Banks sold thousands of trackers to vultures after admitting overcharging homeowners

BANKS sold thousands of tracker mortgages to vulture funds – despite having to admit they overcharged on them.

The trackers were regarded as non-performing, even though the borrowers involved were overcharged.

A total of 2,315 tracker accounts were sold to vultures by the State’s five retail banks where the tracker account holders were overcharged. This was done by being denied a tracker or being put on the wrong tracker interest rate.

The figures were obtained by the Oireachtas Finance Committee and released by Sinn Féin’s Pearse Doherty.

Mr Doherty said many of these mortgage holders would not have ended up in arrears if they had not been denied their rights to keep their low-priced trackers.

The mortgages were sold by AIB, Bank of Ireland, Permanent TSB, KBC Bank Ireland, and Ulster Bank.

Of the trackers, 396 were sold to the vultures before the Central Bank ordered an investigation into the scandal in 2015. This means they moved before any compensation was paid.

Mr Doherty said: “That more than 2,300 mortgage holders, who were overcharged and ripped off by the banks, then had their loans sold to vulture funds is a kick in the teeth.

“Many of these homeowners are now paying the price with massive increases in their interest rates.

“Even worse, nearly 400 were sold before they even received compensation under the Central Bank’s Tracker Mortgage Examination.”

He said the Central Bank’s tracker probe had the aim of returning people to the position they were in before being overcharged.

The logic of this is that the affected mortgages should now go back to the original lenders rather than remaining “prisoners of the vultures”.

Following questioning at a recent Oireachtas Finance Committee, the five banks have replied to the committee outlining the number of trackers sold that were subject to the tracker mortgage probe.

AIB sold the most trackers to vulture funds where customers were overcharged, with the sale of 705 mortgages. The committee was told that 471 of these were residential mortgages. AIB said in a letter to the committee: “Eight separate loan portfolio sale transactions took place between 2017 and 2022.

“These comprised one portfolio sale in each of 2017 and 2018; two sales in 2019; three sales in 2021 and a further sale in 2022.”

Bank of Ireland sold 626 trackers, where there was overcharging, to vultures.

In total, 113,000 mortgages have been sold to vulture funds at the behest of the Central Bank. Many of these were sold because they were regarded as non-performing.

The tracker mortgage scandal has cost banks more than €1bn in refunds, compensation and fines.

Lenders have paid out more than €735m in refunds and compensation alone to more than 41,000 borrowers under the Central Bank investigation into the State’s biggest bank overcharging fiasco.

Last September, Bank of Ireland was fined a record €100.5m by the Central Bank in connection with the tracker mortgages scandal.

It was the latest and largest in a series of fines imposed on major lenders in connection with the scandal.

The Bank of Ireland fine was on top of the €186.4m it had already paid to 15,910 affected customers.

A €96.7m fine was imposed on AIB Group last June. AIB was accused by the Central Bank of inflicting “devastating consequences” on almost 13,000 households.