Monday 23 September 2019

Revealed: More than 100 families and investors lost their homes in tracker mortgage scandal

(Stock photo)
(Stock photo)
Charlie Weston

Charlie Weston

MORE than 100 families and investors lost their houses due to banks denying them a low-cost tracker.

And another 3,000 cases have been admitted to by banks where mortgage holders should have had a tracker, or were given the wrong interest rate on their tracker, the Central Bank said.

But some banks are refusing to compensate some customers denied a tracker mortgage, with other lenders making “unacceptably low” offers of compensation, the Central Bank said.

It is understood the Central Bank is continually having to challenge lenders over how they are handling the overcharging scandal.

Lenders are supposed to restore affected customers back to their cheap tracker rates, refund the over payments and pay compensation.

The regulator said it has forced two unnamed lenders to go back and reconsider how they are carrying the probe of the overcharging.

In a statement, it said: “The Central Bank is concerned that two lenders may have failed to identify populations of impacted customer or failed to recognise that certain customers have been impacted by their failures.”

Two years ago the Central Bank told 15 lenders to probe their mortgage books to identify customers wrongly denied a good-value tracker during the financial collapse.

Now an extra 3,000 cases of tracker loss have been identified by the probe since March.

This takes the total to 13,000, the Central Bank said.

Another 7,100 cases have already been settled, including 1,300 Permanent TSB cases.

The Central Bank said the numbers will rise further, with some estimates putting the total at 30,000.

Most homeowners were wrongly denied a tracker rate, after opting for a fixed rate for a period. Another 40pc kept their tracker but were put on the wrong margin.

Tracker mortgage rates are set at a percentage over the European Central Bank, and tend to be far cheaper than variable or fixed rates. Most are set at 1pc over the ECB rate.

And in an update from the Central Bank on the tracker redress process it emerged that 23 residential mortgage holders lost their homes due to the “failings” of lenders.

Another 79 buy-to-let properties were lost due to tracker denial cases.

In a briefing note, the Central Bank warned: “As lenders’ analyses continue, this number will rise.”

Springboard, a former division of Permanent TSB, has already been fined €4.5m.

The Central Bank is engaged in what it calls enforcement action against Ulster Bank and Permanent TSB.

Two other unnamed lenders are now facing enforcement action, with more lenders expected to be face legal actions from the regulator.

Regulators are unable to name these institutions because of legislative restrictions and because any naming of them ahead of a final settlement could jeopardise cases against them.

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