KBC KBC Tracker Examination Information

peemac

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Moderator's note: This Key Post is a summary of the issues. Do not tag your case onto this thread. Start a new thread with your specific question.
Brendan


As requested here's key points about KBC Tracker issue. - this post will be added to over the next couple of days.

If you have received a letter from KBC dated January 5th (possibly other dates), then this letter is confiming that you are considered an impacted customer.

Assuming there is nothing unusual about your mortgage, such as it being paid off before KBC wrongly applied a high standard variable rate, it means you will be returned to a tracker rate at the terms written in your contract or detailed in the infamous flyer (0.95% - 1.4%) (see attached)
You will also receive a refund of the overpaid interest since the end of your fixed rate period and an amount of compensation.


What do you need to do? - Nothing really. The tracker rate will be applied first (estimated March / April payment) and theern you will receive your refund after that.

Who received the letter?

1 - I took out a tracker mortgage and then at a date up to July 2008 went to fixed for a period of 2-5 years.

Those who originally signed up to a tracker and has a specific percentage above ECB Refi rate detailed in their special conditions and who then moved onto a fixed rate for a period of 2-5 years after responding to an unsolicited "special offer" sent by KBC with each mortgage rate increase between 2006 & July 2008.
This cohort are the group that fought most as they specifically signed up to a tracker and responded to an unsolicited "Special Offer" fixed rate document that gave very little time to respond to and avail of the "Special Rate". This group (including myself) always felt cheated and many took cases to the FSO.


2 - I applied for or drew down a fixed rate new mortgage from Nov 2006 - Feb 2008. - UPDATED
Some of those who applied for or drew down a fixed rate mortgage from November 7th 2006 and end of February 2008 through their broker network. (though it seems direct customers are also included). Note that KBC say "applications" - so if you applied in Feb 2008 but only drew down in July 2008, you may be included.

The reason you are included is that KBC sent a communication to brokers in Nov 2006 to say that all fixed rate mortgages will roll onto specific tracker rates at the end of the fixed rate period. This communication expired in February 2008.

It should be noted that communication to brokers by banks are understood to be about new business. Brokers understand this, so this flyer would not apply to those who had commenced a mortgage prior to the date of the flyer or who applied for a mortgage after the flyer was superseded by *new communication in March 2008. - (*Assumption that a new communication was issued due to Central Bank accepting the dates)

It seems that KBC are not treating all fixed rate new mortgages in this cohort equally and there is no information as to how they are deeming some of this cohort impacted and others not impacted. If further information is received, this will be updated.


Here is a link to KBC's Public Statement from December 20th 2017 regarding above
https://www.kbc.ie/news-and-press/latest-news-and-press-releases/update-from-kbc-bank-ireland-regarding-the-tracker

3 -
KBC returned my tracker, after taking it from me as a condition for restructuring back in 2009

In 2010, the Code of Conduct on Mortgage Arrears prohibited lenders from taking people trackers from them as a condition for restructuring. It appears that KBC has agreed to give trackers back to people from whom they took them before 2010. This seems to be the first group that KBC acknowledge and some have already received an initial refund payment and have been returned to their tracker.
Details of the press release about this cohort is here - https://www.kbc.ie/news-and-press/latest-news-and-press-releases/tracker-mortgage-examination

There are other customers with different scenarios that have not been deemed impacted, but depending on their contracts and any other supporting communication, they may be added as the Central bank moves into the final phase.
 

Attachments

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peemac

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Those deemed not impacted

KBC are also writing to borrowers who are deemed "not impacted" i.e., they will not be getting their trackers back. It's unclear what the criteria are.

KBC says I am not impacted

I took a fixed rate mortgage out in 2004 and then fixed again in 2007. Doesn't the broker flyer apply?

No - brokers write new business and the flyer was sent to brokers only and was not a general communication. Brokers would understand that this applied to new business. So unfortunately you are not impacted. However if you are on a standard variable rate you should check the various LTV and fixed rates that would be substantially lower.

I took out a mortgage and a tracker was not offered to me even though they were available.

Banks do not have to offer every rate to every customer. So if you were not offered or asked for a tracker and there is no communication to suggest a tracker would be applied at a future date, you wold not be deemed impacted.

My fixed rate said it would go to the "prevailing home loan variable rate" - wasn't the prevailing rate a tracker rate?

Unfortunately this is not the case (yes, I tried that argument, but it was shot down) KBC had a standard variable rate at all times and many customers who took mortgages before Trackers became the most popular product continued on standard variable rate as the difference between SVR and the trackers was very small / negligible up to 2008. Only when the bank realised that SVR could be changed on a whim with no regard to ECB rate, did a large divergence apply and the value of trackers became apparent. Some of this was due to cost of funds to Irish banks being way above ECB rate due to risks, and part was to shore up losses on trackers as they were below cost of funds. It will be difficult for someone in this scenario to get a tracker unless they have some supporting communication that applied to the date of the mortgage document (e.g. the broker flyer)
 
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Clara16

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thanks Peemac for post, interested to see if there are many like me who received the letter on Jan 5th. I drew down in Aug 2007 dealt directly with KBC for mortgage, fixed for 3 years to roll onto 'prevailing rate'. I queried tracker rate from the bank in 2010 and was laughed at, contacted Tracker review team pre Christmas and was told I wasn't included in review and then the letter arrived Jan 5th.
 

B26354

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Was there a margin above ECB base rate referenced in the loan offers of the 2nd group you mentioned? Those who who applied for or drew down a fixed rate mortgage from November 7th 2006 and end of February 2008 through their broker network.
 

peemac

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Was there a margin above ECB base rate referenced in the loan offers of the 2nd group you mentioned? Those who who applied for or drew down a fixed rate mortgage from November 7th 2006 and end of February 2008 through their broker network.
yes, its in the flyer document attached to above post
 

B26354

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yes, its in the flyer document attached to above post
Thanks PeeMac.

My question was probably poorly worded.

I understand that there was an additional flyer from brokers that identifies the margin above ECB base rate for the term of the loan after a fixed rate has ended. I was curious as to what was included in the actual KBC loan offer. For instance does it clearly state what rate the fixed rate will roll into after the term is completed such as an SVR or Tracker? Or is this not made clear?

The reason I ask is that in loan offers from other banks such as from EBS, it is not clear what rate will follow a fixed rate term especially if you started with a fixed term on your mortgage repayments. Much like KBC there was additional information provided by brokers that suggested you would roll onto a tracker but this was not made clear in the actual loan offer.
 

Brendan Burgess

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peemac

Thank you very much for doing that. It is a super post and will be very helpful to those affected.

I have made it a Key Post.
I have added in a second post immediately afterwards in your name and put in a link to those deemed not impacted. (If you need another blank post after that, let me know.)
I have also edited your post you add in the bit about people who lost their tracker as a condition of restructuring.

Brendan
 

estuarine

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Peemac, many thanks. Your efforts are hugely appreciated. With regard to your statement that KBC are not treating all fixed rate mortgages in the 2006-2008 cohort equally, do you mean simply that there is inconsistency regarding who is deemed impacted and not impacted, or are you saying that their treatment of impacted customers is similarly inconsistent? As an impacted customer, I am still awaiting further clarification. Has anyone gone from impacted to not impacted (in writing) that you are aware of? Thanks again!
 

peemac

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Peemac, many thanks. Your efforts are hugely appreciated. With regard to your statement that KBC are not treating all fixed rate mortgages in the 2006-2008 cohort equally, do you mean simply that there is inconsistency regarding who is deemed impacted and not impacted, or are you saying that their treatment of impacted customers is similarly inconsistent? As an impacted customer, I am still awaiting further clarification. Has anyone gone from impacted to not impacted (in writing) that you are aware of? Thanks again!
As far as I'm aware noone has gone from imapcted to not impacted. Deloitte oversaw the examination and those with letters are deemed impacted and KBC have publically stated that - It would be nigh on impossible for them to retract that.

The seem to be many that took out a fixed rate and expected to go onto tracker as per the infamous flyer who have not had ant letters. KBC have not given any plauible explanation for that.
 

DamC82

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As far as I'm aware noone has gone from imapcted to not impacted. Deloitte oversaw the examination and those with letters

The seem to be many that took out a fixed rate and expected to go onto tracker as per the infamous flyer who have not had ant letters. KBC have not given any plauible explanation for that.
Are there many of this cohort who have actually received letters?
 

peemac

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Are there many of this cohort who have actually received letters?
yes there are some on aam that have letters and belong to that cohort - hence the puzzle.
How does one person with same type, timeframe and wording in a loan be considered impacted and another not?
 

nowelld

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Hi, I know this is an old post but i got my fixed rate letter of offer from KBC 23rd February 2008. I drew down in April 2008. KBC claim the offer letter they sent out ended 11th February 2008. Anyone know is this true and do ihave any case then?
 

Jazzer1

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Hi nowelled,
My mortgage dates are very similar to yours. I have asked KBC on a few occasions to issue me with the statement that they send out during this period to stop offering the tracker product on the infamous flyer, but as of yet they have not send me proof that the statement exists. P.Kissane believes that KBC was still offering tracker mortgages from the flyer up on till July 08. You can contact Padraic Kinssanes office and get him to review your contract and case. At present I think his office is closed due to Covid 19, but if you send him an email and outline your case his office will get back to you.
 

Covid20

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Hi,

I drew down IIB Mtg in 2006 through a broker but was offered a fixed rate option for 4 yrs, KBC took over IIB around this time and when my fixed rate had expired I automatically was put onto a pretty penal variable rate. I was never given an 'Options Letter'.I am now in negative equity but have somehow kept my payments up todate making out of course payments. In the intervening years I have applied for personal loans with other institutions for cars , education etc and had been turned down as I was told I had ICB issue.

KBC wrote to me last year and told me that they had misreported my account to ICB on over 30 occasions over past 10 years and gave their 'sincere apologies'.

I keep my affairs close to myself but recently told my story to a friend who has some knowledge in this area and he reckoned that I have a strong case in that I should have been offered a tracker at the start of my mortgage or when my fixed rate expired. He also was of the view that as they had mis reported me to the Credit Bureau that I was also entitled to some compensation on that as well.

Any thoughts would be appreciated.
 

Covid20

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Apologies, should have mentioned that when I drew down mortgage with IIB the only option I was given was the fixed rate option.
 

peemac

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Mis reporting should certainly see more than an apology.

The actual date of the mortgage application and the date of the drawdown is needed to give an answer on the tracker.
 

Covid20

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Only got the 'sincere apology' bit unfortunately.

Think I applied in Sept 2006 and drew down in Nov 2006, there were some mistakes with original loan offer , I think.

Any thoughts
 

peemac

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Only got the 'sincere apology' bit unfortunately.

Think I applied in Sept 2006 and drew down in Nov 2006, there were some mistakes with original loan offer , I think.

Any thoughts
Check the precise dates. A day or two out can make a big difference.

After Nov 7th drawdown and you have a strong argument.
Before Nov 7th drawdown and you have a weak argument.

In relation to the original advice of fixing, it probably was right for the time as rates were increasing.
The main tracker issue came because people who were on trackers (incl me) switched to fixed rates in mid/late 2006. So broker advice was good at the time.

It's what rate you were to go to after the fixed rate that needs to be worked out.
 
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Covid20

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Hi The letter of offer was 25th Oct 2006 and loan was drawn in Dec 12th 2006 and not Nov 2006, are the dates relevant?

Many thanks
 
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