Some borrowers have only themselves to blame for losing their trackers

D

Dan Murray

Guest
Understandably, there is a lot of emotion in this debate. For those directly impacted, "debate" is too slight a word.

In the spirit of understanding the issues better, I'd like to comment on something Brendan said - which was essentially that if the contract clearly stated that borrowers would not get their tracker back at the expiry of the fixed term, then this means that.......borrowers would not be getting their tracker back.

I understand why Brendan might take this position. It is reasonable to assume that the written contract is the basis of any agreement. However, I do not agree with the absolute nature of Brendan's position. In my long experience in business, one thing that I have learned is that things in general and the law in particular are not always black and white. In simply terms, taking absolute positions [as in.....borrowers will not be getting their trackers back........based on only part (i.e. the written contract) of the overall circumstances.....is, to quote Sir Humphrey, very brave.]

One thing that I have noticed in threads to do with the tracker issue is the relative absence of contributions from the legal eagles within the AAM community. I would like to set out a scenario (which is very similar to a real life case of which I am aware) and ask our legal friends to comment on whether Brendan's certainty in relation to the absolute determining nature of the written contract is justified in these circumstances.

1. Individual bought 2 investment properties on a tracker basis with BOI in 2003.
2. Circa 2 years later, he fixed the mortgage on property 1.
3. A further 15 months later, he fixed the mortgage on property 2
4. At the expiry of the fixed term on property 1, the tracker is restored, in line with the written contract.
5. At the expiry of the fixed term on property 2, the tracker is DENIED, in line with the written contract.
6. Both trackers were with BOI and the same individual was the relevant bank contact in relation to the initial property purchases and also at the time of initiating the fixed periods.
7. This bank official (now ex-BOI) is prepared to swear an affidavit/testify that he:
(a) was unaware that the tracker would be lost upon "fixing" in relation to loan 2
(b) assured the client that he would have the right to return to his tracker at the expiry of the fixed term in relation to property 2
(c) did not provide any warnings in this regard in compliance with the Consumer Protection Code
(d) would not have been able to provide any warnings in relation to the CPC because he was unaware that there was anything about which to warn clients!

I think that's the general gist of the case - looking forward to contributions from all but especially our esteemed legal friends!!
 
Last edited by a moderator:

Bronte

Frequent Poster
Messages
13,825
Who in the bank made the decision to remove the trackers?

Who has that power?

There must have been a meeting about this. Were there minutes of the meeting?

Was there correspondence, emails etc between management and their legal team about the legalities of removing the trackers?

Posters on here are bank staff, work it out. How did it happen. Then you will prove it was a deliberate decision.
 

Brendan Burgess

Founder
Messages
40,572
Hog, Linten and Max01

Could you please tell me the dates on which you fixed your mortgage rates with Bank of Ireland?

Thanks

Brendan
 
D

Dan Murray

Guest
Hi Bronte,

You make very fair points. But....

My sense, however, is the apparatus of state should not be rewarded for its abject failure to date in resolving this debacle and that the state (in whatever the appropriate manner is) should finally take responsibility for resolving this mess & performing such an investigation.

Very simply, instead of having a bottom up approach (where individuals become charged with taking various initiatives described in this and other threads) - the STATE should take this issue by the scruff of the neck and sort it out and whatever body is charged with this exercise should be given all necessary powers. This is the TOP DOWN approach.

To date - we have little isolated man taking on the mighty banks in an uncoordinated and frankly ineffective manner. Why not rebalance the equation - why not get the State to sort it out?
 

Brendan Burgess

Founder
Messages
40,572
the STATE should take this issue by the scruff of the neck and sort it out and whatever body is charged with this exercise should be given all necessary powers. This is the TOP DOWN approach.
Hi Dan

Isn't the state already doing that through the Central Bank?

Brendan
 
D

Dan Murray

Guest
Hi Brendan,

Firstly and importantly, I believe AAM is of great assistance to those impacted by this issue even (or especially!) when folk have different views! ;)

In my view, the CB's performance is an absolute disgrace. It is clear that the CB knew about this issue c. 7 or 8 years ago. They have demonstrated absolutely no sense of urgency in bringing closure to this debacle. The fact that we are still debating this issue now is because the CB has failed spectacularly to manage this situation properly to date. For the avoidance of doubt, I do not have confidence in them! - my impression is that certain members of the Finance Committee are similarly unimpressed! [The body language was informative when Paddy Kissane was defending the CB!!]

Anyway, this particular issue is debated further in this thread....
http://www.askaboutmoney.com/threads/tracker-public-interest-legal-action.202663/
 

Brendan Burgess

Founder
Messages
40,572
Thanks Max

That is what I thought. These 1,800 people fixed in 2006.

Tracker mortgages were widely available at the time. Neither Bank of Ireland nor the staff who fixed understood the value of trackers at that time. If you had understood, you would not have fixed. If the Bank had understood, it would not have been offering trackers.

So BoI was not deliberately conning people out of trackers. If I recall correctly, you were being caught by bizarre BIK rules and fixed to avoid them?

In October 2008 the bank put up a message on the internal website that all staff accounts on the fixed rate would roll to the tracker as per original loan agreement.
This was two years after people made the decision to fix. BoI made an error in putting up that message. It had no consequences for the borrowers. No one gave up their tracker based on that error.

Say a tracker mortgage holder today is concerned about the rise in rates and is thinking of fixing.
Let's say that their bank writes to them and tells them, in error, that they get their tracker back after fixing.
The borrower then fixes based on that error.
Then the bank refuses them the tracker back at the end of the fixed rate.
The borrower would win their case immediately with the FSO. The bank would not even contest it.
The borrower made a decision based on the bank's error.

In the 1,800 cases, no borrower lost as a result of the bank's error in 2008. Had the bank written to you when you fixed, and told you that you would get the tracker back, then you would get your tracker back.

I am basing my analysis on the one FSO decision I have seen. It may be that the other 1,799 cases are different. But this is what the FSO said.


“It is therefore evident that this MFA clearly and unambiguously ended the Bank’s original contractual commitment to provide the complainant with a tracker rate”

“It is indisputable that paragraph 3 of the MFA clearly superseded the tracker special condition 11.4”

The FSO has reached the opposite conclusion in many other cases. That the MFA was vague and therefore the borrower should get their tracker back. It seems that BoI accepted this in these cases and put over 2,000 people back on trackers: BoI to review the tracker issue

So, just to restate Cremeegg's original point. Many borrowers were unfairly denied their trackers. But many others have only themselves to blame.

Brendan
 
Last edited:

Hogmeister55

Registered User
Messages
27
Hi Brendan,

I would counter argue that the MFA was not clear, unambiguous and did not explain the possible consequences of giving up a tracker. That is for central bank review to decide.

The other point I made is that the roll-to rate on all the staff mortgages in October 2008 was to staff tracker ECB +0.75 not variable or fixed. This was set up on the IT systems. The internal website was reporting that fact to staff. In fact it specifically stated that other options would be given in January 2009. If you did not chose something else then the default option was tracker.

Whatever we signed up previously to that the bank intention in late 2008 was that all staff would move to trackers. The internal website report was not a mistake. The bank did not claim it was a mistake the letters we received in January 2009 stated that they had reviewed the decision since then.

It's very easy to say we were consciously giving up trackers in 2006 or 2007 however the bank decided after October 2008 to switch the roll-to rate to variable.

Even though it was all so absolutely clear and unambiguous the bank made the same error as we did. They assumed we were rolling to tracker. Someone had to go in and change the system after October 2008 to fix that.
 
M

mister32

Guest
Neither Bank of Ireland nor the staff who fixed understood the value of trackers at that time. If you had understood, you would not have fixed. If the Bank had understood, it would not have been offering trackers


There was a clear understanding on both sides of what a tracker was: indefinitely track ecb rate.

But when the ecb rates dropped the banks then *tried* to change that understanding.

By the way Brendan, I know nothing about the BOI staff tracker situation but I find it incredible that a founder of a consumer finance website is describing a bank publication on a website as an error and then excusing them for it!!

Amazing!
 

Linten

Registered User
Messages
35
Brendan

I switched from Tracker to staff variable in August 2006 and subsequently switched to fixed rate in early Jan 2007, when the variable rate which was linked to Revenue BIK rate was no longer available.

That is what I thought. These 1,800 people fixed in 2006.

Tracker mortgages were widely available at the time. Neither Bank of Ireland nor the staff who fixed understood the value of trackers at that time. If you had understood, you would not have fixed. If the Bank had understood, it would not have been offering trackers.

So BoI was not deliberately conning people out of trackers. If I recall correctly, you were being caught by bizarre BIK rules and fixed to avoid them?

However I have to take issue with your above post....surely you remember the context in 2006/07 - ECB rate was increasing almost monthly. Many consumers were seeking to mitigate interest rate risk by fixing their mortgages and looking for attractive options that might help them weather the storm, so switching from Tracker to Fixed at that time was a sensible decision.What is at issue is the Bank's decisions not to offer return to Tracker rate on expiry of fixed term, given that in most cases they had already included ECB tracker feature for life of loan in original Mortgage Offer letter. Given that the Banks at that time(as you point out yourself)did not understand the value of the Tracker option, it would appear more like incompetence than anything else, that their MFAs did not specify return to Tracker on expiry of fixed term.

I would really like to see the wording of the MFA that you quote as clearly and unambiguously ended the Bank’s original contractual commitment to provide the complainant with a tracker rate” to see if it is the same as my own which I referred to earlier....if you were able to reproduce the wording it would be greatly enlightening.

Separately I have reviewed the link which you posted in relation to BOI restoring 2096 trackers in 2010 and certainly the plot thickens. Key poster 'Booter' was making the exact same argument for restoring his Tracker with FSO as regards the interpretation of 'variable' rate, as I am in respect of my MFA. The only difference is that in my case the MFA quoted 'Home Loan variable rate' and in his case no roll to rate was quoted, however BOI cite a seperate General condition of the original agreement, which provides that upon expiry of any future fixed rate, the rate on offer "would be a variable rate"
....anyhow read the full post and you will see that 'Booter' was restored to Tracker as part of the general return of 2096 trackers by BOI in 2011
Why was my Tracker not returned as part of that major review??...that is the question for Bank of Ireland and Central Bank of Ireland which oversaw that BOI investigation.
 

Sarenco

Frequent Poster
Messages
6,171
Hi Linten

Booter certainly reported that Bank of Ireland restored his tracker.

However, it is clear from the thread that this was not on foot of a FSO adjudication and it is unclear whether it had any connection at all with the arguments he was making to the FSO.

In other words, it's not much of a precedent.
 

Brendan Burgess

Founder
Messages
40,572
given that in most cases they had already included ECB tracker feature for life of loan in original Mortgage Offer letter. Given that the Banks at that time(as you point out yourself)did not understand the value of the Tracker option, it would appear more like incompetence than anything else, that their MFAs did not specify return to Tracker on expiry of fixed term.
Hi Linten

This is exactly the point that Cremeegg is trying to make. You had a tracker rate and you fixed as you were worried that rates were going to rise.

The MFA changed the terms of the contract - "clearly and unambiguously" according to the FSO. I have looked for the documentation, and don't seem to have it anymore. Maybe you could reproduce yours?

You seem to acknowledge that the MFA did not specify a return to tracker, so I am not sure why you think you should get the tracker back?

The only difference is that in my case the MFA quoted 'Home Loan variable rate'
I suppose that the FSO or the High Court would have to decide if it was clear that the "Home Loan variable rate" is not a tracker.

If I were employed as a bus driver, I might argue that this terminology was not clear to me at the time.

If I were employed by a bank, I would find it hard to say that I thought a Home Loan Variable Rate was a tracker.

But, it doesn't matter what you or I or the Bank of Ireland thinks, if the FSO or High Court decides that it was not clear to 1,800 bankers, then you will get your trackers back. If the FSO or the High Court thinks that it was clear, then you won't.

Brendan
 
Top