What type of properties are included in the redress scheme?

Status
Not open for further replies.
D

Dan Murray

Guest
According to the Central Bank's FAQ....

What type of mortgage is covered by the Examination?

The Examination covers all lenders that offered tracker mortgages to customers, including mortgages used for a family home or an investment property.

For the avoidance of doubt, does the redress scheme cover non-residential investment properties or is limited residential loans?
 

elacsaplau

Frequent Poster
Messages
568
Hi Dan,

My understanding was that the Redress Scheme was for residential only - I'm surprised by the quoted FAQ.
 
Last edited:

IdesofMarch

Frequent Poster
Messages
290
No, my understanding is the tracker redress programme is also available to companies with an annual turnover of less than 3 million euro. (Same criteria as FSO). Ger Deering when in front of the PAC committee, said he would look at all tracker mortgage complaints from companies (with above turnover or less) as well as individuals. All that is required is a final response from the financial institution concerned.
 
D

Dan Murray

Guest
Hi Ides & Elac,

Seems to be a bit of confusion here!

Ides, to be sure to be sure, are you saying that:

- (a) Ger Deering would look at all tracker complaints (so long as the €3m ceiling isn't breached), or

- (b) All tracker complaints (so long as the €3m isn't breached) should fall into the redress scheme irrespective of the property involved.

I'm reading your post as a confirmation to (a) above - whereas I'm really enquiring about (b)!!
 

IdesofMarch

Frequent Poster
Messages
290
Hi Ides & Elac,

Seems to be a bit of confusion here!

Ides, to be sure to be sure, are you saying that:

- (a) Ger Deering would look at all tracker complaints (so long as the €3m ceiling isn't breached), or

- (b) All tracker complaints (so long as the €3m isn't breached) should fall into the redress scheme irrespective of the property involved.

I'm reading your post as a confirmation to (a) above - whereas I'm really enquiring about (b)!!

The CBI's framework for tracker redress for in scope mortgage accounts states it can be for private dwellings houses and btl properties. In my opinion this does not exclude commercially let properties. Maybe it will come down to that old nugget of what a consumer is?
 

RedOnion

Frequent Poster
Messages
3,132
The original question has nothing to do with the customer type, or definition of consumer. It's to do with the type of security and loan structure. The scope of the examination only covers Mortgage products. If not almost every commercial loan issued on a EURIBOR basis would be in scope for review.

Dan, I'm not sure what angle you're looking for, but some of the finance committee debates with Philip Lane might be interesting reading.
https://beta.oireachtas.ie/en/debates/debate/joint_committee_on_finance_public_expenditure_and_reform_and_taoiseach/2017-10-19/2/
 
D

Dan Murray

Guest
Hi All,

The only question I have is whether non-residential properties are covered in the redress scheme or not.

To me, it seems that the term "buy-to-let properties" implies residential properties. Ides hols a different view. Which one is correct?

Jim - I don't understand why you have said "all claims that relate to a breach of contract" are covered. There is specific criteria for the cases that are included in the redress scheme - the redress scheme does not include all cases were a breach of contract is being disputed.
 

IdesofMarch

Frequent Poster
Messages
290
Hi All,

The only question I have is whether non-residential properties are covered in the redress scheme or not.

To me, it seems that the term "buy-to-let properties" implies residential properties. Ides hols a different view. Which one is correct?

Jim - I don't understand why you have said "all claims that relate to a breach of contract" are covered. There is specific criteria for the cases that are included in the redress scheme - the redress scheme does not include all cases were a breach of contract is being disputed.
Non residential properties are covered by the tracker redress. However the regulatory framework in the CBI guidelines refer to various consumer codes, so maybe email the CBI with your query to get a definitive answer
 

IdesofMarch

Frequent Poster
Messages
290
Interesting. Any basis for that claim?
Most commercial loans, as Red Onion has previously stated, track the euribor rate. This rate is a publicly quoted rate that both the borrower and the regulatory body can track, so it comes within the description of what a tracker interest rate is within the CBI guidelines. (See 3.4.1 of CBI December 2015 framework guidelines)
 

Sarenco

Frequent Poster
Messages
5,499
Most commercial loans, as Red Onion has previously stated, track the euribor rate. This rate is a publicly quoted rate that both the borrower and the regulatory body can track, so it comes within the description of what a tracker interest rate is within the CBI guidelines. (See 3.4.1 of CBI December 2015 framework guidelines)
It's certainly true that the interest charged on a lot of commercial (non-residential) loans is linked to EURIBOR. However, it doesn't necessarily follow that they are included in the Central Bank's redress scheme.
 

IdesofMarch

Frequent Poster
Messages
290
It's certainly true that the interest charged on a lot of commercial (non-residential) loans is linked to EURIBOR. However, it doesn't necessarily follow that they are included in the Central Bank's redress scheme.


With all due respect it does not say that these loans are excluded. These rates do come within the CBI's own framework guideline description of what a tracker interest rate is. One can only take the CBI's framework guidelines at face value as you read them. Email the central bank at enquiries@central bank.ie to seek clarification on the issue if it troubles you.
 

IdesofMarch

Frequent Poster
Messages
290
Here is the extract from the CBI's Framework for conducting a mortgage tracker review that gives a definition of what a tracker interest rate is. The current CBI's investigation is to see whether these tracker rates were correctly applied by financial institutions. That is the nuts and bolts of the investigation.

"For the purposes of the Examination, a “Tracker Interest Rate” refers to the interest rate applied to a mortgage product: 1) which tracks a rate which comes from a publicly available source which can be verified by both the customer and the regulated entity, including without limitation, a rate that tracks the European Central Bank (ECB) main refinancing operations rate; and 2) which is calculated in a manner similar to a rate which falls within 1) above, and includes interest rates calculated on the basis of a fixed rate margin and/or pricing promise.

2 Both enduring and one-off contractual rights and options are to be included within the scope of the Examination."

Why on earth would tracker mortgages that track the euribor be excluded?
 

Sarenco

Frequent Poster
Messages
5,499
With all due respect it does not say that these loans are excluded.
I didn't say they were.

You are asserting very baldly that non-residential loans are within scope. I didn't try to contradict you - I just asked you what was the basis for your claim.

So far you've just offered us your opinion as to why you think these loans should be in scope.
 

IdesofMarch

Frequent Poster
Messages
290
I didn't say they were.

You are asserting very baldly that non-residential loans are within scope. I didn't try to contradict you - I just asked you what was the basis for your claim.

So far you've just offered us your opinion as to why you think these loans should be in scope.
What is your basis for concluding that these types of mortgages are excluded ? What I can say, is that the CBI framework for conducting tracker mortgage investigations does not exclude them from such assessment.
 

RedOnion

Frequent Poster
Messages
3,132
The scope is limited firstly to mortgages, and within that to those which track an externally determined rate.
If it's not a mortgage, it's not in scope of this examination.
 

IdesofMarch

Frequent Poster
Messages
290
Again, I didn't say that they were excluded.

I just asked you to back up your claim that they were in scope. You haven't so far.


I can't do that as I would be breaching client confidentiality, suffice to say that commercial borrowers are indeed included. Maybe you should contact the CBI and ask Dervil Rowland to state in writing to you that commercial borrowers are included within the framework and post same to this forum. I, on the other half, have no reason to back up my claim. Commercial borrowers affected may p.m. me anytime. Sarenco, please do not waist any more of my valuable time as I will not be responding to your posts relating to this particular subject matter, but, from past behaviour, you will probable post some smart reply anyway!
 

IdesofMarch

Frequent Poster
Messages
290
The scope is limited firstly to mortgages, and within that to those which track an externally determined rate.
If it's not a mortgage, it's not in scope of this examination.
If there is a mortgage charge on your commercial property you have a mortgage as opposed to a loan (secured as oppose to unsecured). So most commercial mortgage holders are in scope.
 
Status
Not open for further replies.
Top