Key Post Successfully appealed NIB's increase in rate on investment property
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Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
We had a previous ‘’Variable Annuity Residential Investment Property Loan’’ on this property with NIB. A few years ago in order to avail of a discounted rate that was then available from NIB on investment properties, this mortgage was discharged in full. Then a new mortgage with a new account number and a new home loan agreement signed by both parties came into being. This is the ‘’Variable Rate Home Loan’’ with the ‘’Home Loan Interest Rate’’ that is in dispute.
It appears that the main argument NIB put to the Ombudsman in our case was it was simply an internal transfer and this new mortgage was under the same terms and conditions as the previous mortgage and therefore they were entitled to charge their new investment interest rate.
The Ombudsman went into a lot of detail on this point and rejected this for all the obvious reasons, stating that the Complainants are entitled to rely on the later agreement of XXXX, and upheld the complaint.
I can see why the ruling in this case would only apply to us.
It will be interesting to see what NIB’s defence will be in other similar complaints where the internal transfer issue will not be relevant.
Possibly the Ombudsman will be able to give a broader ruling in these cases.
We had a previous ‘’Variable Annuity Residential Investment Property Loan’’ on this property with NIB. A few years ago in order to avail of a discounted rate that was then available from NIB on investment properties, this mortgage was discharged in full. Then a new mortgage with a new account number and a new home loan agreement signed by both parties came into being. This is the ‘’Variable Rate Home Loan’’ with the ‘’Home Loan Interest Rate’’ that is in dispute.
It appears that the main argument NIB put to the Ombudsman in our case was it was simply an internal transfer and this new mortgage was under the same terms and conditions as the previous mortgage and therefore they were entitled to charge their new investment interest rate.
The Ombudsman went into a lot of detail on this point and rejected this for all the obvious reasons, stating that the Complainants are entitled to rely on the later agreement of XXXX, and upheld the complaint.
I can see why the ruling in this case would only apply to us.
It will be interesting to see what NIB’s defence will be in other similar complaints where the internal transfer issue will not be relevant.
Possibly the Ombudsman will be able to give a broader ruling in these cases.
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
It's very bad form that NIB should not have tried to argue that the terms and conditions of your previous mortgage agreement would apply to your new contract. I would not be surprised if NIB and others will create new type of mortgage rates in order to increase mortgage rates for investment mortgages where the current rate is the home loan rate. They could say increase the home loan rate but allow customers who live in their properties (ie their home) to move to a new mortgage called let's say residential mortgage rate. I believe the banks will be seeking new ways to make profits to recoup their losses and touching residential mortgages is politically a no no, but they can go after investors and businesses.
It's very bad form that NIB should not have tried to argue that the terms and conditions of your previous mortgage agreement would apply to your new contract. I would not be surprised if NIB and others will create new type of mortgage rates in order to increase mortgage rates for investment mortgages where the current rate is the home loan rate. They could say increase the home loan rate but allow customers who live in their properties (ie their home) to move to a new mortgage called let's say residential mortgage rate. I believe the banks will be seeking new ways to make profits to recoup their losses and touching residential mortgages is politically a no no, but they can go after investors and businesses.
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
Four weeks after our ruling the 0.75% higher investment rate was still being applied to our mortgage. The Ombudsman was notified and he wrote to NIB stating he was disappointed to be advised that his finding has not yet been implemented and he would be grateful to hear from NIB by return with an explanation for the delay and confirmation the interest rate being applied has been amended.
I can now see on line the additional interest charged to our mortgage since February has been credited to our account and the interest now being applied is the lower ‘’Home Loan’’ rate.
We should not have had to take this complaint in the first place, it’s very bad form on NIB’s part that we again had to involve the Ombudsman to have his finding implemented.
Four weeks after our ruling the 0.75% higher investment rate was still being applied to our mortgage. The Ombudsman was notified and he wrote to NIB stating he was disappointed to be advised that his finding has not yet been implemented and he would be grateful to hear from NIB by return with an explanation for the delay and confirmation the interest rate being applied has been amended.
I can now see on line the additional interest charged to our mortgage since February has been credited to our account and the interest now being applied is the lower ‘’Home Loan’’ rate.
We should not have had to take this complaint in the first place, it’s very bad form on NIB’s part that we again had to involve the Ombudsman to have his finding implemented.
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
Hi all
I received a call from the financial ombudsman this afternoon.
They have said that NIB have agreed to mediation in my case.
They wanted to know what if I wanted to agree to mediation.
They have given me a couple of days to have a think and I am wondering what I should do?
They stressed that mediation involves a compromise and the man was surprised that they have agreed to mediation as according to him 'this seems a black and white case'.
Does anybody have any thoughts?
Hi all
I received a call from the financial ombudsman this afternoon.
They have said that NIB have agreed to mediation in my case.
They wanted to know what if I wanted to agree to mediation.
They have given me a couple of days to have a think and I am wondering what I should do?
They stressed that mediation involves a compromise and the man was surprised that they have agreed to mediation as according to him 'this seems a black and white case'.
Does anybody have any thoughts?
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
Perhaps the bank are worried seeing as a previous postr won.
I think the key thing is to see if your mortgage rate had something like standard variable rate, or if it used the words home loan rate.
I think some of the mortgages had home loan rate on them and this was the one that won.
In my case as well as a previous poster the bank declined mediation immediatly. The fact that they are offering to mediate means that they don't think they can win.
Perhaps the bank are worried seeing as a previous postr won.
I think the key thing is to see if your mortgage rate had something like standard variable rate, or if it used the words home loan rate.
I think some of the mortgages had home loan rate on them and this was the one that won.
In my case as well as a previous poster the bank declined mediation immediatly. The fact that they are offering to mediate means that they don't think they can win.
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
Tomorrow - is it a black and white case in your favour. I assume it is so surely the ombudsman should tell you to refuse mediation and go to decision. Maybe according to his procedures he has to offer you the option as NIB has requested it. Probably he cannot tell you what to do as he has to be independent even if he thinks you should not choose mediation he still has to offer it.
I think all of this is a clear breach of procedure/rules terms and conditions and is in fact another (!) underhand way of overcharging. And it's done deliberately, this is not accidental, banks don't charge more accidentaly.
Why is the ombudsman not asking all banks not just NIB to confirm that they have not changed the name (title of mortgage product) and hence the type of rate applied to investment mortgages. Furthermore NIB should be directed to forthwith fix all customers to whom this has been done, refunding the overcharging immediately and I think the bank should have to pay a fine or compensation to everybody for the inconvenience. It would be interesting also to know what percentage of investment mortgages this had been done to. Shoddy banking practise as usual.
Tomorrow - is it a black and white case in your favour. I assume it is so surely the ombudsman should tell you to refuse mediation and go to decision. Maybe according to his procedures he has to offer you the option as NIB has requested it. Probably he cannot tell you what to do as he has to be independent even if he thinks you should not choose mediation he still has to offer it.
I think all of this is a clear breach of procedure/rules terms and conditions and is in fact another (!) underhand way of overcharging. And it's done deliberately, this is not accidental, banks don't charge more accidentaly.
Why is the ombudsman not asking all banks not just NIB to confirm that they have not changed the name (title of mortgage product) and hence the type of rate applied to investment mortgages. Furthermore NIB should be directed to forthwith fix all customers to whom this has been done, refunding the overcharging immediately and I think the bank should have to pay a fine or compensation to everybody for the inconvenience. It would be interesting also to know what percentage of investment mortgages this had been done to. Shoddy banking practise as usual.
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
Thanks for your replies.
DingDing - my mortgage was a 'variable rate home loan' - I am thinking the same as you, that they would not have agreed to mediation unless they are sure they cant win.
Bronte - I am not sure that it is in my favour but I persume it is, I thought the Financial Ombudsman would instruct NIB to reverse the change of interest rate and mortgage title, after the result of the previous poster, but perhaps thats not the way things work
The man from the ombudsmans office said that to agree to mediation would mean I would have to compromise in some way - however I cant think how I can. There is also the point that any costs I incur involved in the mediation process, I have to pay for.
I think I will tell them that I am refusing mediation.
Thanks for your replies.
DingDing - my mortgage was a 'variable rate home loan' - I am thinking the same as you, that they would not have agreed to mediation unless they are sure they cant win.
Bronte - I am not sure that it is in my favour but I persume it is, I thought the Financial Ombudsman would instruct NIB to reverse the change of interest rate and mortgage title, after the result of the previous poster, but perhaps thats not the way things work
The man from the ombudsmans office said that to agree to mediation would mean I would have to compromise in some way - however I cant think how I can. There is also the point that any costs I incur involved in the mediation process, I have to pay for.
I think I will tell them that I am refusing mediation.
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
I think you will win this case going on what a previous poster has said of his decision. If you look back a few posts you will find it.
Might be worth contacting that poster by PM to see what argument the used with the ombudsmans office when the bank submit their case.
Good luck with it and I ahve not heard anything yet on my case.
I think you will win this case going on what a previous poster has said of his decision. If you look back a few posts you will find it.
Might be worth contacting that poster by PM to see what argument the used with the ombudsmans office when the bank submit their case.
Good luck with it and I ahve not heard anything yet on my case.
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
Just got the result of the investigation.
the Financial Services Ombudsman has upheld my complaint and Directs "the complainants' investment mortgage interest is to be calculated in accordance with the banks home loan rate, and the bank is to back-date this change to Februart 2009. this is to correct the consequences of the conduct complained of."
waiting for my refund and the new rate to be applied
A quick calculation means that my mortgage will reduce by 100 per month and I should get 800 back.
Just got the result of the investigation.
the Financial Services Ombudsman has upheld my complaint and Directs "the complainants' investment mortgage interest is to be calculated in accordance with the banks home loan rate, and the bank is to back-date this change to Februart 2009. this is to correct the consequences of the conduct complained of."
waiting for my refund and the new rate to be applied
A quick calculation means that my mortgage will reduce by 100 per month and I should get 800 back.
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
Hi Marg,
Just to confirm I appear to be in the same boat as you. Our rate of interest was
A Variable rate which is .24% below National Iriah Bank's Cariable Annuity Mortgage Rate currenty Y% to give a current rate of Z% This discount applicable to the full term of the loan.
In the response to the obmudsman we made the case that we made the decision to go with NIB based on the fact they had only one rate and we were getting the home rate on a investment mortgage, and that no other bank could compete on that basis.
Also the fact that NIB's attempt to make it more transparent for the customer was actually less transparent.
Not sure how much our arguments swayed the decision.
Best of luck, and please keep us posted.
Also in this era of public sector bashing, I can only admire the professionalism of the ombudsmans office and how easy it was for us to get a resolution. And how without incurring any legal costs ourselves we were able to get a successful conclusion.
Hope I am near a phone next time the ombudsman is on the last word to text in support of his office, and how he is assisting the customer in policing the banking sector.
Also we are to maintain the discount (.24) of the home loan rate for the duration of the mortgage.
Again I was verry p155ed off because the bank were not transparent, and many customers might have just thought it was a normal administrative change within the bank, and did not grasp the full consequences of what they were doing.
I also estimate the cost of this for the remainder of the mortgage is implemented would be about 20K
Hi Marg,
Just to confirm I appear to be in the same boat as you. Our rate of interest was
A Variable rate which is .24% below National Iriah Bank's Cariable Annuity Mortgage Rate currenty Y% to give a current rate of Z% This discount applicable to the full term of the loan.
In the response to the obmudsman we made the case that we made the decision to go with NIB based on the fact they had only one rate and we were getting the home rate on a investment mortgage, and that no other bank could compete on that basis.
Also the fact that NIB's attempt to make it more transparent for the customer was actually less transparent.
Not sure how much our arguments swayed the decision.
Best of luck, and please keep us posted.
Also in this era of public sector bashing, I can only admire the professionalism of the ombudsmans office and how easy it was for us to get a resolution. And how without incurring any legal costs ourselves we were able to get a successful conclusion.
Hope I am near a phone next time the ombudsman is on the last word to text in support of his office, and how he is assisting the customer in policing the banking sector.
Also we are to maintain the discount (.24) of the home loan rate for the duration of the mortgage.
Again I was verry p155ed off because the bank were not transparent, and many customers might have just thought it was a normal administrative change within the bank, and did not grasp the full consequences of what they were doing.
I also estimate the cost of this for the remainder of the mortgage is implemented would be about 20K
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
"It is in my opinion reasonable for the complainants to expect their investment account , to be treated in an identical manner to home-loan / residential mortgages which were subject to the same underlying Standard Variance (Annuity) Rate."
Above an extract from the findings.
"It is in my opinion reasonable for the complainants to expect their investment account , to be treated in an identical manner to home-loan / residential mortgages which were subject to the same underlying Standard Variance (Annuity) Rate."
Above an extract from the findings.
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
In my case the refunds appeared as seven debit interest credits (Feb – Aug) to my mortgage account. I would have thought that these refunds should have been credited to my current account, where I could decide how to spend it.
I considered arguing this point with them but decided to let it go, it meant instead of getting a lump sum my repayments are further reduced.
Possibly though you might wish to get your €800.00 and put it to another use. Just something you might want to think about.
In my case the refunds appeared as seven debit interest credits (Feb – Aug) to my mortgage account. I would have thought that these refunds should have been credited to my current account, where I could decide how to spend it.
I considered arguing this point with them but decided to let it go, it meant instead of getting a lump sum my repayments are further reduced.
Possibly though you might wish to get your €800.00 and put it to another use. Just something you might want to think about.
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
This gets a mention on page 12 of the Financial Ombudsman’s Case studies and Trends December 2009.
http://www.financialombudsman.ie/case-studies/default.asp
There must be at least hundreds of NIB mortgages that have been changed in this manner, yet it would appear to date anyway that only three complaints have been made and adjudicated on.
The three of us have won our cases, but the big winner here is the bank.
As others have pointed out previously, I wonder why the Ombudsman did not direct NIB to apply his ruling to all similar cases, not just the minority who complained, he did so in the case on page 9, where a mortgage rate was to return to its original tracker rate at the end of a fixed period. This complaint was upheld but the Ombudsman went on to say the Society should review if cases similar to this one had arisen or may arise in future and if so, he considered that the same approach be applied.
This gets a mention on page 12 of the Financial Ombudsman’s Case studies and Trends December 2009.
http://www.financialombudsman.ie/case-studies/default.asp
There must be at least hundreds of NIB mortgages that have been changed in this manner, yet it would appear to date anyway that only three complaints have been made and adjudicated on.
The three of us have won our cases, but the big winner here is the bank.
As others have pointed out previously, I wonder why the Ombudsman did not direct NIB to apply his ruling to all similar cases, not just the minority who complained, he did so in the case on page 9, where a mortgage rate was to return to its original tracker rate at the end of a fixed period. This complaint was upheld but the Ombudsman went on to say the Society should review if cases similar to this one had arisen or may arise in future and if so, he considered that the same approach be applied.
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
And hopefully the Ombudsman will go back in due course to ask have they reviewed similar cases.
I wonder what percentage of cases it applies to?
I've just read page 12, so the 3 cases are the 3 posters on here. Well done you guys. I really wonder how many other people are involved and what other banks.
Did you 3 get a letter of apology and some compensation for the inconvenience and hassle and stress?
And hopefully the Ombudsman will go back in due course to ask have they reviewed similar cases.
I wonder what percentage of cases it applies to?
I've just read page 12, so the 3 cases are the 3 posters on here. Well done you guys. I really wonder how many other people are involved and what other banks.
Did you 3 get a letter of apology and some compensation for the inconvenience and hassle and stress?
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
I got no letter of apology or no compensation.
I got no letter of apology or no compensation.
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
I was much later than I intended to be in lodging my complaint and so am still in the early stages of the process.
As Mr Meade has ruled on this three times in favour of the complainants and that has now been published (thanks for the link twofor1) I would hope that it would strengthen the case for others in the system.
But...I think the bank is operating on a case-by-case basis as it will only have to revert to the original mortgage conditions in the (probably) small numbers of complaints.
I will keep you up to date with what happens next in my case - I think I will be quoting directly from Mr Meade's report in my next communication with NIB!
I was much later than I intended to be in lodging my complaint and so am still in the early stages of the process.
As Mr Meade has ruled on this three times in favour of the complainants and that has now been published (thanks for the link twofor1) I would hope that it would strengthen the case for others in the system.
But...I think the bank is operating on a case-by-case basis as it will only have to revert to the original mortgage conditions in the (probably) small numbers of complaints.
I will keep you up to date with what happens next in my case - I think I will be quoting directly from Mr Meade's report in my next communication with NIB!
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
I printed out the December document and it makes fascinating reading. It will give me great pointers on answering financial issues on AAM, but I'll have to read it further. In fact one of the cases is very similar to something I'm complaining about at present so thanks for those links.
If you had underpaid your mortgage you would have received demand letters followed by threatening letters combined with interest penalties. This was a clear case of the bank trying to break your contract which is a very sharp practice. If you and others had not been financially savvy you could easily have overlooked it. This could have been very serious had interest rates gone back to dizzy heights and may have resulted in you losing the property by not being able to make the repayments.
This all leads to another question, (maybe this should be another thread)
Where the Ombudsman has directed the Financial regulator to look into certain 'sharp' practices or procedures, where is the follow up on this? Is the Financial regulator obliged to do what the ombudsman suggest or is it merely that, a suggestion or recommendation?
I printed out the December document and it makes fascinating reading. It will give me great pointers on answering financial issues on AAM, but I'll have to read it further. In fact one of the cases is very similar to something I'm complaining about at present so thanks for those links.
If you had underpaid your mortgage you would have received demand letters followed by threatening letters combined with interest penalties. This was a clear case of the bank trying to break your contract which is a very sharp practice. If you and others had not been financially savvy you could easily have overlooked it. This could have been very serious had interest rates gone back to dizzy heights and may have resulted in you losing the property by not being able to make the repayments.
This all leads to another question, (maybe this should be another thread)
Where the Ombudsman has directed the Financial regulator to look into certain 'sharp' practices or procedures, where is the follow up on this? Is the Financial regulator obliged to do what the ombudsman suggest or is it merely that, a suggestion or recommendation?
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
I only noticed this post now. Marg if you have the same contract as the others on here then it is absolutely dreadful that the NIB has not implemented the decisions of the Ombudsman to all it's investment mortgage where it applied.
Surely if they've been rapped on the knuckles 3 times they should be sitting up and taking notice and not forcing customers to make complaints. This goes beyond sharp practice and to systematic failure and contempt for the Ombudsman's office.
Marg, could you give an outline of when you got your investment mortgage and what it's title is and what the bank changed it to? Just to see if it's the same as the other's.
I only noticed this post now. Marg if you have the same contract as the others on here then it is absolutely dreadful that the NIB has not implemented the decisions of the Ombudsman to all it's investment mortgage where it applied.
Surely if they've been rapped on the knuckles 3 times they should be sitting up and taking notice and not forcing customers to make complaints. This goes beyond sharp practice and to systematic failure and contempt for the Ombudsman's office.
Marg, could you give an outline of when you got your investment mortgage and what it's title is and what the bank changed it to? Just to see if it's the same as the other's.
Re: NIB changed mortgage name “Variable Rate Home Loan” to “Variable Investment Mortg
Hi Bronte,
I took the mortgage out in December 2005. It was titled "Variable Rate Home Loan" which as in the other cases outlined in this thread was renamed "Variable Rate Investment Mortgage" in February 2009.
The letter from NIB stated that the interest rate applicable to the account would change from Variable Annuity and Endowment Rate to Investment Mortgage Rate.
The letter then stated that there “are no other changes to your account” and that the change was occurring to make interest rates more understandable and transparent for customers.
Obviously that was not the intention as subsequent interest rate cuts were not then passed on to investment mortgages but were to residential mortgages.
In fact from DingDing's posts and information I believe I have exactly the same mortgage as he/she has.
I am only in the early stage of my complaint as I was (too!) slow in sending my letter in to NIB. Although aware of the information in this thread I did not mention anything in the letter about being aware of the fact that several complaints of a similiar (same) nature had already been before the ombudsman.
I really do believe that NIB are dealing with this on a case by case basis in order not to have to row back on their decision to keep rates higher on investment mortgages in what must be thousands of cases. I reckon that they hope only small numbers of people will complain and keep complaining until the case reaches the ombudsman.
Surely after the ombudsman ruling aginst them in 3 cases they should do the decent thing and revert all those affected mortgages to their original terms and conditions? Does the ombudsman need to actually direct them to do so in everyone's case?
Hi Bronte,
I took the mortgage out in December 2005. It was titled "Variable Rate Home Loan" which as in the other cases outlined in this thread was renamed "Variable Rate Investment Mortgage" in February 2009.
The letter from NIB stated that the interest rate applicable to the account would change from Variable Annuity and Endowment Rate to Investment Mortgage Rate.
The letter then stated that there “are no other changes to your account” and that the change was occurring to make interest rates more understandable and transparent for customers.
Obviously that was not the intention as subsequent interest rate cuts were not then passed on to investment mortgages but were to residential mortgages.
In fact from DingDing's posts and information I believe I have exactly the same mortgage as he/she has.
I am only in the early stage of my complaint as I was (too!) slow in sending my letter in to NIB. Although aware of the information in this thread I did not mention anything in the letter about being aware of the fact that several complaints of a similiar (same) nature had already been before the ombudsman.
I really do believe that NIB are dealing with this on a case by case basis in order not to have to row back on their decision to keep rates higher on investment mortgages in what must be thousands of cases. I reckon that they hope only small numbers of people will complain and keep complaining until the case reaches the ombudsman.
Surely after the ombudsman ruling aginst them in 3 cases they should do the decent thing and revert all those affected mortgages to their original terms and conditions? Does the ombudsman need to actually direct them to do so in everyone's case?