Redress, Compensation, Correction and Rectifying of your Mortgage Account

Donnacha Anhold, Principal, Carter Anhold SolicitorsIf you took out a mortgage with any of the mainstream banks during the years of 2001 to 2008, it is highly likely that your mortgage was a Tracker. It could also be the case your mortgage terms gave you a right to avail of a tracker, but your bank refused or failed to convert your mortgage to a Tracker, once a fixed rate expired. Recent reports suggest, trackers account for 60 per cent of Permanent TSB residential mortgages, and some 62 per cent of Bank of Ireland’s mortgage book are Trackers. Taking all of the main banks into account, Trackers roughly account for 52 per cent of residential mortgages at the four main banks. A higher proportion of buy-to-let mortgages, possibly up to 70 per cent, are on tracker rates.

So what’s the Tracker scandal all about?

It is well known for a long time there have been issues with how Irish banks were treating customers with a Tracker mortgage. In the majority of cases, customers were given a fixed rate option for a period, for example of 2 years, with the terms of lending giving that customer the right when the fixed-rate period was finished, to be moved back on to their original Tracker mortgage rate.

In many cases this never happened

In many instances, banks would not return customers to their original Tracker rates, instead putting them on higher fixed-rate and variable-rate loans.

Secondly, in cases where customers were put back on Trackers by their banks, this was done at a higher rate than the original Tracker mortgage agreement. In simpler terms – overcharging.

So what should happen if you are one of those customers?

The Central Bank has directed banks to offer Redress and Compensation to customers who have been affected.

Redress is described by the Central Bank as – A redress payment is to return the impacted customer to the position that he/she would have been in had the relevant issue not arisen. This involves moving the customer to the correct interest rate and refunding any overpayments made due to the lender’s error. The redress payment should take into account the fact that the customer did not have access to these funds for this period.

Compensation is described as – A compensation payment is to reflect the detriment suffered by impacted customers. Compensation, therefore, is in addition to the redress payment.

In some cases, if your personal, physical or financial life has been damaged or you have suffered specific losses as a result of wrongful or overcharging, you may be able to seek more compensation for damages than being provided through the standard redress scheme. However, this comment must be strongly prefaced with the caveat that you need to seek out professional legal advice before arriving at this conclusion.

How can I find out if my Mortgage is a Tracker?

  • Go to your Solicitor who acted for you in taking out the mortgage. The original terms and conditions of lending should be on your file. Your terms and conditions will tell you if your mortgage was a Tracker mortgage.
  • Make a Data Access Request to your bank. You are entitled to all personal information that your bank holds or retains on you. This information will include your Terms and Conditions of lending. You will need to make this request correctly in order to get the relevant information. You can do a personal request yourself, or (with your authority) your financial advisor or your Solicitor can do this on your behalf.

One further thing of note in relation to Home Repossessions, if you are subject to home repossession proceedings by your lender, the Central Bank has directed that repossessions are not to occur while individual cases are being assessed under Central Bank examination to determine if they are impacted.

For further information on Tracker Mortgages, contact Carter Anhold Solicitors on 071 916 2211.