Some borrowers have only themselves to blame for losing their trackers

[cremeegg]

Trigger warning. People of a nervous disposition who lost tracker mortgages please read no further.

In the 2000s the banks offered tracker mortgages, which with the benefit of hindsight were excellent products for the customer, indeed I would suggest they were guaranteed to be good for the customer.

Some people took these mortgages, often remortgaging to avail of the opportunity to get a tracker, because they understood that they offered a guarantee against rate hikes at the lender's discretion. Some people took these mortgages because that is what a broker or bank offered, without really understanding the nature of the tracker.

Roll on a few years and the banks began to realise what a good deal the customer had got at their expense. The banks tried by different means to get the customers off those trackers. Any one who understood what they had got ignored these offers and kept their tracker. Only people who thought they could do even better by fixing or whatever came off their tracker.

Many people fixed for a set period. The banks then refused to put them back on the trackers, some by getting them to sign away their rights to a tracker, some by not offering a tracker again when the fix period expired.

Where people gave up their tracker because they accepted what they thought was a better offer, I don't see why they are automatically entitled to get the tracker back.

If they had kept the tracker in the first place this situation would not have arisen. Now they expect the taxpayer supported banks to compensate them for their poor judgement.

 

[Tedtalk]

I disagree with your comments cremeegg.

In our case we fixed when we had an option to tracker. We fixed because if the rate increased any further in '06 we would lose our home. We have subsequently been crucified as a young family by the SVR since our fixed rate ended in '09. There was no shrewdness on our part, the decision was driven by the significant mortgage repayments. I hope this gives you a better perspective for future posts!!

 

[Tedtalk]

Ignoring my case cremeegg-so your saying the 20,000 potential re-instatements equals poor judgement? Your about 5 years too late for comments like that!!!

 

[Gen360]

When I fixed through my branch in 2007 I was advised that it was the right thing to do as the only way the ecb was going was up. Of course the banks don't do advise and it was up to me to distinguish between advise and friendly words. People were really up against it before the rates increased and really had no choice but to fix. If the rates had kept increasing the banks interpretation of contracts would be very different.

 

[jpbyrne]

Re cremegg's question: why they are automatically entitled to get the tracker back

There is a very simple answer: because the contract between the customer and the Bank (that the Bank's lawyers drafted) says they can.

 

[notabene]

@SaySomething agree with all of the above - will email now

 

[Freshstart]

Can't help but feel offended by your comments Creme egg. Your first comment suggests this debacle is all of people's own doing. However it's just not the case the everyone "gave their tracker up". The finger of blame can be pointed no where but at the banks who defrauded customers and broke contracts.

 

[cremeegg]

However it's just not the case the everyone "gave their tracker up".

Fair enough. Obviously most people who had a tracker mortgage still have it. Can you explain how some people who had tracker mortgages no longer have them.

 

[Freshstart]

Yes. In my own case we began our mortgage on a fixed rate but were contractually entitled to tracker on expiry. I never willingly signed any rite away I was denied it.

 

[SaySomething]

To put it as simply as possible @cremeegg the tracker mortgage 'debacle' is mainly due to the following:

1. Customers took out a tracker mortgage where the tracker rate was included in the contract. It included terms such as 'for the life of the loan" or "for the full term of the mortgage".
2. Customers signed a temporary fixed rate arrangement with the understanding that the loan would revert to the contractual tracker rate once the fixed rate term expired.
3. Those who did sign a temporary fixed rate arrangement were not informed at the time of signing that this would prevent them from returning to their contractual tracker rate.
4. When the fixed rate term expired the bank failed to return them to their contractual rate.

 

[cremeegg]

To put it as simply as possible @cremeegg the tracker mortgage 'debacle' is mainly due to the following:

1. Customers took out a tracker mortgage where the tracker rate was included in the contract. It included terms such as 'for the life of the loan" or "for the full term of the mortgage".

What a pity the borrowers didn't stop there

 

[emeralds]

We have a tracker with bank of Ireland (was ICS) which we took out in 2005. We never once switched to anything else. Wonder are there many like us? Mind you we were never induced to switch or contacted to say that fixed was a better option...

 

[Sophrosyne]

Where people gave up their tracker because they accepted what they thought was a better offer, I don't see why they are automatically entitled to get the tracker back.

Are people who legitimately lost their trackers automatically entitled to get their tracker back?

 

[Andy836]

To put it as simply as possible @cremeegg the tracker mortgage 'debacle' is mainly due to the following:

1. Customers took out a tracker mortgage where the tracker rate was included in the contract. It included terms such as 'for the life of the loan" or "for the full term of the mortgage".
2. Customers signed a temporary fixed rate arrangement with the understanding that the loan would revert to the contractual tracker rate once the fixed rate term expired.
3. Those who did sign a temporary fixed rate arrangement were not informed at the time of signing that this would prevent them from returning to their contractual tracker rate.
4. When the fixed rate term expired the bank failed to return them to their contractual rate.

Your comment #3 makes no sense.

Either the amendment removed the contractual right to revert to a tracker on fixed expiry or it didn't.

 

[Sophrosyne]

Either the amendment removed the contractual right to revert to a tracker on fixed expiry or it didn't.

Correct.
Therefore, it should be simple enough to identify those where it did and those where it did not.

 

[Gerard123]

Your comment #3 makes no sense.

Either the amendment removed the contractual right to revert to a tracker on fixed expiry or it didn't.

Not black and white. No 3 makes perfect sense and is one of the main issues underlying the tracker issue. If it was a simple issue it would have been solved long ago.

As a FA customer the fixed rate agreement provided that I had option to return to prevailing tracker. Nothing else in what I signed indicating otherwise. Nothing about signing away tracker rights. The latter would have been inconsistent with providing a return to prevailing tracker. When I went looking for it I was denied the tracker.

 

[mister32]

Not every contract is black and white.

But when there is ambiguity, the advantage should lie with the customer because they are the lesser party.

Be realistic. The banks are taking advantage of the customer.
How are they getting away with it?

 

[odyssey06]

Borrowers have only themselves to blame. They should have anticipated that their bank was being run by unprincipled lying weasels who would not stop at any opportunity to cheat and swindle them, and should have ignored the temptation of short term cheaper rates as it left them highly vulnerable to the full scale of tactics which the weasels were willing to deploy, including breach of contract, "losing documents", lawyering up, ... to reference some of the comments from AAM posters on their dealings with banks on this matter.
They thought they were dealing with people who just happened to work in a bank... not weasels who would strategically set out to nudge people away, by fair means and foul, from trackers.
Also, they thought that if the banks did try to swindle them, that they could initially rely on the government regulatory bodies fighting their corner...

 

[Lightening]

@cremegg! Many people fixed for a set period. The banks then refused to put them back on the trackers! - correct!!

Many people fixed their Variable (tracker) for a set period! The banks then refused to put them back on trackers!

 

[Sarenco]

I spent some time this evening scrolling through mortgage threads from 2006/07 to see if there was much discussion at the time on the applicable roll-off rates under fixed term contracts. I was trying to see if I could get any sense of borrower expectations or understandings at the time in this regard.

Out of hundreds of threads, I only came across a single thread where there was any discussion at all on roll-off rates -
http://www.askaboutmoney.com/threads/tracker-or-2-year-fixed.20114/

This strikes me as odd as it was absolutely obvious to me from reading other threads at that time that there was a clear understanding of the differences between trackers and other variable rate mortgages. The famous Central Bank ad seems to have worked!

As an aside, I also found it sobering to read so many threads at the time asking what lenders were offering 100% mortgages.