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Governor of the Central Bank Philip Lane at a meeting of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach today

Further to reports that 8,200 mortgage accounts – in which homeowners were overcharged because they were wrongly denied low interest tracker rates by 15 banks – had been identified by the Central Bank…

From a meeting of the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach today…

Related: Central Bank says 8,200 accounts now identified in tracker mortgage overcharging scandal (RTE)

64 thoughts on “How Many?

  1. Baffled

    Even if it is shown to be 15,000 accounts that is still only 1% of the stock of mortgages at the time this issue arose.

    The banks did wrong and will have to pay accordingly, but this issue is being blown out of proportion.

    1. Clampers Outside!

      Not if you’re one of the 15,200 who missed a tracker mortgage rate and lost their home as a result, which has been the case for a number of them.

      Losing one’s home is not something to be described as being ‘blown out of proportion’.
      In fairness.

      1. Owen C

        The 15200 appears to be a mix of people who lost out on trackers (seriously costly impact) vs had an element of overcharging (much less so). So need to get clarification on the breakdown of this. For clarity, both are things which are wrong and shouldn’t have happened, but the loss of a tracker mortgage rate is probably around 10x as large a cost vs the overcharging issue.

        1. Fact Checker

          @Owen C

          You say 1 this only affects per cent of accounts but 15k*100=1.5m.

          This is almost certainly wrong. The Central Bank notes only 738k mortgage accounts at last count. So more like 2%.

          And while one is too many, the number of people tipped into repossession is likely to have been quite small given how slow the process is in Ireland.

          1. Owen C

            @ Fact Checker

            you means that to reply to Baffled. And Baffled probably mixed up stock of mortgages with stock of owner occupied houses.

          2. Cian

            Wait, when it says “around 15,00 people will have been affected ” rather than the earlier report of “8,200 accounts” is this comparing apples and oranges? Is it possible there were 8,200 mortgages, but some of there mortgages were joint mortgages, so there are a total of 15,000 people affected?
            Or are they saying that there were 15,000 mortgages affected?

      2. Anne

        What do you mean missed out on a tracker rate? My understanding of this is that they were on tracker mortgages and the banks took them off them without the customer’s permission.

        1. Owen C

          No. In most situations (not all, but most), they were on tracker rates and then chose voluntarily to go onto fixed rates for a period of time (eg 3yrs). At the end of that 3yr period, they were put onto standard variable rates in most cases, or simply not offered the option of a tracker rate, even after protest etc. In many cases the original documentation actually backs up the banks position (that they were not obliged to put them back on a tracker rate), but the CBOI view is that the financial impact of losing your tracker rate was so big that this should have been better explained to the customers when they were going onto the fixed rate (ie they should have received or been advised to seek formal financial advice)

          1. Anne

            Ah they wouldn’t not explain the tens of thousands of euro extra they were going to squeeze out of their customers by getting them onto fixed rates, would they?

            I’ve heard of people being offered all sorts of financial rewards to come off their tracker mortgages… I don’t think the banks are explaining it when they’re offering customers 1500 or whatever the sum, that they’re going to be squeezing tens of thousands extra out of customers if they get off their trackers.

            I’ve heard the banks are very persistent in these cash offers too.

          2. Anne

            “In many cases the original documentation actually backs up the banks position (that they were not obliged to put them back on a tracker rate)”

            Eh that’d be wrong.
            http://www.permanenttsbgroup.ie/media/press-releases/2015/28-07-2015.aspx

            Permanent tsb:
            The circumstances in which permanent tsb’s failures arose are as follows:

            permanent tsb failed to inform certain customers fully of the consequences of their decisions to break from a fixed rate or discounted tracker rate early. The consequences of breaking early were that customers lost their contractual right to be offered a tracker rate in the future (at the time that their fixed rate or discounted tracker period would have ended) and
            Other customers had a contractual right to be offered a tracker rate at the end of any fixed rate period. However due to a failure by permanent tsb that option was not communicated to them at the end of their fixed rate period.

          3. Anne

            Other customers had a contractual right to be offered a tracker rate at the end of any fixed rate period. However due to a failure by permanent tsb that option was not communicated to them at the end of their fixed rate period.

          4. Anne

            Yeah, thanks for the misinfo Owen..

            How do I feckin bold?

            Other customers had a contractual right to be offered a tracker rate at the end of any fixed rate period. However due to a failure by permanent tsb that option was not communicated to them at the end of their fixed rate period.

          5. Owen C

            Anne, re read what i said again:

            “In many cases…”

            Now look at Philip Lane’s comments today:

            “The fair treatment of tracker mortgage borrowers has been a key supervisory and policy focus for the Central Bank and our consumer protection framework requires all lenders to act in the best interests of consumers and, in particular, requires lenders to disclose material information to consumers to enable them to make informed decisions. ”

            My comments are 100% correct and your ability to read properly is what is circumspect.

          6. Sheik Yahbouti

            Don’t use words whose meaning you don’t understand, Owen. “your ability to read is ‘circumspect’?!?

          7. Anne

            “In many cases the original documentation actually backs up the banks position (that they were not obliged to put them back on a tracker rate)”

            Other customers had a contractual right to be offered a tracker rate at the end of any fixed rate period. However due to a failure by permanent tsb that option was not communicated to them at the end of their fixed rate period.

            You were wrong Owen.. Just admit it.
            Where’s my apology?

          8. Owen C

            Anne, do you understand what the phrase “in many” means? Its ok if you don’t, but its really the starting place for this conversation.

          9. Anne

            Just apologise Owen.. Do you know what it means?
            C’mon, tis not that difficult.

            Sorry Anne.. go on, CTRL C, and CTRL V that..

          10. Cian

            Anne: you actually quoted “permanent tsb failed to inform certain customers fully of the consequences of their decisions to break from a fixed rate or discounted tracker rate early. The consequences of breaking early were that customers lost their contractual right to be offered a tracker rate in the future (at the time that their fixed rate or discounted tracker period would have ended) ”

            ..which is in agreement with what Owen said “In most situations (not all, but most), they were on tracker rates and then chose voluntarily to go onto fixed rates for a period of time (eg 3yrs). At the end of that 3yr period, they were put onto standard variable rates in most cases, or simply not offered the option of a tracker rate […]”.

            The only difference is that Owen states this was the majority of cases, your quote it doesn’t define which option was the greater. So Owen isn’t wrong.

          11. Owen C

            Anne, you are basically the “I don’t know what a tracker mortgage is” participant is in this thread. Which is ironic, obviously.

          12. Anne

            Here Cian –

            Other customers had a contractual right to be offered a tracker rate at the end of any fixed rate period. However due to a failure by permanent tsb that option was not communicated to them at the end of their fixed rate period.

          13. Anne

            That’s for you too Owen C.

            Maybe the banks themselves didn’t know the contractual agreements of some – many many it seems, of their tracker mortgages.

            Even when they were informed of the contractual rights by the affected customers – many many customers. Not all now mind you.

            Apology? I’ll be waiting..

          14. Cian

            Anne: “In most situations (not all, but most), they were on tracker rates and then chose voluntarily to go onto fixed rates… “

          15. Anne

            Cian, contractually customers had a right per the mortgage agreement to revert back to their tracker rate.

            The gougers didnt want this.

            Is there some part of that you’re not getting?

    2. Daddy

      @Baffled.

      The number of people affected does not determine the scale of the wrong done unto them.

      Very few people are murdered each year but each one is catastrophic.

      Very few people’s houses are burgled but each one can be devastating.

      Searching for reasons to talk down this scandal suggests you have a vested interest in this going away.

        1. Ken Fresno

          @Baffled, you also said “this issue is being blown out of proportion.”, which is pretty ambiguous. Try telling someone who lost their home as a result of this bullshit that it’s being blown out of proportion. Especially in the middle of a homelessness crisis.

      1. ahjayzis

        Come on, now. We all know the people who defend the likes of the banks are sad, broke, wannabes with delusions of success.

  2. Sheik Yahbouti

    I know you should never judge a book by its cover but, have you ever seen a more dishonest looking creeping jesus than the current Governor of the Central Bank? He takes issue with John McGuinness does he? Well he can eff off.

  3. Anne

    I was wondering how they picked and chose the relevant tracker mortgage customers to swindle, as presumably the 15 banks would have more than the 8000 odd tracker mortgages mentioned above there.

    It seems customers who were on tracker mortgages, who fixed their payments for a period were not given the option to revert to their tracker mortgage. Bunch of ladyparts.

    1. Owen C

      The 8000 is simply the number of people who were on a tracker mortgage at the time in question (mainly 2007-2011) and who moved onto a fixed rate during this period, and then were denied the tracker rate when they came off them. They were actually pretty indiscriminate in their approach.

      1. Anne

        Oh I’d say they were very deliberate in trying to entice and mislead people off of their tracker mortgages..

      2. Anne

        I’ve heard of cases too where people were moved off their tracker mortgages without ever agreeing to move to a fixed rate mortgage..just the bank felt like gouging them, indiscriminately, as you say.

        1. Owen C

          Im somewhat skeptical of that happening outside of a restructuring or change of use (ie you started renting out your home). I have heard of no cases where someone just lost their tracker/was put on a fixed rate without their permission.

          1. Owen C

            Ive read that statement numerous times. Nowhere does it suggest people were just moved off tracker rates and onto fixed rates without any discussion or permission involved. In fact, in the two specific examples it uses, this was not what happened.

          2. Owen C

            Anne, lets be clear, you suggested people had been moved from tracker rates to fixed rates without their permission. You have failed miserably to back up that claim.

          3. Owen C

            where were they moved off their tracker rates without their permission? Where is the link to that evidence? You haven’t provided it! As opposed to not being put back on them, which is a different situation..

          4. Anne

            “which is a different situation..”

            Not really.

            Contractual agreements mean nothing to the gougers it seems.

            “Sorry” ?

          5. Owen C

            Anne, you suggested a very specific outcome where “people were moved off their tracker mortgages without ever agreeing to move to a fixed rate mortgage”. I said i was skeptical of this happening without another event happening first. You told me i would be wrong to think like this and then posted a link to a different situation. You have provided zero evidence that the specific case you said you had heard about actually happened. Zero.

        2. Anne

          “where were they moved off their tracker rates without their permission?”

          What do you mean ‘where’ btw? Here, where else. They’d hardly get away with it anywhere else.

          The banks didn’t adhere to the tracker rates they agreed to with some customers, here.
          Gouged. Fleeced. Overcharged as you say..

  4. Anomanomanom

    So when did banks stop offering tracker mortgages. Just wondering because I was never offered the chance of having one.

    1. Owen C

      2009/10ish. Basically Euribor (the rate at which banks generally borrow from each other) and the ECB base rate (which trackers are referenced off), used to be really close to each other, move in the same direction and by similar amounts, and so were good proxies for each other. If Euribor increased and it cost a bit more money to borrow from another bank, then the ECB rate had probably gone up as well so they could charge customers more on tracker mortgages, so it was net net the same. But during the financial crisis, banks stopped trusting each other and euribor went up by a lot, even if the ECB cut rates or just kept them on hold. So banks started having large open risk between the cost of borrowing (euribor) and the cost of lending (ecb rate). This became particularly problematic for banks borrowing a lot of money from the ECB (ie the irish banks) but who were under pressure to reduce this.

      1. Cian

        It’s strange that the banks didn’t offer tracker rates pegged to Euribor then. Although when I write this it seems that this is just a “Standard Variable Rate” mortgage :-)

        On second thoughts, its strange the banks ever created Tracker Mortgages (to ECB rates). In hindsight it was an incredibly stupid and risky thing to do.

        1. Owen C

          Blame Bank of Scotland, they were the first to introduce it. All the others followed. In fairness, it was a move to a very transparent pricing mechanism, which was good for customers. Just no one foresaw what would happen on bank funding markets and the inflexible pricing on the trackers from the banks’ point of view.

          The Euribor tracker rates were/are sold in Spain, but the real issue you’d have there is volatile rates changing every single day of the week, vs ECB at most once a month or SVRs usually only every few months. So customers would never really know what the exact rate on a given day was going to be.

          1. Anne

            ” Just no one foresaw what would happen on bank funding markets and the inflexible pricing on the trackers from the banks’ point of view. ”

            The poor auld banks and the inability to gouge with a tracker..

            t’s great to have you here to tell us things from the bank’s point of view.

          2. Owen C

            Anne, you know the way we had to bail out the banks? Any chance some of those losses related to crappy loans on their balance sheets like tracker mortgages? May be useful to understand how the issue looks from the bank’s perspective given that we still own so much of them.

          3. Anne

            ” some of those losses related to crappy loans on their balance sheets like tracker mortgages?”

            There you go again with your ‘some’ and ‘many’ talk.

            Bondholders were ‘bailed out’ Owen. Irish mortgage holders, not so much.

        2. Fact Checker

          In Spain you could get a tracker over Euribor. Not sure if you can anymore.

          Mature mortgage markets (France, Germany) offer fixed rates over very long terms, 10-20 years.

          This should be what the Irish mortgage market would look like ideally as you would have much less price volatility.

          I presume the lack of long-term fixed rate options offered by Irish banks is a reflection of the fact that it is difficult for them to get matching funding.

          In turn,I presume it is something to do with a small market and low status of collateral. Irish banks have historically not been very innovative except in the wrong ways either.

  5. gringo

    Why do all these bankers engage in this kind of thievery? Is it something they learn in their private schools?

  6. Junkface

    The banking sector in Ireland Robbing cants!

    Its like the Wild West, there’s no repurcussions for their crimes. What kind of country is Ireland? Unfair and unjust.

    F*** you Fine Gael! Scum

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