Bank forced to pay out €120,000 after putting home up for sale without telling owner

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Charlie Weston

A BANK sold a home to a vulture fund even though the mortgage was paid off, and in another case a bank put a house on the on the market without telling the owner.

The two cases highlighted by the Financial Services and Pensions Ombudsman resulted in large pay-outs by the lenders.

In one case highlighted by the Ombudsman Liam Sloyan a homeowner had her home put up for sale without her knowledge by the bank.

She ended up getting €120,000 in compensation from the lender.

Neither the lenders nor the homeowner are not identified.

Given the name Cathy, the woman bought a house in 2010. She moved the following year after the home was badly damaged by flooding.

Cathy later fell into arrears on her loan and decided after some years to put the property on the market to pay her debt.

She moved home but gave the bank her new address.

The Ombudsman was told the bank was slow to respond to her solicitor.

Cathy stated that she regularly attended the house to check it and pick up post.

She discovered that the property had been placed with an estate agent by the bank and was for sale, without her knowledge.

Locks had been changed and she could not gain entry.

With help from her solicitor, she prevented the sale of the house and managed to sell it herself for €80,000 more than the bank was seeking.

The Ombudsman’s report states: “While the bank did not respond to the specific allegations [in a complaint investigated by the Ombudsman], it apologised for the number of years that the matter had been ongoing and acknowledged that mistakes had been made while dealing with Cathy’s mortgage account and property.”

She was offered compensation of €120,000 which she accepted in final settlement of the matter, it said.

In another case, a property was sold by a bank to an investment fund.

It was sold after the owner died and there were delays resolving issues with her estate.

Her estate did not realise that her mortgage payments would not automatically continue to be paid from her bank account which contained more than enough funds to cover all payments.

The mortgage was eventually paid in full from money in her estate.

Before this happened, the original mortgage provider sold the charge over her properties after the mortgages had been fully paid, as it had started the sales process when the loan was still in arrears and later forgot to remove the mortgage from its sales list.

When the woman’s executors went to sell the properties, they could not do so as there was still a charge showing on the mortgages.

They had asked tenants to leave so they were no longer receiving rents and were paying legal fees to try to get the situation sorted.

The original mortgage lender apologised for the delays caused and offered €17,500 to cover lost rent and legal fees in full and final settlement of the complaint, which was accepted by the estate.

Mr Sloyan said his office continues to receive high numbers of complaints, with 4,781 received last year.

This compares with 4,658 complaints the year before.

Bank of Ireland had more complaints against it upheld, substantially upheld or partially upheld by the Ombudsman last year than any other financial services provider.

The bank was at the centre of 10 cases, one more than the institution with the next highest number, Permanent TSB.

Six complaints were upheld, substantially upheld or partially upheld against Ulster Bank, five against KBC Bank Ireland and Irish Life, and four against AIB and Bank of Ireland Mortgages, Munich Re and New Ireland Assurance.