the co-operative/mortgage holders). Or the co-operative could potentially seek the best deal possible for its members and deal with whatever bank.

You only need to think of the power that Dunnes Stores has over its suppliers where they set the price and state what they are prepared to pay.

The legal structure for such an organisation could be a Company limited by guarantee without share capital. Membership cost would be a tiny sum, thereby potentially attracting huge numbers of mortgage holders who would have nothing to loose by joining. The more members, the greater the negotiating power.

Is an idea such as this credible or possible? It seems unbelieveable that banks can keep raising variable interest rates at a time when the wholesale rate is so low, driving already struggling mortgage holders further into the ground. Their profit margins are excessive and their "solution" of increasing the term of the loan is only a solution for the bank. In fact an increase in the term represents a bonanza for the banks, thanks to the increased interest that they will reap over the extended term. At the very least the interest rate should be decreased if the term is longer given that the loan becomes more profitable. Perhaps a Home-owners co-op could have a role here also.


A Co-operative such as this could also demand non-recourse mortgages for its members! Imagine if all future mortgage business was conducted through this organisation. The banks would have no choice but to provide the customer with the type of mortgage that they want and are prepared to purchase.

Would love to hear this idea explored at a public meeting.

Thanks all!
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This is a great idea .
 
Just watched the prime time video in rte player. One question. Are there many more trackers than SVR mortgages? I now think it would be very hard to pleasure both ends.....
 
Galego said:
Just watched the prime time video in rte player. One question. Are there many more trackers than SVR mortgages? I now think it would be very hard to pleasure both ends.....
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We need to stick to the core issue here which is the well established injustice by all banks to the variable rate mortage holders. The solution we must seek is a substantial reduction in our interest rate.
 
dgray_ie said:
Keep up the good work, I have a SVR mortgage with BOI @4.25% - this needs to change, otherwise Im for switching! - I will try my best to attend.
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If you can secure a lower rate by switching to another provider then you should go ahead and do so.

What are you waiting for?
 
Sarenco said:
If you can secure a lower rate by switching to another provider then you should go ahead and do so.

What are you waiting for?
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Switching involves legal / valuation costs. Also carries the risk that new bank will hike up svr rates at future date without jusification.......back to square one ! The key issue is that banks are being allowed to exploit a segment of borrowers who are now seeking protection from central bank or Government or EU.
 
hughes said:
Switching involves legal / valuation costs. Also carries the risk that new bank will hike up svr rates at future date without jusification.......back to square one ! The key issue is that banks are being allowed to exploit a segment of borrowers who are now seeking protection from central bank or Government or EU.
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Many lenders will meet most, if not all, of the costs of switching. If it makes financial sense to switch mortgage providers, then that is precisely what a borrower should do.

If a new lender ceases to offer the cheapest rate, then the borrower should switch again.

Our market based system relies on competition. Banks rely on consumer inertia in setting uncompetitive prices accross their product ranges. Consumers should always take the initiative and switch providers whenever it makes financial sense for them to do so.

If consumers fail to switch providers, when it is in their financial interests to do so, then they have no grounds to complain. I would strongly disagree with your approach of encouraging consumer inertia simply to advance your agenda.

I also disagree with your analysis of the key issue as being some form of "discrimination". The key issue, it seems to me, is that the cost of credit in Ireland is simply too high.
 
Sarenco said:
Many lenders will meet most, if not all, of the costs of switching. If it makes financial sense to switch mortgage providers, then that is precisely what a borrower should do.

If a new lender ceases to offer the cheapest rate, then the borrower should switch again.

Our market based system relies on competition. Banks rely on consumer inertia in setting uncompetitive prices accross their product ranges. Consumers should always take the initiative and switch providers whenever it makes financial sense for them to do so.

If consumers fail to switch providers, when it is in their financial interests to do so, then they have no grounds to complain. I would strongly disagree with your approach of encouraging consumer inertia simply to advance your agenda.

I also disagree with your analysis of the key issue as being some form of "discrimination". The key issue, it seems to me, is that the cost of credit in Ireland is simply too high.
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Hi Sarenco,

you make some insightful points so please can you advise on the following;

a) which banks will cover all the costs for switching? i have not managed to find a bank in Ireland that is prepared to do this.

b) which banks banks are prepared to accept you if you are in negative equity?

My situation is not unique and is reflected by the very existence of these threads.

This is the reality at the coalface.

Danske are charging their customers 4.95% because they know they can, as are the other banks.
 
Sarenco is correct is that the main issue is that all lenders are charging too much. The focus of the campaign should be on getting all banks to reduce the rates being charged towards the average Eurozone mortgage rate.

The fact that banks are charging new customers less than existing customers is an important issue as well, but it is a secondary issue. For example, if the Central Bank found this practice to be in breach of the Consumer Protection Code, and the lenders made their best rates available to existing customers, that would be a step in the right direction, but it would not solve the problem. Eureka would still be paying 4.95% to Danske and even the cheapest loan, 3.55% from KBC would still be too dear.

Brendan
 
Eureka101 said:
Hi Sarenco,

you make some insightful points so please can you advise on the following;

a) which banks will cover all the costs for switching? i have not managed to find a bank in Ireland that is prepared to do this.

b) which banks banks are prepared to accept you if you are in negative equity?

My situation is not unique and is reflected by the very existence of these threads.

This is the reality at the coalface.

Danske are charging their customers 4.95% because they know they can, as are the other banks.
Click to expand...

In response:

A) BoI, KBC and PTSB all offer a generous allowance that would cover most, if not all, of the costs of switching;

B) None, obviously - why would any lender advance a mortgage that was not fully secured on the underlying property?

Danske's SVR rate is particularly egregious. Personally, if I was in very significant negative equity I would seriously consider defaulting.
 
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