KBC Summary of the KBC Cohorts

Brendan Burgess

Founder
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38,667
But as trackers were gone, this option would not be valid
Hi peemac

This is not correct.

AIB were in the same position. Borrowers had the following clause in their contract:

At the end of any fixed interest rate period, the customer may choose between:

a) A further fixed interest rate period, or

b) Conversion to a variable interest rate Mortgage Loan, or

c) Conversions to a tracker interest rate Mortgage Loan,

at the bank’s then prevailing rates appropriate to the Mortgage Loan.”


AIB stopped offering trackers to new mortgage applicants.
They also stopped offering them to fixed rate customers who had the following clause.

However, the Ombudsman, Bill Prasifka, said that they must offer a tracker to these customers.

But then he said that they could determine 5 years later what the rate would have been. So AIB said it would have been 7%, so the borrower was deemed not impacted.

This is the core of the AIB prevailing rate case.
AIB were wrong to not offer such borrowers the prevailing rate. That is now agreed by everyone including AIB
But we are arguing that the prevailing rate was still in existence. It was ECB +1.5% which prevailed until they changed it in December 2013.

Brendan
 

Wonder

Registered User
Messages
39
Iib/kbc will have to produce all its rates for the period 2005 to 2008 to ombudsmen or the courts and that will prove who was on what rate and when, untill that happens this will not end .
Brendan, peemac maybe ye could access there svr and tacker rates on a monthly basic from 2005 to 2008 or have the know how to do so !!
As I and so have others asked kcb on numerous occasions to no avail .
 

Gimmestrength

Registered User
Messages
41
Iib/kbc will have to produce all its rates for the period 2005 to 2008 to ombudsmen or the courts and that will prove who was on what rate and when, untill that happens this will not end .
Brendan, peemac maybe ye could access there svr and tacker rates on a monthly basic from 2005 to 2008 or have the know how to do so !!
As I and so have others asked kcb on numerous occasions to no avail .
The only logical conclusion is that they have something to hide
 

Sanparom

Frequent Poster
Messages
102
Iib/kbc will have to produce all its rates for the period 2005 to 2008 to ombudsmen or the courts and that will prove who was on what rate and when, untill that happens this will not end .
Brendan, peemac maybe ye could access there svr and tacker rates on a monthly basic from 2005 to 2008 or have the know how to do so !!
As I and so have others asked kcb on numerous occasions to no avail .
Dead right. I have asked them. Countless others have asked them and no one is getting a concrete answer.

Also, if in my contract (May 2005) it said that 'at the end of the fixed rate period, the prevailing variable rate would apply', but at the end of this period they sent me out a letter offering fixed again or variable, does that not negate what they said in the contract? Should I not have automatically rolled to prevailing variable (which I believe to have been tracker)?
 

mccoypat94

Frequent Poster
Messages
119
Is the ombudsman hearing any cases at present around the date issue with kbc 'flyer', or do they deem the review incomplete?
 

demoivre

Frequent Poster
Messages
2,605
But it's not reasonable to expect a tracker, where neither the contract nor any other communication with you mentioned tracker.
But it is reasonable to be put on a svr after a fixed period where neither the contract or any other communication with the borrower mentioned a svr ?
 

peemac

Frequent Poster
Messages
662
Hi peemac

This is not correct.

AIB were in the same position. Borrowers had the following clause in their contract:

At the end of any fixed interest rate period, the customer may choose between:

a) A further fixed interest rate period, or

b) Conversion to a variable interest rate Mortgage Loan, or

c) Conversions to a tracker interest rate Mortgage Loan,

at the bank’s then prevailing rates appropriate to the Mortgage Loan.”

Brendan
That's written into their contract and therefore is watertight

Whether a booklet with general information that you may or may not have seen can be relied upon to be part of a contract is debatable and one for a seasoned legal expert especially when the KBC contract says that the rate would roll over to the prevailing home loan variable rate.

As per a previous post of mine, if the word "tracker" or xx% above ecb rate is in your contract or is a specific part of the offer of the loan (such as they flyer), then you have a very strong case.
 

peemac

Frequent Poster
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662
Thanks for your reply peemac to the wording on the booklet. But what I cannot understand is, KBC did say in black and white that the choice was yours what product you wanted after expiry of your fixed rate and that included a tracker rate. KBC can not just say that the product was not available anymore. Did the wording in the booklet not influence peoples decision? If people go to the Ombudsman with the booklet that came with their application with this wording, Would they not have some sort of a case?
Its one for a legal opinion, but I suspect it would be negative as the difference in the different rates is detailed in the booklet and then the contract says you roll onto the homeloan variable rate.

You'd also have to read the book in its entirety as taking just a paragraph or tow on its own would not give a clear picture. But I reckon it would go back to the contract you signed and what was written in that contract.

The argument would be whether a member of the public should be able to discern that Homeloan Variable Rate and Standard variable rate are the same and that Homeloan Variable Rate could not be confused with the tracker rate that is described in the same booklet.


At the end of the day, it was "criminal" that banks ripped off variable rate mortgage holders and a good solution would be to retrospectively apply a "reasonable" rate (comparable to the rates offered today of 3%) to those that have an arguable argument.
 
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Darn40

Frequent Poster
Messages
72
especially when the KBC contract says that the rate would roll over to the prevailing home loan variable rate.

The Kbc contracts say
Lenders prevailing variable rate

They do not say
Prevailing home loan variable rate
 

Sanparom

Frequent Poster
Messages
102
@peemac - nowhere does it say homeloan variable rate. The wording is 'prevailing variable rate'.

'At the end of the fixed rate period the lender's prevailing variable rate will apply'. That is what is in our contracts.
 

Johnc6

Registered User
Messages
40
According to the Central Bank Framework for Conducting the Tracker Mortgage Examination 2015 document, the Banks were supposed to adhere to the following test criteria:
Section 3.6.1 In the course of the Examination, and in the context of the transparency of the documentation provided to customers, the lender is to consider whether there was potential to confuse or mislead customers including, but not limited to:
· a particular term pertaining to the loan agreement was given different meanings by the lender at particular points in time or whether certain terms had dual meanings, with the potential to confuse customers;
· products or interest rates were given different names with the potential to confuse customers in relation to the nature of the product or rate;
· complicated terminology that had the potential to confuse or mislead a customer was ever used;
· definitions of product/rate types were clearly set out, for example, in loan offers;
· terminology used by the lender pertaining to the loan agreement was consistent across all documentation provided to a customer, for example, in both a Rate Change Authority and the Loan Offer.

In the case of IIB/KBC 2005-2006 customers, Lenders prevailing variable rate was specified as the roll off rate for initial Fixed rate customers in the loan offer. Lenders prevailing variable rate was not defined or explained in any documentation as far as I can tell and is open to interpretation. Prevailing can mean predominant, most frequent, generally current, having superior influence. 2005 to 2008 the predominant variable rate was the tracker rate in all Irish banks.
Most of us were put onto SVR on expiry of the Fixed rate, IIB/KBC did not have SVR rate mentioned or explained in any mortgage loan offer documentation at that time so according to the framework document I suggest we have a good and valid case.
 

peemac

Frequent Poster
Messages
662
@peemac - nowhere does it say homeloan variable rate. The wording is 'prevailing variable rate'.

'At the end of the fixed rate period the lender's prevailing variable rate will apply'. That is what is in our contracts.
In mine, on the fixed rate instruction, it said "Homeloan variable rate" - and as those who were on trackers and then went to fixed, they were able to argue that the variable rate is that written in the main contracts as that was a reference point and it stated clearly that the xx% above refi rate would be "for the life of the loan".
Even in the wording you give - it says "at the end.... the prevailing variable rate" - so it would be the prevailing rate at that point. Variable rate are variable, so you couldn't argue that the variable rate at the beginning of the fixed rate applied - in that case the rate would be close to 5%.

I was one of those affected, but I also was one of the few that went through the FSO procedure (lost) and also looked at every legal angle and got a lot of legal advice on contract law - (those who were on tracker and moved to fixed had a strong legal case, but not water tight) therefore I am being devil's advocate on all my comments.

When you realise that the financial sector provides the legal profession with over 30% of the gross income you can be certain that any legal firm representing the bank will fight tooth and nail with their best people for the banks.

And in the absence of something concrete in writing somewhere, preferably in the contract itself, that suggests your particular mortgage has an entitlement to a tracker or a rate that is xx% above ECB/Refi rate, it will be nigh on impossible to win against them. (The AIB customers had the word "tracker" written in the contracts and the argument there is the rate that would have been reasonably expected at that time)

In general here I see two arguments.

1 - The booklet says you will have a choice at the end of the fixed rate period to choose what rate structure you go on to. But the contracts say you roll on to the prevailing variable rate

2 - The prevailing variable rate was a tracker. - However the same booklet that says you have a choice to go to a tracker (or capped tracker, or variable or another fixed rate) also explains the different rates and gives a definitive description of a variable rate and separate definition and a clear one of what a tracker rate is.


What you need to do is make an argument that in reading and signing your contract, there was something in the information that the ordinary person would have assumed that the rollover rate was tracker rate at a specific % above ecb and that this rate was the default rate that the fixed rate would move to.

That I think will be extremely difficult.
 

Darn40

Frequent Poster
Messages
72
According to the Central Bank Framework for Conducting the Tracker Mortgage Examination 2015 document, the Banks were supposed to adhere to the following test criteria:
Section 3.6.1 In the course of the Examination, and in the context of the transparency of the documentation provided to customers, the lender is to consider whether there was potential to confuse or mislead customers including, but not limited to:
· a particular term pertaining to the loan agreement was given different meanings by the lender at particular points in time or whether certain terms had dual meanings, with the potential to confuse customers;
· products or interest rates were given different names with the potential to confuse customers in relation to the nature of the product or rate;
· complicated terminology that had the potential to confuse or mislead a customer was ever used;
· definitions of product/rate types were clearly set out, for example, in loan offers;
· terminology used by the lender pertaining to the loan agreement was consistent across all documentation provided to a customer, for example, in both a Rate Change Authority and the Loan Offer.

In the case of IIB/KBC 2005-2006 customers, Lenders prevailing variable rate was specified as the roll off rate for initial Fixed rate customers in the loan offer. Lenders prevailing variable rate was not defined or explained in any documentation as far as I can tell and is open to interpretation. Prevailing can mean predominant, most frequent, generally current, having superior influence. 2005 to 2008 the predominant variable rate was the tracker rate in all Irish banks.
Most of us were put onto SVR on expiry of the Fixed rate, IIB/KBC did not have SVR rate mentioned or explained in any mortgage loan offer documentation at that time so according to the framework document I suggest we have a good and valid case.
Well done johnc6
That is well put together and a argument that is likely to win going by the central bank guidelines let’s hope so

Also this is dragging on now I think there are still more people affected that will come out soon.
 

Gimmestrength

Registered User
Messages
41
According to the Central Bank Framework for Conducting the Tracker Mortgage Examination 2015 document, the Banks were supposed to adhere to the following test criteria:
Section 3.6.1 In the course of the Examination, and in the context of the transparency of the documentation provided to customers, the lender is to consider whether there was potential to confuse or mislead customers including, but not limited to:
· a particular term pertaining to the loan agreement was given different meanings by the lender at particular points in time or whether certain terms had dual meanings, with the potential to confuse customers;
· products or interest rates were given different names with the potential to confuse customers in relation to the nature of the product or rate;
· complicated terminology that had the potential to confuse or mislead a customer was ever used;
· definitions of product/rate types were clearly set out, for example, in loan offers;
· terminology used by the lender pertaining to the loan agreement was consistent across all documentation provided to a customer, for example, in both a Rate Change Authority and the Loan Offer.

In the case of IIB/KBC 2005-2006 customers, Lenders prevailing variable rate was specified as the roll off rate for initial Fixed rate customers in the loan offer. Lenders prevailing variable rate was not defined or explained in any documentation as far as I can tell and is open to interpretation. Prevailing can mean predominant, most frequent, generally current, having superior influence. 2005 to 2008 the predominant variable rate was the tracker rate in all Irish banks.
Most of us were put onto SVR on expiry of the Fixed rate, IIB/KBC did not have SVR rate mentioned or explained in any mortgage loan offer documentation at that time so according to the framework document I suggest we have a good and valid case.
Thanks Johnc6 that is very helpful and interesting. I think the ambiguity in the contracts is clear!
 

peemac

Frequent Poster
Messages
662
Hi Peemac,
The the term SVR is on our letter, for a buy to let.
I think that proves that IIB/KBC did have a standard variable rate and may end the argument of those saying that did not have such a rate in 2005.

To argue for a tracker, I really think people need to have something somewhere that says the word tracker or gives a reference to a % above ecb refi rate or similar.
 

Gimmestrength

Registered User
Messages
41
That's really interesting.

What the letter shows is that there was an SVR available from IIB which I dont think anyone disputes and was being sold as a roll off in 03 or 04 when babyblackie started the fixed rate period.....or whenever they started it.

It certainly does not disprove the contention that all or the bulk of products being sold in 05, 06, 07 by IIB /kbc or their brokers were tracker products and this leads to a reasonable expectation that fixed / discounted rates would roll to trackers.

It would be helpful if the bank would demonstrate what products it was actively selling and when ... Based on comments I've seen here they have so far refused to do this for some reason.

On the point that a successful tracker case needs a direct reference to tracker/ margin above etc I would disagree with such a definitive assertion. Remember many got their tracker back without that wording .......
 

Johnc6

Registered User
Messages
40
I also have a letter being put onto SVR in 2007 at end of fixed rate however SVR is not in contract or handbook so according to framework document this should be in scope, also strangely the bank seems to have lost their copy of that letter
 
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Gimmestrength

Registered User
Messages
41
I also have a letter being put onto SVR in 2007 at end of fixed rate however SVR is not in contract or handbook so according to framework document this should be in scope, also strangely the bank seems to have lost their copy of that letter
Sounds familiar. Just because they state as fact that you rolled to SVR doesn't mean you should have! I have found it necessary to send a number of data access requests to the bank and got different stuff back each time. Keep at them
 

peemac

Frequent Poster
Messages
662
Just remembered that the Irish times published mortgage interest rates every week in their property supplement right through the early to late 2000's

If you have a subscription you'll be able to access the archive.
 
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