AIB In the €1,615 cohort but got a write-down and a split mortgage

Introuble83

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I am one if the cohert but my case is complex . I received a split in 2014 and a revised split with a write down in 2015. As I already received a write down is it likely to infringe on any redress amount awarded ? I suspect it won’t affect it but finding it impossible to get any answers from AIB. Any opinions appreciated
 
I suspect it won’t affect it but finding it impossible to get any answers from AIB. Any opinions appreciated

In all fairness, it should reduce it.

Update: User Introuble has pointed out that the Split Agreement contains a clause that any lump sum will be first set against the warehoused part. User Caragh has been told that by AIB that this is what they will be doing.

AIB is the only lender to provide write-downs of active mortgages.
They also had the most generous split.

The principle of the Central Bank redress programme is that the borrower should be put back in the position they would have been in had they been on the right rate.

If you were in deep arrears, even with the right rate, you would still have been in arrears, just less deep. In my view, this is what they should do:

1) Work out what the balance would have been had you been charged the right rate using the repayments you actually made.
2) Compare that to the current position post split and write-down.

3) Offer you the choice of the most favourable. I would have little doubt that your current position would be more favourable.

Brendan
 
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In all fairness, it should reduce it.

AIB is the only lender to provide write-downs of active mortgages.
They also had the most generous split.

The principle of the Central Bank redress programme is that the borrower should be put back in the position they would have been in had they been on the right rate.

If you were in deep arrears, even with the right rate, you would still have been in arrears, just less deep. In my view, this is what they should do:

1) Work out what the balance would have been had you been charged the right rate using the repayments you actually made.
2) Compare that to the current position post split and write-down.

3) Offer you the choice of the most favourable. I would have little doubt that your current position would be more favourable.

Brendan
Not disagreeing with your points but I still think as being part of the cohert I will be entitled to the 12%. The split will likely affect the interest calculation but I see the arrears position and the redress as two separate issues . I will have to cross my fingers and wait until July / august
 
That is not how I read your question.

There is no doubt that you will be in the cohort. The split or write-down will not affect your right to be included in the cohort.

As I already received a write down is it likely to infringe on any redress amount awarded ? I suspect it won’t affect it

The Redress will be 12% of the balance when you came off the fixed rate. Let's say that is €24,000.

If you got a write down of €30,000, in my opinion, the €24,000 should be set off against it.

But the Central Bank will probably direct AIB otherwise.

I am not surprised that you can't get an answer from AIB, I suspect that this has not been agreed yet.

Brendan
 
Thanks Brendan . It’s a messy one I know . Probably similar cases to myself and much more complex ones too . Another issue is will any potential write down go against the active or spilt portion of the mortgage. It would be more favorable to the active so as to reduce the payments but let’s wait and see
 
Hi Brendan. I am one of the lucky cohort who received the letter this morning and I want to thank you sincerely for all the work you have done to make this happen. It will make a huge difference to our family and we are extremely grateful to you and your colleagues. I phoned AIB today and the chap I spoke with confirmed that we will be getting the 12% reduction on our mortgage and the refund of interest. However, our situation is complex because we have had a split mortgage since 2014 (this was put in place arising from financial difficulties due to a redundancy and also my cancer diagnosis). I was told today by the AIB Official that the lump sum would be applied to the "warehoused" portion of our split loan. Don't get me wrong, we are delighted that this reduction is going to be applied, however, we would prefer that it were applied to the main part of the mortgage upon which we make our monthly repayments, as this would reduce the repayments by around €200 per month - but I was told that this was not an option. I did some calculations and this means that what we will repay almost €14,000 in interest over the remaining term of our mortgage so will it effectively "negate" the interest refund cheque that we are due to receive next month. It would seem that AIB are "giving it with one hand and taking it away with the other". My question is, do you think we would have grounds to dispute this and demand that AIB apply the lump sum to the main part of the mortgage instead of the warehoused part? Thank you again for all of your help and advice.
 
Before the write down

In any other country in the World, you would owe €200k today.

But as a result of the split, you owe €150k active + €50k warehouse.

AIB's split was the most generous. There is no interest on the warehouse. And there is no review.

When your mortgage term ends in 15 years, you will still owe €50k

After the write down and the refund you will no longer need the split

Let's say you are due €36k write down and €12k interest.

If they set the €36k against the warehouse, you will owe only €14k in 15 years.

Since 2014, they have written off interest on the €50k warehouse. That would balance or exceed the interest charged on the €36k writedown since 2010. So I would set one against the other and not pay a refund of interest.

But I don't know what AIB will actually do.
I suspect that they will write down the warehouse and pay your the refund.

That is still a fantastic deal for you.

Brendan
 
Hi again Brendan. I note that you moved my comment (above) to this thread because you think my question was already addressed here. However, I have read down through the comments and, although Introuble83 also raised the same question as me, I don't see any replies or answers to this. Unless I have misread or misunderstood something perhaps? Thanks
 
Apologies Brendan, I don't know how on earth I missed your reply!! Please ignore my comment above and thank you again for your advice and guidance.
 
Hi Brendan. I am one of the lucky cohort who received the letter this morning and I want to thank you sincerely for all the work you have done to make this happen. It will make a huge difference to our family and we are extremely grateful to you and your colleagues. I phoned AIB today and the chap I spoke with confirmed that we will be getting the 12% reduction on our mortgage and the refund of interest. However, our situation is complex because we have had a split mortgage since 2014 (this was put in place arising from financial difficulties due to a redundancy and also my cancer diagnosis). I was told today by the AIB Official that the lump sum would be applied to the "warehoused" portion of our split loan. Don't get me wrong, we are delighted that this reduction is going to be applied, however, we would prefer that it were applied to the main part of the mortgage upon which we make our monthly repayments, as this would reduce the repayments by around €200 per month - but I was told that this was not an option. I did some calculations and this means that what we will repay almost €14,000 in interest over the remaining term of our mortgage so will it effectively "negate" the interest refund cheque that we are due to receive next month. It would seem that AIB are "giving it with one hand and taking it away with the other". My question is, do you think we would have grounds to dispute this and demand that AIB apply the lump sum to the main part of the mortgage instead of the warehoused part? Thank you again for all of your help and advice.

On your split I suspect I have the very same contract . There is a clause In the contract that any lump sums come off the warehouse first and not the active . You would struggle to argue with them in getting the write off applied to your active account .

I am in the same boat but taking a different perspective. Whatever is left after the write down from the split, I am formally asking for it to me merged back into the active. This will increase my payments slightly but mean no lump and the end and recovery of credit worthiness
 
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Yes, you’re right Introuble83, I had forgotten about that clause. I suppose I should just be grateful for the reduction on the spilt part! Thanks for the advice and I understand what you mean about merging what’s left of your spilt back into the active. My other half and I have taken a different view on this - the remainder of the split is effectively like an interest free loan, so instead of merging it back into the active part, we are going to save the monthly amount we will need to pay off the split when the mortgage term ends. We are going to look at setting up a long term deposit account (or government bond that may pay a small yield perhaps) and diligently put the money away each month and think of it as the other half of our monthly mortgage repayment, therefore we’ll be less inclined to “dip into it”. The idea is that we’ll have the money to clear the spilt when the time comes but won’t have paid any interest and we may even make a small yield. Fingers crossed anyway!
 
Yes, you’re right Introuble83, I had forgotten about that clause. I suppose I should just be grateful for the reduction on the spilt part! Thanks for the advice and I understand what you mean about merging what’s left of your spilt back into the active. My other half and I have taken a different view on this - the remainder of the split is effectively like an interest free loan, so instead of merging it back into the active part, we are going to save the monthly amount we will need to pay off the split when the mortgage term ends. We are going to look at setting up a long term deposit account (or government bond that may pay a small yield perhaps) and diligently put the money away each month and think of it as the other half of our monthly mortgage repayment, therefore we’ll be less inclined to “dip into it”. The idea is that we’ll have the money to clear the spilt when the time comes but won’t have paid any interest and we may even make a small yield. Fingers crossed anyway!
I completely get your point of view . I would do exactly the same but if you want to trade up or take out any loans for investment properties it will affect it . It should not affect personal finance car loans etc
 
I am in the same boat but taking a different perspective. Whatever is left after the write down from the split, I am formally asking for it to me merged back into the active. This will increase my payments slightly but mean no lump and the end and recovery of credit worthiness

This is a very sound strategy.

In theory, your 5 year road back to credit worthiness will start when you exit the fixed rate.

However, AIB could well look favourably on someone who has behaved this responsibly and give you a mortgage earlier even if your credit record is tarnished.

You should also request AIB to clear your credit record immediately on the grounds that you would not have needed the split if you had been on tracker rate since the fixed rate ended.

Brendan
 
This is a very sound strategy.

In theory, your 5 year road back to credit worthiness will start when you exit the fixed rate.

However, AIB could well look favourably on someone who has behaved this responsibly and give you a mortgage earlier even if your credit record is tarnished.

You should also request AIB to clear your credit record immediately on the grounds that you would not have needed the split if you had been on tracker rate since the fixed rate ended.

Brendan
unfortunately I have a personal loan that’s heavily in arrears . I have agreed a settlement and hope you use the interest payment to clear it .
 
OK, it is obviously better to clear an interest charging loan before moving the warehouse to the active mortgage.

Brendan
 
Hi Brendan I'm wondering if you can help. I got the 1615.im ex staff. I was on a fixed rate in 2013 on one part of my mrtg.we then ran into difficulty and were on an agreement Back in 2015 I was offered a split, 3 part split...one part to write off 80k, the other part parked at 0% and the other on c & I rypts 688 p. M . However due to the ongoing issue with revenue over bik this split hasn't been put in place. I'm just wondering how this will effect me now with all this redress.Iv followed up on the revenue issue but just keep being told they are trying to resolve it .. Thanks
 
That is all you can do now. There is no obvious answer to this question.

After the 12% write down, will you still need the split?

Probably not.

Brendan
thanks Brendan for your reply. I'm not sure what part the 12% will come off, the written off part, the parked part or the active part? Also as I was staff I have 2 mrtg acs and the fixed rate only applied to one so I still have a fairly large mrtg so I will probably still need the split as I reckon the 12% will be approx 18k.
 
I still await balance adjustment. I was advised today the adjustment will come off the active portion and not the warehoused portion . This is great news (If it’s true). I will believe it when I see it .
 
I have a split (about 60/40) and they seem to have knocked approx half (of 12%) off active and half off warehoused -awaiting letter with specifics
 
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