Ulster Bank's proposal to deal with offset mortgages

[Ben Don]

At currents rates, the interest on my mortgage is 800 euro per month

here is the original or what we all signed up to

Yes I have this document but there appears to only be 3 documents, the original FA booklet, the UB April 2023 T&Cs (which is worded differently to the FA booklet) and the new UB Flexible mortgage booklet

Should UB not have a booklet or revised T&Cs for the duration prior to April 2023 that deals with the change of T&Cs from the original FA booklet?
I was never sent any details of this nor was I sent the April 2023 booklet, this seems to have just been slid into the website

 

[zagato]

We received the letter last Monday. It included an ex-gratia amount of €16,852.
That day I hand delivered a letter to Philip Duff M.D. Personal Banking. (the post room gave me a receipt of delivery)
The letter was a simple Complaint about the unilateral change of conditions and asked for a Final responsible letter ASAP.
These are required before you can lodge a complaint to the Financial Ombudsman.
Apparently, each complaint is dealt with "individually" and takes about eight weeks for a response.

After dropping the letter into UB I turned up at the office well known financial adviser in Terenure.
He had been told in advance of the UB move and was sent the press release.
Some legacy bad banking issues are his top priority for the next few weeks.

In his opinion its likely that the bank have agreed a sale already. If not it's because the purchasers want a discount.
If that is happening, and if enough people demanded it, it's just about within the bounds of possibility that we could get a similar deal.

The next day I spoke to a former senior UB guy, to get his opinion.
He thought that the bank was being quite generous by its standards and it has obvious support from the regulator.

What to do next?
In my opinion we should try to co-ordinate and be treated as a group (both UB and ex FA have the same concerns).

We have a €292k with about 12 years to go. Bought our house in 2005 funded by offset F.A. €620k loan on the house and re-financed my flat (separate mortgage). We got a lump sum soon after buying which got us over the hump. For example rom 1/1/08 to 31-3-08 we paid €935 interest instead of €6725.

One question is why the regulator allowing them to look back at only 6 years instead of over the whole mortgage?
Our mortgage is for 30 years. We have to perform as demanded for the entire term.

The "Pay and re-draw" is not the same as a facility account.
In the last recession I spotted at auction to buy 2 flats and 2 shops in D7.
The bank would not release the funds in time. With the offset account I could have moved immediately as it was needed.
I brought an a friend to the auction - he has done very well, while keeping the rents low.


Our "First Active Current Account Mortgage" (as of 22/01/2004) includes in its terms and conditions a right to
"cancel the facility to make withdrawals or transfer from the Facility Account entirely" for various reasons including

(v) on giving you 30 days notice at any time.

Most commercial loans that I've had have a similar ability to call in the loan without cause but it is not used in normal banking.

 

[RichInSpirit]

Before this offer I was thinking that since Ulster Bank were leaving Ireland anyway, that I might approach them with an offer of my own.
They give me no discount on my mortgage but give me a fixed rate of 3% with a 10% overpayment ability and sell me to a remaining Irish bank. But I hadn't got around to it yet.
I have just run the figures for the 10 Jan 2024 and the 3% fixed rate would knock €12500 off my Interest bill for the life of the mortgage versus the €5250 payment on the 10 January.
And if I paid the €5250 payment straight into my mortgage account on 10th January I would save only €2000 in interest over the life of my mortgage.
I would in the long term be €10500 better off not taking the money and going on a 3% fixed rate.
(My mortgage is currently at 5.65%).

Edited. My overall savings figure of €10500 is incorrect. I was only looking at interest savings but not at capital savings. Overall the 3% fixed rate would only save me €5685.00.

 

[fliball123]

We received the letter last Monday. It included an ex-gratia amount of €16,852.
That day I hand delivered a letter to Philip Duff M.D. Personal Banking. (the post room gave me a receipt of delivery)
The letter was a simple Complaint about the unilateral change of conditions and asked for a Final responsible letter ASAP.
These are required before you can lodge a complaint to the Financial Ombudsman.
Apparently, each complaint is dealt with "individually" and takes about eight weeks for a response.

After dropping the letter into UB I turned up at the office well known financial adviser in Terenure.
He had been told in advance of the UB move and was sent the press release.
Some legacy bad banking issues are his top priority for the next few weeks.

In his opinion its likely that the bank have agreed a sale already. If not it's because the purchasers want a discount.
If that is happening, and if enough people demanded it, it's just about within the bounds of possibility that we could get a similar deal.

The next day I spoke to a former senior UB guy, to get his opinion.
He thought that the bank was being quite generous by its standards and it has obvious support from the regulator.

What to do next?
In my opinion we should try to co-ordinate and be treated as a group (both UB and ex FA have the same concerns).

We have a €292k with about 12 years to go. Bought our house in 2005 funded by offset F.A. €620k loan on the house and re-financed my flat (separate mortgage). We got a lump sum soon after buying which got us over the hump. For example rom 1/1/08 to 31-3-08 we paid €935 interest instead of €6725.

One question is why the regulator allowing them to look back at only 6 years instead of over the whole mortgage?
Our mortgage is for 30 years. We have to perform as demanded for the entire term.

The "Pay and re-draw" is not the same as a facility account.
In the last recession I spotted at auction to buy 2 flats and 2 shops in D7.
The bank would not release the funds in time. With the offset account I could have moved immediately as it was needed.
I brought an a friend to the auction - he has done very well, while keeping the rents low.


Our "First Active Current Account Mortgage" (as of 22/01/2004) includes in its terms and conditions a right to
"cancel the facility to make withdrawals or transfer from the Facility Account entirely" for various reasons including

(v) on giving you 30 days notice at any time.

Most commercial loans that I've had have a similar ability to call in the loan without cause but it is not used in normal banking.

Zagato can you keep us updated as to how you progress if your gong the legal route?

 

[Keninf]

Hey Fliball, Don't wait for Zagato to come back. From his post he has to go through Ulster Bank complaints(who knows how long that will take) and then 8 weeks with regulator. You could be talking months!!

You need to instigate your own official complaint (make sure it's by procedure) ASAP. Then join up with others with complaints lodged.

 

[ClubMan]

Hey Fliball, Don't wait for Zagato to come back. From his post he has to go through Ulster Bank complaints(who knows how long that will take) and then 8 weeks with regulator. You could be talking months!!

And if it's a legal route via a solicitor/court rather than customer complaint/final response letter/FSPO case then it could be years! Sounds to me like those who are not happy should probably go the latter route?

 

[Maybemoving]

Hi everyone, great to see this discussion since the announcement. I’ve a question please in light of these recent developments and for anyone in similar situation…

We have been considering paying down a third of our mortgage balance and bringing in the term from 13 to 7yrs on same monthly payment. Funds are sitting in our facility a few months.

Our FA advised us (this summer) to do this before we move our mortgage / book is sold and then consider fixing for 7 yrs with a new lender.

Just wondering if this is now an option or does accepting the ex gratia mean we can’t restructure the term of the loan? If we can, should we request that the exgratia is then recalibrated? Plan to go back to our FA as I don’t trust we’ll get impartial advice from UB.

Our ex gratia offer is 8% of our current mortgage balance but I don’t have the nous or wherewithal to calculate if this is correct.
Many thanks!

 

[Keninf]

Take the payment. You can move mortgage at anytime after!! Nothing with the payment stops you moving

 

[Target106]

When all is done and dusted with the offset aspect of the loans, and they are sold off to a fund (some suggestions that a deal is already agreed) What are the chances of getting a cut price settlement from whatever fund buys the book? I assume they wont buy them at a huge discount as the majority of the loans at least, probably aren't distressed loans. Has anyone got any thoughts on the likelihood of getting a deal? and if a discount is a possibility, what kind of percentage might the reduction be?

 

[RichInSpirit]

What are the chances of getting a cut price settlement from whatever fund buys the book?

I don't think you will get a deal from whoever purchases the book.

But there is a deal here on the table at the moment.
And maybe a bit of room for negotiation with Ulster Bank at the moment.

 

[Maybemoving]

Take the payment. You can move mortgage at anytime after!! Nothing with the payment stops you moving

That’s what I’m thinking too. Just wondering if UB are allowing customers to alter their terms/balances. One of us has recently moved jobs and we’ll be restructuring the new lower amount off one salary while the other is on probation period.

 

[zagato]

All of us have different circumstances, mine is that most of my offsetting was more than 6 years ago.

This is an email that I've just sent to [email protected]

Hello,
I was heartened to find this mission statement in the Central Bank’s website.
Our Culture Statement - Who we are, what we do, and how we do it.
Protecting people is at the heart of everything we do. We provide economic analysis, statistics and commentary to inform decisions about what the country needs. We set standards to protect consumers, and regulate and supervise financial service providers and markets, taking enforcement action when we need to. We are responsible for Ireland’s payment systems and for the provision of its currency.


Could you please send me the contact details for the banks leading person(s) who have been handling U.B.’s departure (with specific relevance to the offset removal)?

I can understand that there are many wheels revolving in order to allow the safe departure of a pillar bank.

Those of us who are directly affected do not want to be grist to the mill in this process.

The Central Bank’s protection of customers should be informed by informed customers.

The customers should have been kept in kept in the loop as these proposals were being designed.

The mortgage contract involves the both lender and the borrower with the Central Bank acting as referee.

In a normal contest the referee blows the whistle as the game proceeds, and does not give a list of dis-allowed goals at the final whistle.


One issue that affects my personal dealings is the 6 year look back for assessing the ex-gratia payment.

Our mortgage is for 30 years and we are expected to perform over the whole term.

I contend that the entire term length should therefore be used to assess the amount for any ex-gratia payment.



Best Wishes,

 

[fliball123]

All of us have different circumstances, mine is that most of my offsetting was more than 6 years ago.

This is an email that I've just sent to [email protected]

Hello,
I was heartened to find this mission statement in the Central Bank’s website.
Our Culture Statement - Who we are, what we do, and how we do it.
Protecting people is at the heart of everything we do. We provide economic analysis, statistics and commentary to inform decisions about what the country needs. We set standards to protect consumers, and regulate and supervise financial service providers and markets, taking enforcement action when we need to. We are responsible for Ireland’s payment systems and for the provision of its currency.


Could you please send me the contact details for the banks leading person(s) who have been handling U.B.’s departure (with specific relevance to the offset removal)?

I can understand that there are many wheels revolving in order to allow the safe departure of a pillar bank.

Those of us who are directly affected do not want to be grist to the mill in this process.

The Central Bank’s protection of customers should be informed by informed customers.

The customers should have been kept in kept in the loop as these proposals were being designed.

The mortgage contract involves the both lender and the borrower with the Central Bank acting as referee.

In a normal contest the referee blows the whistle as the game proceeds, and does not give a list of dis-allowed goals at the final whistle.


One issue that affects my personal dealings is the 6 year look back for assessing the ex-gratia payment.

Our mortgage is for 30 years and we are expected to perform over the whole term.

I contend that the entire term length should therefore be used to assess the amount for any ex-gratia payment.



Best Wishes,

Did you get a response from Ulster bank themselves?

 

[zagato]

Did you get a response from Ulster bank themselves?

No response yet- I'm sure that it will weeks

 

[Target106]

I don't think you will get a deal from whoever purchases the book.

But there is a deal here on the table at the moment.
And maybe a bit of room for negotiation with Ulster Bank at the moment.

That's what I suspected. I suppose it depends on the type of fund that buys the book although I imagine the fact that most of these only have approx 10 years left on them interest rates are high for the foreseeable future, it's unlikely they will be looking for a quick buck to offload them, unlike distressed loans.

Oh well..... there goes that dream!

 

[aoraki]

I don't think you will get a deal from whoever purchases the book.

But there is a deal here on the table at the moment.
And maybe a bit of room for negotiation with Ulster Bank at the moment.

Yeah, I think you're 100% spot on there. Whoever buys this book will have a loan book of standard tracker mortgages on their hands, admittedly it sounds like they'll have to accommodate this "Pay and Redraw" feature that UB have mentioned, but I can't see that being utilised in the same way as the Offset feature that we have now. Plus they will probably have T&Cs saying that they can get rid of that at their discretion. So they won't have this pesky Offset issue hanging over them and can manage those mortgages in a normal fashion and take the interest payments.

If anybody wants to try do a deal, now is the time.

 

[fliball123]

Does anything think there would be a deal for the redemption figure as in if they are selling they may give the customer the same discount?

 

[Target106]

Does anything think there would be a deal for the redemption figure as in if they are selling they may give the customer the same discount?

I'd love to think so but I doubt it. This isn't like a normal firesale of a distressed loan book. As Aoraki says, now is the best chance of any kind of deal.

​

 

[Aniascor]

Are many people still waiting on their letters from Ulster Bank? No sign of ours yet.

 

[Target106]

Are many people still waiting on their letters from Ulster Bank? No sign of ours yet.

No sign of mine yet either