PAC - People against Clawback (and related AH campaiging issues)

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tina4

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What does everyone think about the clause that when you buy an affordable home you can never change you mortgage provider? Up to 35 years is a long time to be tied to one lender.

Also theres no provision for change in family circumstances, eg, A friend bought a 2 bed apart now has 3 kids. She cant buy out, it would leave her with vertualy nothing cause her percentage is 63%.And even if she did she would never get back on the property ladder.

Dont get me wrong its a great scheme but i think it needs to be changed slightly. And if the local councils built homes for local people instead of selling it to the highest bidder i dont think there would be as much demand "maybe" !!
 
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Re: Not able to change lender in AH

Yes it's disappointing to see this as you can't avail of a better interest rate. You could probably do it after the clawback ceases - in year 20.

How do the AH mortgage rates compare or is the mortgage offered just the current variable or tracker mortgage offered by each lending institution?
 
Re: Not able to change lender in AH

Hi AKA thanks so much for taking the time to reply. I cant beleive that i havent had more replys so thanks again.
I dont think theres a difference between mortgage % on AH house as to one bought on the open market. Also its whatever your lender is offering and the different mortgages you can opt for.
But the thing with ah is that some have taken out mortgages with their local councils and can never change to a bank.The choice wasnt there 4 years ago because no banks were dealing with AH only the councils. ALSO if you opt for shared ownership you cant change to full mortgage.
There are alot of discrepancies in the "clwbk". And for people who bought there homes 4 years or more it wasnt explained properly. And there was no hand book or anything like that what they have know. At least if you chose to do it now you know exactly what your getting into but that still doesnt make it right.
There has been a looby group set up to get things changed. We had a meeting with Minister Gormley and he has acknowledged that there are major problems with it and has promised he is going to amend the legislation.
But hes dragging his feet so there is a letter going to be sent to the ombudsman.
Hope this gives you a little insight.
Thanks again for the reply.
 
Re: Not able to change lender in AH

I'd say the reason nobody is replying is because they are all shocked and are checking their small print. My solicitor/council/bank never pointed this out to us. I'll check mine this evening.
 
Re: Not able to change lender in AH

AKA said:
Yes it's disappointing to see this as you can't avail of a better interest rate. You could probably do it after the clawback ceases - in year 20.

How do the AH mortgage rates compare or is the mortgage offered just the current variable or tracker mortgage offered by each lending institution?
Click to expand...
I was on variable of 5.1 but changed this to a tracker LTV of ECB+.95............. not sure if this is a great rate?!?
I think people can take advantage of the tracker LTV that are out at the moment and negotiate with their bank. Most of the AH loans are probably LTV<70% , so people should be able to get one of the lowest rates going.
 
Re: Not able to change lender in AH

seriams said:
I'd say the reason nobody is replying is because they are all shocked and are checking their small print. My solicitor/council/bank never pointed this out to us.
Click to expand...
You're right there! I hadnt heard about this either! Getting onto my solicitor now to see what the story is!
 
Re: Not able to change lender in AH

Believe me its right and this is an issue that the government and berti have known since 2002 because a td brought it up in the dail and it was wiped under the carpet. And with previous ministers he said that he was going to do nothing about it!! At least with john gormley he has acknoledged it. I have loads of letters confirming this.
Now onless there are some people with differet agreements but as far as i know its the same for anyone buying an AH, even now a freind is buying one and she has the same in hers. The only way you can change provider is if you "buy" out of clawback and this is not an option for most so they are stuck with the same lender.
When i posted a simaler post on another board i was basicaly called a lier that there is no way i could have not known about this when i was signing, the fact is i didnt and my solicitor didint either.
When you here the clawback you assume that you just cant sell and make a profit well thats only the tip of the iceberg. And lets face it most people like myself were/are so desperate to get a home that you wuld sign your life away. Its only after a while when your become aware of it be it money problems or personal problems.
Oh and you wont find this writen in your clwbk or your deeds !!!!! So theres no point in even looking it only mentions "resale"
 
Re: Not able to change lender in AH

So Tina,
If its not mentioned in the clawback or the deeds, then how can it be legal? You mention that you have already contacted TD's - is there anything we can do?
 
Re: Not able to change lender in AH

Tina4-P.A.C said:
the fact is i didnt and my solicitor didint either.

Oh and you wont find this writen in your clwbk or your deeds !!!!! So theres no point in even looking it only mentions "resale"
Click to expand...

So where exactly is this stated if anywhere? Im confused! Who or where are you getting your info from if its not stated in writing anywhere!My solicitor hadnt heard of this either!

seriams said:
So Tina,
If its not mentioned in the clawback or the deeds, then how can it be legal?
Click to expand...
Exactly!
 
Re: Not able to change lender in AH

On my Loan Offer from EBS it says "Please note no Top Up's are possible on these Loans". Also if anyone received the DVD from EBS on AH it mentions it in there too that you can't remortgage or change finance company without incurring the clawback.
 
Re: Not able to change lender in AH

This info is taken from www.southtippcoco.ie

The local authority works out the clawback as follows.
• When you buy your affordable home, you get it at a discount to other similar properties in the market. The clawback is based on the percentage discount you get when you buy your affordable home. If you decide to sell or remortgage your home, the local authority applies this percentage to the price you get for the sale.
• If you sell within the first 10 years, you must pay back the full percentage from the sale that you got as a discount when you bought your home.
• After 10 years, the percentage you must pay back reduces by one-tenth for each full year you live in your home.
• If you sell your home after 20 years, you do not have to pay any ‘clawback’ to the local authority.

Example of how the clawback works
John and Mary buy an affordable home. The market value of this property is
€280,000, and they buy it at an affordable price of €196,000. So, the market value discount to John and Mary, which is known as the clawback, is 30%.
• If John and Mary sold their affordable home for €330,000 after five years, the clawback would be €99,000 (30% of €330,000). They would have to pay
back €99,000 to the local authority. They would also have to repay any
money owed to the mortgage lender to clear their mortgage.
• If John and Mary sold their affordable home for €430,000 after 15 years, the clawback would have reduced to 15% and they would have to pay back
€64,500 (15% of €430,000) to the local authority. They would also have
to repay any money owed to the mortgage lender to clear their mortgage.
• If John and Mary sold their affordable home after 0 years, they would
not have to pay any clawback, but they would have to repay any
money owed to the mortgage lender to clear their mortgage.

 
Re: Not able to change lender in AH

Hi All. Regarding your questions about it not being writen anywhere. This is our exact point, this is why we want something done. We found out when a letter was sent to DCC asking to change mortgage provider and were told its not possible onless redeeming the mortgage.
There has been numerous letters sent back asking were this is writen and we cant get straight answers all we get it is the standerd stuff that is Quoted in the Housing and miscellaneous act 2002. The legislation was then amended in 2004 so that some banks could provide the mortgage. Most if not everyone who bought a AH before 2004 had no choice but to take out there mortgage with there local councils. And in some cases like with us the clawback wasnt even in legislation at the time.
DCC did not provide us with our homes we were part of a local inititive to provide affordable homes for local people this scheme has been running for 20 years. But when they were bulding ours DCC would only agree to sell the land to us if we agreed to this affodrable clawback, at the time it was only being put togather and as far as we were told if we sold within the 20 years you would have to pay the clawback, that was it nothing else. So this is what happened to many before it was changed in 04. But it still affects everyone who buys AH. O i know some of you are finding it hard to beleive. I would urge everyone to contact Minister John Gormley who is dealing with the matter and also contact your local TDs.

There was an artical in the Irish Times, By Olivia Kelly 23rd May 07 you might be able to look it up on their website.
We beleive that the Legislation is an infringment of our constitutional rights.
Anyone can join this group P.A.C. (people against the clawback). We are NOT againts the Not making a profit if a AH is sold, we are againts not having Rights. I hope im making some sense. My head is melted with it all.
 
Re: Not able to change lender in AH

Has anyone filed a complaint with the Ombudsman about this?
 
Re: Not able to change lender in AH

Hi,
Im not sure if this is relevant to this post but it’s a acary thought alright.
Im in the process of purchasing an affordable home and im finding it so frustrating. The council valued the apartment at 315k and its actually only worth 285k and was NEVER worth 315k. In fact none of the apartments in that area are anywhere near 315k. now im going to be paying a much higher % clawback that I should be if they had valued it at the correct price. Its like they jus picked a price and stuck with it. It makes no sense.
I rang them a number of times questioning them and all I keep being told is the market prices was set at the time of offer (only 2 months ago) and you know how house prices fluctuate and its not open for negotiation.

So I e mailed them explaining my concerns that im going to be paying a larger % clawback than I should be because the house was overvalued and they said the council is offering these houses to people in need of housing and its not a mone making scheme so people can just sell their homes and make a profit.!!
But that wasn’t my point! I understand the clawback but I still shouldn’t be paying more than I should be, it should really be 30% but with the price their valueing it will be about 38%. I just got the feeling that the know people are so desperate for housing that they think they can take advantage of that.
I said this in my e mail also.
Theres no way I could make money from it as id have to pay the clawback but I still should not have to incur a higher % because they didn’t value it correctly.
:(
 
Re: Not able to change lender in AH

Hi Tina,
Just wondering how I go about joining PAC, am so frustrated with the fact that you cannot remortgage without paying the clawback. I eventually got a reply back from my local TD who said he thought it was very unfair and that in future legislation would be changed but had no idea when !!
 
Re: Not able to change lender in AH

Anyone who wants to Join PAC can pm me Tina4 on opening post. Dont know how i used different name. Im registered as tina4, anyone know how i can change it to the one im using now tina-PAC?
Just pm me your name and address and il add you to list and send you forms and all documentation we have it makes very interesting reading.

I had read somewhere that there has been complaints made to ombudsman. So last week we informed our members and each one has sent in a standard letter. As far as i know the ombudsman will only deal with individual cases and wont deal with groups thats why all our members sent them in seperatly.

I would urge everyone to complain to ombudsman. And il stress again get onto Minister gormley and you local tds tell them you want something done now for the people who it affects now its no good 10 years down the line. 2 couples where we live have had to sell there AH because they could not cope with the spiralling costs as well as managment fees they were left with basicly nothing and are back on DCC housing list!! Now that says it all.

Here are some contact details.

Joh Gormley constituancy office 018882391
Custom House 018882000 lo-call 1890202021
minister@environ.ie

Barry Mescall or Emily OReilly
Office of the ombudsman
18 lower lesson st
Dublin 2

Happy123 i reckon we were over valued also but we cudnt do anything at the time we have a wopping 63% clawback. As far as i know we are one of the highest if not the highest %. There is NO WAY any of us could possibly "buy" out.

Heres an example why we want to change from DCC its not about interest rates. We have had nothing but problems with them from the word go, first they didnt have our mortgages ready when we moved in. Then eventually when we signed it took them 5 months to take money from Direct Deb. Each month for the first five months even though DD was set up they failed to take mon out so we had to arrange to go up and pay them. Then theres the mortgage allowance (you get this if you are surrendering a council flat) this was another nightmare. And then today i get a letter saying im in arrears of 2087e i ended up in tears on the phone to hubby after the way the guy spoke to me he was very rude and abrupt and was no help at all. WE DO NOT owe them this money this is yet another mess up on their part. Im sick of them and i would gladly pay higher % with different lender just to get away from them. If your not happy with a sevice you should be able to change its discrimination.
Sorry bout rant but i am soooo upset there is no way a bank or building society would get away with theses mess ups.
 
Re: Not able to change lender in AH

I enquired about this with my solicitor and got a letter yesterday stating that they had been in contact with the Affordable Homes Partnership and unfortunately it was not possible to change mortgage lenders! That was all it said!It gave no details as to where this is stated or referenced from.The fact that i have no choice is whats eating me,i probably might never change lender but not to have an option is the worse thing. Tina ill pm you about joining this PAC group. I wonder how many more little surprises like this will surface over the coming years?:confused:
Irish Times article .. [broken link removed]
 
Re: Not able to change lender in AH

hi swordhead,
i went through the whole process with a broker and she assured me that i wouldn't have to pay the clawback, there was no mention of it when i bought house just the fact that clawback would be payable if i sold house before 20 years which is fair enough. When i eventually got an answer from the council re redemption figures they included 90,000 clawback if i remortgaged needless to say i couldn't go ahead, I emailed my local TD and he said that this shouldn't be the case but would check with the local authority, 2 months later got a letter back. He attached an answer he received from the minister in reply to his parliamentary question on the issue. He said the situation is being look at but he does not plan any changes in the short term.
 
Re: Not able to change lender in AH

This just amazes me. We have all signed up for an affordable home, not one mention from council, bank or solicitor regards changing lender and now the lender knows we are more than likely stuck to them for 35yrs therefore has the ability to charge what they like.

Isn't this giving lenders a 'monopoly' situation?? Shouldn't governments be doing everything in their power to avoid monopoly situations?
It's an absolute farce!!

Anyone with an affordable home needs to get on board here fast.
 
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