Sunday 19 November 2017

Tracker mortgage scandal is 'systemic', Central Bank governor

Central Bank Governor Philip Lane Photo: Tony Gavin
Central Bank Governor Philip Lane Photo: Tony Gavin
Charlie Weston

Charlie Weston

CENTRAL Bank governor Philip Lane has admitted the denial of good-value tracker mortgages to thousands of home owners was a system wide problem in the banks.

Updating TDs and senators on the tracker scandal he said there was a culture in banks of interpreting mortgage contracts in favour of lenders and not in favour of consumers.

He told the Oireachtas Finance Committee this morning: “There is a systemic and widespread aspect to this.”

He told Fianna Fáil’s finance spokesman Michael McGrath the Central Bank it had ordered 15 banks to examine their mortgage books because it feared the problem of denying people trackers was so extensive.

“Underlying it all is a cultural issue of interpreting contracts in favour of lenders and not in favour of consumers and that is ultimately a cultural issue.”

Last month the Central Bank said lenders had paid €78m to 2,600 affected customers by the end of February.

Some 9,900 customer accounts had been identified as impacted by lenders as part of its examination, which was ordered in December 2015.

Some 15 lenders have been ordered to examine their mortgage books to see if they incorrectly took trackers off customers during the downturn.

It is estimated that around 100 people lost their homes due to the scandal, but the new update from the Central Bank does not outline how many people ended up losing their homes due to the over-charging.

The amount paid out in interest refunds is just €78m so far. The final figure could be as high as €500m.

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