EBS EBS - Lost tracker incorrectly, but had sold property as it was unaffordable on SVR

Dpdp01050842

Registered User
Messages
81
Hi All. A bit of a tricky one here. I purchased an apartment for 370k back in 2005. It was a BTL (it was my only property not a second). During the course of the economic downturn we were struggling to make all interest payments due to then high rates of interest. However for 5 years I never missed an interest payment as I borrowed 300 per month from family to pay the mortgage (I have transaction statement confirming such). In Nov 2015 the person assisting us retired so we could no longer get assistance. I put the apartment on the market and sold the following month. The only reason I sold the apartment was because it was not possible for me to service the debt. Selling for 303k I crystallised a loss of 67k. I knew house prices were increasing at the time and selling was not something I wanted but given the interest on the mortgage being unaffordable I had to sell. The mortgage balance of 272k was cleared and the.

Last month I received a letter refunding me circa 40k stating that I had been charged the incorrect interest rate for a number of years and had been overpaying interest. So contractually I had been on an extremely valuable ECB max rate but incorrectly charged. My interest rate shouldn't have been unaffordable and I shouldn't have had to borrow from family or sell at a 63k loss.

I want to be back in the position I should have been. I want to have the apartment back at the contracted rates. The last apartment sold in the complex went for 346k last month. What should I do?

Any advice would be great.
 
I'm also interested in what you do. An interesting one and you have articulated the situation very well indeed.
 
This is a very difficult one.

If the lender put you under direct pressure to sell, then you have a great case.

Even if they didn't you have a very strong case.

I presume you have got a refund and compensation?

You should appeal the compensation through their independent appeals panel and seek far more.

I would argue:
This was bought as an investment and would have been a very good value long-term profitable investment, had I been on the tracker:

Rental Income: €15,000
Tracker interest: €5,000
Profit: €10,000
Of course, I would not sell a property which was making such a profit.


Off the top of my head, I would approach it as follows:

1) Mortgage balance cleared €272k
2) "value" of this mortgage over a tracker say c. 40%
3) Additional compensation due : €108,000

I would use the 40% figure, because this is the discount being offered by Tanager to people who pay off their mortgages early. The 40% seems high, but they might come back and award you 30%.

You could also seek extra compensation for the following issues:
The embarrassment of having to borrow from family to fund the mortgage
The fact that you were paying so much might have prevented you from buying your own home (only if this is true).

Brendan
 
I think you should be returned to the financial position you would of been in had the bank not over charged you .
So that would be the bank purchasing the apartment back , giving it to you with the same mortgage at the correct rate and of course compensate you for what they put you through.
Or of course pay you the lost rentall income you would of received plus the forecasted future value of your investment property, you'll need an actuary to work out the actual amount , perhaps it would be worth your while contacting Padraic kissane.
 
I have thought of another approach.

Assume that you had not sold the property, where would you be today?

A) You would have an apartment worth €350k - so you have lost around €50k through selling
B) You would have a cheap tracker mortgage of about €230k

1)They should refund you the overcharge - they have done this.
2)They should compensate you for the non-financial side of things e.g. the embarrassment. - I presume you have received something towards this.
3)They should give you the €50k lost through selling
4)And they should give you a tracker of €230k on the same terms towards the purchase of a house or investment.
5) They should give you about €3k for professional advice on the deal

Instead of 4) they could offer you around €80k cash now.

Brendan
 
That is shocking!! Let's get real everyone. The time for financial advisors is over. If a bank has conceded the case - go to the best most trusted solicitor you can access and sue for damages nothing less.
 
That's right tedtalk

Go to a solicitor, most of whom have no financial understanding whatsoever.
Spend years in court and run the risk of losing and facing big legal costs.

Or go to someone like Padraic Kissane. Work out your losses. And make a claim through the Independent Appeals Panel. You have a good chance of getting proper compensation in months and putting the whole sorry tale behind you.

Brendan
 
That's fine Brendan. If any solicitors are on the board please share your views. I fully believe a financial advisor will be fine for 95% of cases however for the very serious cases the only place you will get "independent" and appropriate special damages will be in a court or at the steps of a court.
 
I really appreciate the responses. It was helpful being able to gage peoples reaction which clarifies things to me and provides perspective.

Genuinely I just want to be in the position I would have been in back in 2014 had I known I had a valuable ECB rate cap. In line with this thinking, I would be satisfied with the bank providing me with a 272k mortgage+cash as equity to buy a similar value property on the ECB capped terms. I'm not looking for more than this and won't be requesting compensation. I know some may feel this should be due but I do appreciate in the BTL errors there wasn't clear intent to mislead. I don't think this option will work for any bank logistically knowing their decision making process an the remit of those involved in cases such as this. The Bank never pushed me to sell but my opinion is that it only didn't get to this point due to my actions (and luck that a family member ensured it never even got close).

Failing the above a cash payment that would result in me recouping my initial net purchase price of 370k would suffice.

These two options will be put to the independent appeals board. I know I could do all sorts of wonderful things with interest rate curves, rental inflation and property prices but in truth had I been able to sell the property for 370 even with an ECB capped rate I would have. My opinion is both of the above are fair.
 
I submitted my appeal and the bank rejected it completely saying it was a voluntary sale and that the overcharging didnt have any impact on my decision. They also stated that I never expected to have the ECB cap and that it was a mistake that I was given it.

It's now with the appeals panel. On the phone they said they would be making their decision within the week. Then 5 days later I received a letter saying I would have their decision in 8-10 weeks. No idea why the time line was pushed out so significantly.
 
I should have been clearer. Submitted my Claim to the panel and the bank response (via letter) to my letter was to reject my claim that I should be given additional compensation. Now it sits with the appeals panel.

Ebs
 
OK.

I had not realised that the bank either accepted or rejected the claim. But that makes sense. If they had accepted your claim, there would be no need for an appeal.

Based on what you have said, you have a good case. If the Appeals Panel rejects it, it might have something to do with the way you are presenting your claim. So before going to the Ombudsman take advice from someone like Padraic Kissane.

Brendan
 
Hi Dpd,

My wife and I have a similar issue to yours but waiting on redress proposals for 6 months now.

But one point on your post that I don't follow:

the bank are stating you never expected an ecb cap.. and that it was a mistake you were given it..

Could you clarify what all that was about?

thanks,
PFS
 
Then 5 days later I received a letter saying I would have their decision in 8-10 weeks.

We received same letter, issued March 20th but we then received their decision, issued April 3rd.....

......rejected!
 
Hi Dpd,

My wife and I have a similar issue to yours but waiting on redress proposals for 6 months now.

But one point on your post that I don't follow:

the bank are stating you never expected an ecb cap.. and that it was a mistake you were given it..

Could you clarify what all that was about?

thanks,
PFS

That's what they said. The said the terms and conditions of my mortgage was that the interest rate was capped at 1.5% above the ecb rate but that this was a mistake on their part and that I never contacted them asking for this rate.
 
Dpd,

Thats crazy stuff for the Bank to argue the rate was not a central reason to you selling the property.

Good luck with appealing and you should be compensated to put you in a similar position financially as you would have been had correct rate been applied.
 
Well tbh, ours is the rate issue but as advised, we had to explore all options before we take the plunge with the big fight!!

No surprise that it was rejected. Just means we take it to the next level now.
 
I would have thought the smart thing for banks to do, would be offer reasonable proposals.. try avoid drawn out disputes and get the whole tracker issue closed out in a timely manner.
 
Back
Top