How did people actually "lose" their tracker mortgages?

Joeber

Registered User
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6
How exactly did people lose their tracker mortgages? Did they fall down the back of a couch in the bank!

Surely if they were on a tracker of ecb +xx and that was better than either the fixed or variable rate at the time, they would not have voluntarily switched to a different rate?

Now, I'm not a financial expert but I'd imagine that if a banking official said to me, hey Mr. Gullible, currently on your tracker rate your mortgage repayment is €900p/m but how would you fancy going on to a fixed rate for 3 years and your repayments will only increase to €1400p/m... I think I would be savy enough to not take him up on that tempting offer!

And surely if the bank wanted to switch the customer onto a different rate they would need signed contracts by the customer?

So how did people end up on higher rates without consent?

Also, the media stated in many articles that some people were 'entitled' to be on tracker rates but were on fixed or variable. How would any customer be entitled to be on a tracker rate if it was totally at the banks discretion to offer tracker rates?
 

NoRegretsCoyote

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870
I've never fully understood this . It's never been addressed in the dozens of articles I've read on the topic either.

I spent ten minutes looking through Central Bank updates on the tracker issue and there's no explanation there either.

It seems odd that tens of thousands of people failed to claim something that they were entitled to.

Someone in the industry told me that in general mortgage contracts didn't allow for a tracker, but the Consumer Protection Code (CPC) obliged banks to offer it to customers, but they never did.

Would be happy if someone could clarify though.
 

moneymakeover

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489
What happened was
At onset of the financial crisis, people on tracker looked for certainty by taking the fix option within the tracker contract

Remember Trichet raised rates about 10 times

People felt under pressure with large loans so they fixed for eg 3 years

Next the banks discontinued trackers for new customers

When the 3 years was up the individuals looked to go back on tracker

The banks said "tough", "that option does not exist"

Thus began the tracker scandal
 
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Brendan Burgess

Founder
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38,532
Here is a summary of cases I did in 2011!


There were other reasons since then.

I thought that one of the Central Bank reports broke it down into cohorts, but I may be wrong.

Brendan
 

Brendan Burgess

Founder
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38,532
I think it's important to realise that no one who started on a tracker and did nothing, lost their tracker.

To lose their tracker, the borrower had to do something and "switching" from a tracker to fix their mortgage rate was the most common.

Brendan
 

Joeber

Registered User
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6
So what about people who were "entitled" to be on a tracker mortgage?

Where does that come into it?
 

Nutso

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520
At the end of their fixed rate period, they were entitled as per the terms of their contract to revert to a tracker, however a lot of banks said that that option no longer existed.
 

NoRegretsCoyote

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870
At the end of their fixed rate period, they were entitled as per the terms of their contract to revert to a tracker, however a lot of banks said that that option no longer existed.
Not for all of the cases. As @Brendan Burgess wrote

If the document changing to the fixed rate did not specifically say that you would lose the tracker, you have a good case.
The Financial Services Ombudsman ruled in one case that the lender must give a tracker at the end of the fixed period, if the documentation did not specify otherwise.

If the lender did not explain the implications of switching from a tracker to a fixed rate, you may have a case
Most switches from a tracker to a fixed rate did not give a right to return to a tracker. However, if the bank proactively encouraged you to switch without telling you the implications, you may have a case. Complain to the lender and go to the Ombudsman if you don’t get satisfaction.
It would be nice to see a statistical breakdown of where the banks reneged on a clear contractual commitment, and where there was ambiguity or where the contract was silent.
 

notabene

Frequent Poster
Messages
358
Inquired about fixing as rates went up several times in a few months between Dec 05 and June 06 as was on contracts in work

- was told by bank and broker that the mortgage would automatically return to the tracker rate at the end of the fixed period - checked specifically with broker, bank and read the mortgage contract before fixing as I was aware of the value of it

-mortgage contract indicated similar as there as a clause saying that the rate was for the life of the mortgage - no new documents were issued when fixing other than the fixed rate sheet

- no content with in the contract specifying you would lose the rate if you fixed or if in fact any alteration was made

-only cited that a beneficial rate (.85 instead of .95) for having a specific bank account would be lost if account was closed and would revert to .95 rate

-fixed period ended, financial crisis was in the offing and bank refused to give it back & tried to change the meaning of the terms

-simple as that - fspo later ruled in my case tracker was default rate in the contract
 
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Trackman

Registered User
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31
I think it's important to realise that no one who started on a tracker and did nothing, lost their tracker.

To lose their tracker, the borrower had to do something and "switching" from a tracker to fix their mortgage rate was the most common.

Brendan
I did nothing and lost my tracker.

Never went fixed or switched banks.
 

Brendan Burgess

Founder
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38,532
I did nothing and lost my tracker.
Your case seems unusual

AIB claimed that your contract did not entitle you to a tracker and were put on one by mistake. So they put you on the SVR but without telling you.

But it underlines how many different types of case there are.

Brendan
 

Trackman

Registered User
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Your case seems unusual

AIB claimed that your contract did not entitle you to a tracker and were put on one by mistake. So they put you on the SVR but without telling you.

But it underlines how many different types of case there are.

Brendan
When admitting fault they contend they didn't act on a tracker application provided by an authorised broker(2006) thereby placing us on a SVR from draw down.

For the OP the confusion on our side came from our broker who originally stated we would start on a discounted tracker for a period of 1 year and revert thereafter.

The broker did not advise us correctly at the time.

The tracker application stated we were to remain on a tracker for the life of the loan @ xx above the ECB rate.

NB. The bank had the tracker application on file from 2006 or down the back of their couch
 
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Brendan Burgess

Founder
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38,532
I think it's important to realise that no one who started on a tracker and did nothing, lost their tracker.
My point stands. There is a widespread view that the banks just took people off trackers. Everyone who had an ordinary tracker contract and did nothing stayed on their tracker.

To lose the tracker some action had to be taken.


I did nothing and lost my tracker.

Never went fixed or switched banks.
I am completely confused. Now you are saying that you were on SVR since drawdown?

Brendan
 

Trackman

Registered User
Messages
31
The bank stated after examination that we were on a SVR from drawdown but we were not. They switched us to a SVR in 2008.

Our payment records prove this.

My point is we did nothing and ended up being transferred onto an SVR with no prior agreement or documentation to instruct the bank to do so.
 

Hopeful77

Registered User
Messages
15
There was ambiguity in the wording of a number of mortgage contracts too. When the fixed rate period was over it sometimes said they would revert to the 'prevailing rate at the time'. It didn't specify what time and now it's being said that could mean at the time of fixing in when the tracker mortgage rates were still available rather than prevailing being at the end of the fixed term when the tracker mortgage rates were gone.
 

MichelleSinead

New Member
Messages
9
I never really "lost" my tracker as I took my mortgage on a fixed rate, however when that fixed rate finished, I should have been offered the tracker rate.
I don't fully understand this myself and hence why when the tracker "scandal" came out I checked my mortgage paperwork, saw nothing about a tracker and filed it away as someone who was not affected.
In March of this year the bank wrote to me to tell me that I was affected because they didn't offer me the option of the tracker when my fixed rate ended. I still don't understand this fully, the tracker mortgage was no longer an option when I finished the fixed rate but I can only assume because it was an option when I took the mortgage that's why I am deemed as "affected"
 

MangoJoe

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127
I clearly remember seeing promotional leaflets that were being heavily marketed/promoted/circulated by the banks at the time.

The one that stuck in my head was a posed photo of a stereotypical supposedly "Irish" family made up of very attractive, Icelandic looking models.

They were in a sunny park and gazing wistfully into the blue sky where the Banks cynical marketing team had super-imposed cheerful looking buzz words in little graphic bubbles:

"Fix Now" "Security" "Peace of Mind" "Certainty" etc etc.

These people had no moral compass and no shame, thankfully they're not still out merrily making hay in our communities.
 

elcato

Moderator
Messages
3,219
I clearly remember seeing promotional leaflets that were being heavily marketed/promoted/circulated by the banks at the time.

The one that stuck in my head was a posed photo of a stereotypical supposedly "Irish" family made up of very attractive, Icelandic looking models.

They were in a sunny park and gazing wistfully into the blue sky where the Banks cynical marketing team had super-imposed cheerful looking buzz words in little graphic bubbles:

"Fix Now" "Security" "Peace of Mind" "Certainty" etc etc.

These people had no moral compass and no shame, thankfully they're not still out merrily making hay in our communities.
Sorry. If you're trying to make a case for the banks knowing that trackers were going to be so valuable then they would have given them up long before 2008. The main shame and cause of the tracker debacle was because of their action in moving away from the traditional SVR rate being between 1% and 2% above the central bank rate. Chances are no-one would have caused much grief if they had kept them at reasonable rates.
 

Foxy007

Registered User
Messages
23
For those of you who think people were choosing fixed for security, please think again. Our contract was certainly not presented as a tracker contract when we took it out........ thus we were unaware that it was a valid option / choice in very tiny print, which didn't clearly state tracker. Fix or Variable were the options presented to use in our offer letter. That is how a lot of people "lost" their tracker entitlement. The Banks write the contracts...present you with the contracts and their offer letter informing you of your options and you sign them. Unfortunately we've swung from being a country where we trusted the banks to manage our financial dealing with old school ethics to a modern system which is buyer beware basically.
 
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