Case study KBC took my home loan tracker when extending interest only period

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Mauritius

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A similar thing happened to me beginning of 2009. I was on a tracker rate, interest only. I was unable to make full capital repayments and told KBC that very clearly. However, they wouldn't allow me to continue on the tracker rate unless I made full repayments. Hence, they removed my tracker rate. They are now denying that I claimed I was in financial difficulty but I have it clearly in emails. Further, when they told me I would have to go onto the Standard Variable Rate, I asked them - quite naively: it was 2009 and I'm not a banker! - if Standard Variable Rates "went down when there were ECB cuts?" The reply I got, by email was: "To date, SVRs have benefitted from ECB rate cuts". We now know differently. They never reduced since early 2009. Every Irish bank has kept its SVR up around 4.5% even though ECB rates have plummeted. KBC hoodwinked me by suggesting they would pass on the rate drops. ALL OF US SHOULD BE STANDING UP TO IRISH BANKS AND INSISTING ON A MASSIVE DROP IN THE SVR in line with the rest of Europe. To not fight back is simply allowing the banks to bleed dry 300,000 mortgage holders for THEIR ENTIRE WORKING LIVES. This has to become an election issue because without governement pressure, the banks won't drop their rates. And, by the way, the FSO rejected my complaint against KBC about the tracker rate - let's not forget the FSO is paid for by the banks! But this will change once we hear the written verdict from the Court of Appeal on the Millar case. In the next few months, with out continued pressure, this will all change. The walls of the banks must fall.
 
Hi

Your 2015 post was buried in an unrelated thread, so I have moved it to here.

I have sent a message to MOD asking for an update.

Padraig - I raised the issue of those on Buy to Lets losing their trackers, but I was not aware of it happening to home loan borrowers. Have you raised this with the Central Bank.

Mauritius - There is a review of tracker issues being run by the Central Bank. You should send them details of your case and ask them to review this particular issue.

Brendan
 
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Brendan
Yes this did occur within KBC and while they denied publicly they were exploiting "Vulnerable Customers" in the newspapers I have a number of these cases ongoing. Yes it has also been highlighted to the Central Bank. I have been engaged by a number of customers of KBC to submit a detailed report on the behaviour of KBC to the Central Bank but would welcome further information on what others have been through with KBC. The more information and evidence I have the better.
I have also written to the Chief Executive (KBC) to meet with me as I have a large bank of evidence now accumulated to challenge their position of denying customers a return to their Tracker Rates. As you know I am organising a meeting of affected Customers of PTSB in the coming fortnight (Will write on this under separate Thread when I have finalised location and date now provisionally set as 31st March at 8pm) and will be doing the same for customers of BOI/ICS, KBC, Ulster Bank and AIB with information evenings to explore and update all affected customers on where I am with each lender. A lot has happened in the last 6 months but there is still deep resistance within lenders to put matters right. Hope this helps, Padraic
 
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Brendan, MOD's comments were 3 years ago. He seems to have been quiet since.

Re Mortgage Code of Conduct, from 2010 it was not allowed to take a Tracker rate off home owners because they asked to restructure - ie in my case asking for a 12 month interest only extension so that I could afford the repayments. But it happened to me in 2009. However it was quite clearly wrong what they did.
 
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Padraic, interested in the kbc information evening when you have it in place thanks
 
Hi

Is KBC reviewing your case as part of the Central Bank review?

Have they been in touch with you or have you been in touch with them?

This is the type of "cohort" case where the Central Bank should issue a guideline

"If you took a PDH tracker from someone as a condition of restructuring their loan, then give it back to them".

Brendan
 
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Hi Brendan,

Many thanks for your post. Yes, I have been notified by KBC that my account is in the Central Bank review. They told me last June and since updated me with a letter two weeks ago saying they are continuing to contact impacted customers.

I've had a few conversations on the phone with them too and they seem exasperated about how long it's taking. They said I should know by September '17 and that I will be in a "very good position" if it is found that I have been impacted. (I replied "obviously I have been impacted. My case is very straight forward. They took the tracker off me when I needed a 12 month restructure of the loan and didn't give it back.) They still won't give anything away though and unfortunately my financial mediator died a month ago in very tragic circumstances.
Niall
 
Hi

Have you notified the Central Bank of this case?

This is very simple and straightforward and applies to a lot of cases.

Either the Central Bank instructs lenders to give people back their trackers in these cases or else the Central Bank tells lenders that they were justified in taking trackers back in these cases. It's one or the other.

If the CB states this position clearly, at least you will know where you stand.

If you are told that you are getting your tracker back, then you won't mind the wait so much.

Brendan
 
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It would be fantastic if the central bank would make statements such as what you're asking, however my understanding is central bank does not comment publicly or respond to individual's queries

Totally exasperating
 
Hi

The Central Bank does deal with the public. They won't hear a specific complaint about an institution - that is the role of the FSO.

But you should report the issue anyway. Even if they do not get back to you, they will probably contact KBC and ask about their policy in this matter.

Brendan
 
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Brendan, the FSO! That's a whole other matter! The new guy has effectively overthrown the decisions made by the previous head who seemed to favour the banks in the region of 75%.
Should I register my situation with the Central Bank
 
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But if I already know that my account in the the tracker review with the Central Bank..... why would I contact the Central Bank directly? They will be made fully aware of my case already and will have a policy on this.
 
Why do you think that they are aware of your case?

KBC may not have told them of this issue.

Even if they do know, it's no harm reminding them.

Brendan
 
Hi Brendan, very true.
But I think it's very important to know exactly what to say/ write in any communication. The wording of any correspondence with the Central Bank would have to be very well thought out. With the FSO it seemed to only come down to contracts. But the CB has a much broader scope and is interested in whether the banks were entirely clear with their customers at all times.
 
Mauritius said:
But I think it's very important to know exactly what to say/ write in any communication.
Click to expand...

To be honest, it's not that important when talking to the Central Bank. (In contrast, you have to make your case to the FSO very carefully.) I would simply say

Dear Governor (Yes, I would bypass the junior staff who will send you just the standard cut and paste response"

1) I had a mortgage with KBC.
2) I got into financial difficulties and they rescheduled my loan.
3) As a condition of that rescheduling they removed my tracker from me.
4) I complained to the FSO
5) The FSO rejected my complaint
6) I have been advised by KBC that they are reviewing my case as part of the tracker review ordered by you.

This is a very uncertain and worrying time for me. I have been told by KBC that they will tell me the results of the review within 6 months.

I understand that the CB does not get involved in dealing with individual complaints and I am not asking you to do so, but I would like to point out to you that this is a systemic or cohort issue.

I understand that other customers of KBC received the same treatment, while the general practice in other lenders seems to have been to reschedule loans without altering the tracker.

As a "cohort" issue, you should issue guidelines on how such cohorts should be treated. It could be quite simple
"Where a lender removed a tracker from a home loan borrower as a condition of rescheduling their loan, then the tracker should be restored to them. This is a general guideline. If the lender believes that the specific circumstances of the case does not justify the return of the tracker, they must specify what those specific circumstances are. Such circumstances might be:
The borrower was in positive equity and the case could be resolved by the sale of the property.
The lender agreed to write down the mortgage by a substantial amount.
The lender agreed to take a joint borrower off the mortgage and so issued a new mortgage account.
The borrower insisted on a fixed rate mortgage and signed an MFA which showed that they clearly understood that they were surrendering their tracker mortgage"

YS
 
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Hi all
Just to let you know that the interest only extension aspect of the issue with KBC was comprehensively covered in my report on KBC sent to the Central Bank in June 2016. Additional cases would of course help highlight the issue but the Central Bank are aware of the matter. Padraic
 
Brendan,

just in two points in response to your very detailed and helpful post:
1. Was it only (or very nearly only) KBC that took tracker rates off customer when they needed to restructure their home loans? Has this not presented in other banks?
2. The document that I was required to sign (and put under pressure to sign, I might add) did not indicate at all that it was permanent surrendering of the tracker rate. It could be interpreted that the document seems to indicate the tracker rate is being changed to SVR only for the requested extended 12 month period of Interest Only. KBC did not offer back the tracker rate after the 12 month period referred to in the document I signed.

Many thanks
 
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Padraic has done great work on this. And it really would help you to help yourselves by inundating the Governor with actual live examples.

1. I have heard it said about other lenders, but I have only seen it myself in KBC. I do say "while the general practice in other lenders seems to have been to reschedule loans without altering the tracker."

2. That changes it quite a bit

I understood that you understood that you were giving up your tracker permanently.
Now it seems that you signed a rescheduling agreement which did not make this clear.

You might need to rephrase

" I understood that I was losing the tracker temporarily - and I object to even a temporary loss."

Brendan
 
Hi Brendan,

I will send the letter to Philip Lane based on the template you have given me. Many thanks for taking the time to do that. I fell that I should also enclose a copy of the letter stating that I have a tracker rate for the "full term of the loan" dated October 2008. And also the one page document I was pressurised into signing in Jan 2009 which extended my interest only period for 12 months and states I am giving up the tracker rate - though it doesn't say permanently giving it up.
 
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