AIB The implications of a split mortgage for any AIB Prevailing Rate compensation

[LicketySplit]

Brendan

Firstly, well done on all your endeavor over the years. It has been inspiring to say the least. Congrats on the result.

I believe I am part of the 6,000 but its only when I see something from AIB will I believe it. I have, like most others, had the most torrid time dealing with them over the years.

We took out a significant 3 year fixed mortgage in 2008 just as the world was on the verge of financial implosion.

In 2011, we exited the fixed term and were put straight onto variable rate. With unemployment and other issues, we had to engage with the bank to obtain revised terms including interest only, fixed repayment amount etc. This all came to a head in 2014 when we negotiated a split mortgage with 8% of the mortgage written off, 32% being parked until end of term and the 60% balance payable on regular variable rate terms. The bank also added 4 years to the overall term of the mortgage which I had to accept grudgingly.

Then finally, we received the letter in 2017/18 with the €1650 that we lodged. We didn't appeal as we naturally felt it would impact the split facility we had agreed.

This is the first time I have ever shared this with anyone so it feels good dong that alone - nevermind the possibility of compensation and redress.

My question is do you believe the above split facility will compromise any or all redress I might stand to gain from following this weeks announcement.

Thanks

 

[Emerald79]

Hi,

You are not alone. We also got interest only, fixed payment period and then a split mortgage (no write off though).

I would assume that that doesn’t compromise our entitlement to redress and compensation as in my opinion I would have never needed the split mortgage, interest only periods ect if they would have given us the option of a tracker when we came of our fixed term instead of the very high SVR at that time.

Any redress and a lower rate will be very welcome after all these years!

 

[Brendan Burgess]

Hi Lickety Split

I cannot comment on any proposal which AIB might offer customers until they publish the details.

But you need to lower your expectations dramatically.

AIB had the most generous split mortgage arrangements of all the lenders

1. They were the only lender to park the warehoused part permanently with no review
2. They were the only lender to write down the mortgage balance. In fact, most of the other lenders refuse to write off the shortfall even after the borrower has lost their home.

You got a great deal.

I have, like most others, had the most torrid time dealing with them over the years.

we negotiated a split mortgage with 8% of the mortgage written off, 32% being parked until end of term and the 60% balance payable on regular variable rate terms. The bank also added 4 years to the overall term of the mortgage which I had to accept grudgingly.

No other lender would have written off any of the mortgage and left you in their home.
No other lender would have parked the warehouse permanently without a review.

If and it's a bit IF , the principles of the Central Bank's previous scheme are applied, then you would be put back in the position you would have been had you been put on the tracker from the appropriate date.

Think about that and you won't like the result.

You have not given us enough numbers, but let me assume it was a mortgage of €600k and that whenever the deal was done, you still owed €600k due to arrears.

In 2011, let's say AIB gave you a tracker of ECB +1.5%.
Fantastic, but would you have been still able to make your full mortgage repayments? I suspect not but only you can answer this.

If you would have been able to make your full mortgage repayments, then you would not have needed a split mortgage.

So today, you would owe let's say €540k as you would have paid down some of the capital.

Under the extraordinarily generous split mortgage you got from AIB, you are now in the following situation:

Real mortgage: €360k (60% of €600k)
Permanently warehoused at 0% interest : €192k. (32% of €600k)

For your sake, I hope that AIB does not offer to put you back in the position you would have been in had they offered you a tracker mortgage back in 2011. You will owe €540k @ 1.5% instead of €360k @ 3.15% with €192k payable in 20 years time.


Brendan

 

[LicketySplit]

Brendan

Firstly, well done on all your endeavor over the years. It has been inspiring to say the least. Congrats on the result.

I believe I am part of the 6,000 but its only when I see something from AIB will I believe it. I have, like most others, had the most torrid time dealing with them over the years.

We took out a significant 3 year fixed mortgage in 2008 just as the world was on the verge of financial implosion.

In 2011, we exited the fixed term and were put straight onto variable rate. With unemployment and other issues, we had to engage with the bank to obtain revised terms including interest only, fixed repayment amount etc. This all came to a head in 2014 when we negotiated a split mortgage with 8% of the mortgage written off, 32% being parked until end of term and the 60% balance payable on regular variable rate terms. The bank also added 4 years to the overall term of the mortgage which I had to accept grudgingly.

Then finally, we received the letter in 2017/18 with the €1650 that we lodged. We didn't appeal as we naturally felt it would impact the split facility we had agreed.

This is the first time I have ever shared this with anyone so it feels good dong that alone - nevermind the possibility of compensation and redress.

My question is do you believe the above split facility will compromise any or all redress I might stand to gain from following this weeks announcement.

Thanks

Thanks for your response.

You echo our thoughts precisely. Hence we didn't ever contemplate appealing last year when the €1600 was received. We shall see what they say. Thanks again.