Tuesday 20 August 2019

Tracker mortgage scandal: Brazen banks refuse to own up to 10,000 cases

Scandal probe: Watchdog accused of ending investigation prematurely as 99 families lost homes

Brazen banks refuse to own up to 10,000 cases
Brazen banks refuse to own up to 10,000 cases
Charlie Weston

Charlie Weston

Banks are resisting attempts to own up to almost 10,000 more tracker scandal cases.

It comes as the now completed Central Bank probe into the tracker controversy has concluded 40,100 mortgage accounts were affected.

The probe has found 99 homes were lost due to the scandal.

Another 216 buy-to-let properties were lost due to the failures of the banks.

Close to €700m has now been paid to affected mortgage holders, with most of it paid by the country’s five largest banks.

However, a leading tracker recovery expert says there are close to 10,000 more cases where mortgage holders have so far failed to get a tracker back, or have been put on the wrong tracker rate.

Tracker mortgage restoration expert Padraic Kissane
Tracker mortgage restoration expert Padraic Kissane

Banks are holding out on these cases, with the Central Bank admitting it has worked “to the limit of its mandate” to get the lenders to concede more cases.

Tracker restoration expert Padraic Kissane said he was disappointed with the final report into the tracker scandal from the regulator.

“It is really disappointing the regulator does not have the power or the persuasive ability to do this properly,” he said.

Fianna Fáil finance spokesman Michael McGrath said the Central Bank had “essentially come down on the side of the banks in respect of all cases that remain in dispute”.

He accused the regulator of ending its tracker supervisory work prematurely, given that there are so many disputed cases.

Cases where the banks are refusing to admit there is a tracker issue, or have failed to deal with it in a way that is acceptable to borrowers, include:

:: Some 2,500 cases at Permanent TSB where people were put on a tracker, but with a margin of 3.25pc over the European Central Bank rate, which is not considered to be a tracker;

:: Around 700 cases at Ulster Bank where customers did not start their mortgage on a tracker. They subsequently went on a tracker rate, but then fixed. After that they were denied a tracker;

:: Up to 300 cases at KBC where existing customers were denied a tracker after fixing;

:: Between 200 and 300 cases at Danske Bank where the lender has refused to restore some borrowers to a tracker;

:: Some 5,600 cases at AIB where the bank admitted these people should have been given a tracker, but has not given them one. Instead, it has paid them just €1,615 for the failure to give them a tracker when their fixed rates expired;

:: Roughly 200 cases of staff and former staff at Bank of Ireland who say documents they have clearly show they should have trackers.

The final Central Bank report on the tracker mess stated: "The Central Bank is aware there is a possibility that individual, customer-specific issues may emerge which may not have been captured to date."

The regulator says those with unresolved tracker claims can appeal a rejection from their bank.

However, according to the Central Bank, it has worked "to the limit of its mandate" to resolve disputed cases.

But the report added the "Central Bank is not in dispute with any lender in respect of groups of consumers which should be deemed impacted".

Director general of financial conduct at the Central Bank Derville Rowland said: "The scale of lenders' tracker mortgage failings was industry-wide, causing immense distress and damage to affected customers and their families."

And regulators said their enforcement actions "are considering the actions of individuals which may be relevant to establishing how and why customers lost their trackers".

People who lost their homes as a result of the scandal got some of the highest payments to compensate them for the loss of their properties.

Higher property values would have been included in the payments made.

The loss of a residential property meant average redress and compensation of €194,000.

Irish Independent

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