PTSB ptsb may be getting calculations on some split mortgages wrong

PadKiss

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215
A question on the Warehoused loan is was it caused by the PTSB overcharging and if so then the only acceptable position is that the loan is firstly put back to the position it was in before the split took place. Then the calculation can be done to establish the pre and post position and then the redress letter should be worded accordingly as if the reason for the warehousing is PTSB then this is obviously totally unfair. This will also mean a restoration of ones Credit Rating as well as a larger repayment direct to the customers. If the circumstances were caused by other reasons outside of PTSB (job loss, economic impact, etc.) then the current redress letter is appropriate with the exception of those who have only been offered ECB plus 3.25% or such rates that are incorrect. Padraic
 

Brendan Burgess

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Your question should be - would the warehouse have been necessary had they charged the correct interest rate from the start?

In Rory's case, he would have a mortgage of €367k today with repayments of €1,300. He would not have needed or been granted a split mortgage as he could make his full repayments.

I am surprised that ptsb did not do this. This is how I would have done it. Instead, they have left him with the split and with a much reduced repayment, although he can afford to pay more.

This will also mean a restoration of ones Credit Rating

Yes, but he will have much higher repayments.


as well as a larger repayment direct to the customers.

Not in Rory's case anyway. In fact, I don't think it will result in a larger repayment in any case. This is what they do.

1) Calculate what the mortgage would be today had he been charged the right rate and had he not split the mortgage and had he made the full repayments which should have been made
2) In some cases, that will be more than the main mortgage amount, so the full overcharge will be deducted from the warehouse.

Brendan
 

PadKiss

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215
Brendan
I need to correct if people are in a warehouse situation of PTSB's making their redress letters are incorrect and the reduction of the warehoused loan is also incorrect. I have spoken to PTSB and am requesting a correct redress letter which will present an entirely different situation of redress. They have agreed some affected are indeed in this position with incorrect redress letters. Padraic
 

Brendan Burgess

Founder
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37,836
1) Calculate what the mortgage would be today had he been charged the right rate and had he not split the mortgage and had he made the full repayments which should have been made
2) In some cases, that will be more than the main mortgage amount, so the full overcharge will be deducted from the warehouse.


This is he way it should be done.
If I understand you correctly, Padraic, you are saying that they are not doing it like that. OK, I will check the cases again to see if they are doing it correctly.
 

Brendan Burgess

Founder
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37,836
It's best to illustrate this with an example. For simplicity, I have kept the interest rates constant.

Split mortgage with no arrears – the split would not have been needed had ptsb charged the correct interest rate

Actual position

upload_2015-8-13_9-47-25.png

upload_2015-8-13_9-47-43.png


First recalculate the mortgage applying the correct interest and the correct repayments and no rescheduling or split

upload_2015-8-13_9-48-8.png


So ptsb should pay €49,181 cash to the borrower.

Their new balance will be €200,500 which is what they would have been anyway.

There should be no need for a split.



If ptsb is doing the following they are wrong:

upload_2015-8-13_9-48-45.png
 

Brendan Burgess

Founder
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37,836
Example where there are heavy arrears.

upload_2015-8-13_12-9-53.png


This account was charged 4% and went into heavy arrears:

upload_2015-8-13_12-10-48.png

Let's say that they have calculated that interest overcharged amounted to €80,000.

If the full overcharge is set against the warehouse, the situation will be:

upload_2015-8-13_12-13-51.png


As the resulting balance of €240,000 is higher than what the balance would have been had the correct repayments been made, €200,500, setting the full balance against the warehouse is correct.
 

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