We should have a switcher code for mortgages

Brendan Burgess said:
I have explained the downside a few times, but I will do it again.

It will achieve nothing at all. I don't think it will even achieve "slightly".

Yet, it will allow the CB and the government and the lenders to claim that they are doing something.

I want the government and the CB to do something real. That is to force the lenders to stop fleecing people.

There is also a cost. Banks will have to set up systems. If we adopted GNF's suggestions, we would have to integrate the banks, revenue, his accountants, the credit unions, and everybody else. That would actually take the control out of the hands of the lender. The bank would apply to the credit unions. They wouldn't respond in line with the code. The borrower would end up chasing everyone.

Do you know what? It's easier to print out the stuff and hand it in to the banks.

Brendan
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I am guessing maybe the issue here may be to do with timing and politics rather than anything else. I don't believe for a minute that introducing a switching pack is going to 'solve' the SVR rates issue, and I do see your point that it may be used as a political distraction to show they are addressing it. It is not going to solve the root cause, or anything else.

However, in the event we ended up in a situation whereby SVR rates dropped to ~2.5%, there is still an issue to get people to switch. You cannot make people switch, and as we all probably acknowledge, there are many who could seriously benefit from switching today who have not. Would a switching pack help them? Who knows ! Without knowing and understanding their root cause for not switching its hard to tell.

Maybe some time/investment is needed into understanding why people are not switching today - not from the people on this site who obviously have an interest in their financial situation, but more from the 'status quo' type people who are 'willingly' paying the higher SVR rates currently.

I am guessing anyone who purchased between 2010-2013 would be on a relatively high SVR rate or fixed rate currently, unless they
(a) switched provider
(b) got a deal from the provider
(c) with a provider who has dropped rates for existing customers

I am wondering how we get access to these customers to see what category they fall into and what would make them consider switching mortgages !
 
Sarenco said:
Incidentally, I dug a little more deeply into the switching process in Italy. Apparently it’s effected by a process called loan subrogation, where the new lender steps into the shoes of the old lender without taking new security. The interests of the new lender is then noted in the appropriate land registry by a notary. The whole process takes less than thirty days from the first application by a borrower to the new lender and is cost free to the borrower. Penalty or break fees are now prohibited and the changes have resulted in a refinancing boom in Italy with a sharp reduction in the spreads charged by lenders.
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Great explanation and this is what we should aspire to. So switching is simple in Italy and costs pretty much nothing except time for the borrower. QED.
 
elcato said:
Great explanation and this is what we should aspire to. So switching is simple in Italy and costs pretty much nothing except time for the borrower. QED.
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Yes, but: https://bestitalianmortgage.com/italian-mortgage-products/

Italian Mortgage Products for Residents
Typically these mortgages have the following characteristics:
  • LTV – up to 60%.
  • Maximum term 25 years or until the borrower reaches the age of 80. For joint mortgage the youngest borrower’s age may be used as the basis for calculating the mortgage term.
  • Can be used for Italian property purchase, Italian property purchase including renovation works, construction projects, renovation projects and Italian mortgage refinancing.
  • Cannot be used for Italian equity release.
  • Borrower needs to have a strong and stable financial profile which must be verifiable through proof of tax paid on income, a low debt to income ratio (<35%) and fully documented and transparent finances.
  • There are normally other restrictive conditions but these are not normally difficult to meet.
  • Property taxes on purchase are lower for property brought as a main home.

How many mortgages in Ireland fit those criteria?
How many FTB mortgages in Ireland would fit those criteria?

You can skip a lot of conveyancing and risk assessment if the LTV is < 60%.
No idea how easy repossessions are in Italy but I don't think that you would get away with not paying for months or years on end, or that you'd a have a rent-a-mob turning up when the bank finally tries to take over the property.
 
I'm switching my mortgage. I've just been asked for the following by my solicitor.

1: Certificate of exemption regarding NPRR. I don't know why. I live in the house and it's our only one.
2: Proof that the property tax is paid up to date. I can see why this is important when buying a house. Is it necessary when switching a mortgage.
3: Proof that the Irish Water bill is up to date. Similar to 2.
4: A BER certificate. I don't have one. So I've to pay an engineer a couple of hundred quid to give me a certificate that I don't care about.

Is all of this normal? If it is it might be something for a switching code. I'm switching from one bank to another to save money. Having to get all this stuff sorted out is really annoying and would stop me from bothering to do it again in a few years. Point 4 seems like something that is just a money spinner. If I get a BER certificate that says the house is efficient or inefficient what difference will that make to the new bank. It won't make a difference to me as I live in the house.
 
I switched around 2011 so 2 and 3 were not relevant but I was not asked about either of the other two.
 
I don't think that your solicitor should have asked for any of those 4 items.

Is it possible that the lender asked for them in error?

The buyer of a property would want to know that they were in order, but not the mortgage lender.

Brendan
 
I've rang the solicitor and said the same thing. She said she needs them. I've left a message with the mortgage lender to see what their story is. It's possible the lender asked for them in error. They haven't proved to be anyway efficient or apparently competent so far so it wouldn't surprise me.

Those 4 requirements don't seem to add any value to the mortgage lender. They would be essential if I was buying the property alright. It's just another hiccup on my saga of trying to switch my mortgage.
 
I completed a mortgage switch a few weeks ago (to UB). I didn't have to supply any of those things. I would switch solicitor. confirm with the lender that 1 through 4 are not required and relay that to the solicitor.
 
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qwerty5 said:
I'm switching my mortgage. I've just been asked for the following by my solicitor.

1: Certificate of exemption regarding NPRR. I don't know why. I live in the house and it's our only one.
2: Proof that the property tax is paid up to date. I can see why this is important when buying a house. Is it necessary when switching a mortgage.
3: Proof that the Irish Water bill is up to date. Similar to 2.
4: A BER certificate. I don't have one. So I've to pay an engineer a couple of hundred quid to give me a certificate that I don't care about.

Is all of this normal? If it is it might be something for a switching code. I'm switching from one bank to another to save money. Having to get all this stuff sorted out is really annoying and would stop me from bothering to do it again in a few years. Point 4 seems like something that is just a money spinner. If I get a BER certificate that says the house is efficient or inefficient what difference will that make to the new bank. It won't make a difference to me as I live in the house.
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When I switched last year, I was asked for proof that the property tax was paid up to date. It was something about this being a charge on the property, which would supercede the mortgage. I am not sure if I ever produced it, but it was available.

Point 3 was not relevant at that stage as bills had not been issued by Irish Water yet. But would this be different to ESB, Gas or Waste etc. It is just another utility after all !

Was definitely not asked for 1 or 4 at the time.

The only one I would consider a valid ask is 2.
 
Well the bank (Ulster Bank) say they don't need these items but the solicitor won't budge. They say they need all of this to verify the title to the property.

So the choices open to me now are

1: Switch solicitors. I presume I'd have to pay them something for their time taken and I'd have to ask Ulster Bank to send a new solicitor pack to the new solicitor. It took them over a month to get the first document to the solicitor.

2: Grin and bear it. I can spend the couple of weeks waiting on the NPPR cert and pay the €130 to get a BER cert that nobody cares about.
NPPR is a pain in the hole. I've to show utility bills from 2009 -> 2013. I rang Bord Gais and they said they can only print 2 year old bills. To get older I've to send a letter into their CS and they'll get them done.

Changing solicitor isn't really an option. I'm sure they'll charge me more than the cost of the BER cert and it'll add a month or two to the application.

So yeah, a switcher code would be beneficial to me about now. I have nowhere I can definitively go to to tell the solicitor that they're wrong. I can't really say I read on askaboutmoney.com that the guys there think you're wrong.

If you're in Swords and thinking of switching, PM me and I'll give you a suggestion of which solicitor to avoid.
 
Dear solicitor

Having checked this directly with Ulster Bank and with a number of people who have switched without being asked for these documents, I see no reason why I should have to go to the expense and trouble and delay in getting these documents.

Please let me know in writing why you are asking for these. I will then forward the letter to the Conveyancing Committee of the Incorporated Law Society for their assessment.

YS

qwerty
 
qwerty5 said:
So yeah, a switcher code would be beneficial to me about now.
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I always assumed that people meant a code between old lender and new lender.

I hadn't realised that it was to cover solicitors as well.

Maybe a protocol which would cover all the sources of delay:

New lender
Old lender
Solicitor
Land Registry (not sure that they are involved.)
LPT
NPPR
Irish Water

From reading posts on Askaboutmoney, the main source of delay is the credit checks imposed by the new lender.

The old lender is rarely a source of the delay and this can be avoided if the solicitor requests the title deeds well in advance.

I would imagine that most solicitors are efficient and that you have just been unlucky with this one.

Brendan
 
I've been unlucky with the lender and the solicitor :)
Every single step of my process has been a delay. Generally on the lenders end alright but the solicitor has been slow too. E.g. we signed the documents 3 weeks ago. She told me on Monday of these new requirements.

I'd imagine some code could cover the whole process. I've been googling what is needed legally to switch a mortgage. I can't find it so it seems like it can be random.

I had a look at the Law Societies site. In their FAQ it says.

I am not sure the legal advice my solicitor gave me is correct. Can the Law Society give me a second opinion?
The Law Society cannot advise you in a matter like this as we cannot give legal advice. If you require a second legal opinion you may wish to consult a solicitor. You will find a full list of all solicitors who hold a current practising certificate under Find a Solicitor/Firm.

So I can pay another solicitor to tell me if the first one is correct. I know there's a principle in this but there's also a cost. At the moment the only cost I have is €130 to get the BER + delay of another couple of weeks (which is about an extra €50 interest to KBC).

Involving other solicitors is another cost and more time. I'm not that principled. If KBC weren't gouging me I'd have told the solicitor and the bank to get lost.
 
I really think you should send that letter, because it seems as if your solicitor does not know what he is doing. Mention of the Law Society may well prompt him into action.

If your solicitor is delaying the process through lethargy or incompetence, you should argue about it when paying the bill.

Brendan
 
Sarenco said:
Another issue that a switcher code could very usefully deal with is the whole question of transferring mortgage protection policies.

This thread discusses the practical problems that can arise in this regard:-
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Again, I really don't see it as a problem. S Barrett explained it well
"... it won't be an issue. It's just a matter of coordinating the switch. Bank A has to unassign their interest in the policy and bank B have to assign their interest. Obviously, it can't be done at exactly the same time but once Bank B see their is a policy, they'll be fine."

It's a problem for the new lender accepting that a policy is in place.

Mortgage protection is usually not dear. If there is a problem, the switcher can take out a new policy and then cancel it after sorting out the reassignment.

I just don't think that we can tell a new lender what their lending criteria and procedures should be. If they impose a demand higher than another lender, so be it.

There might be a role for a lender to make it a marketing issue that they will make the switch as easy as possible.
 
Brendan Burgess said:
Maybe a protocol which would cover all the sources of delay:

New lender
Old lender
Solicitor
Land Registry (not sure that they are involved.)
LPT
NPPR
Irish Water
Click to expand...
Yes this is the type of protocol that would both make sense and clarify issues for the borrower on what exactly is required in order to complete a switch. New lender rather than old lender would need to be prioritized in any protocol requirements. I.e. An obligation to inform the borrower upon application of exactly what is required and where that obligation falls. Ie:- Yourself - Your existing lender - Your existing bank (if different) - Your solicitor - Your accountant etc! Once information has been fully provided then there should be a clear timescale of the process up to approval and up to drawdown with the obligation on the bank to contact the borrower in the event of any issue arising that could result in a delay.
Despite Brendan's B's belief that the majority of solicitors have a full understanding of what is required from a bank to complete a title search etc in respect of all mortgages I know from experience over many years that this is not the case. There is a small coterie of solicitors that are fully professional, competent and timely in respect of the process and will keep both the client and bank fully informed of the process and any unanticipated delays. The others tend to put this work on the long finger and are reactive rather than proactive in their timing. This also applies to bank solicitors who tend to ignore letters sent to them from the client solicitors until a mortgage advisor gets on to them re delays.

A protocol (in my opinion) is necessary as it puts the responsibility for getting things done in a timely and professional manner exactly where it should be put and failures would be clearly identified and addressed.
 
44brendan said:
Despite Brendan's B's belief that the majority of solicitors have a full understanding of what is required from a bank to complete a title search etc in respect of all mortgages I know from experience over many years that this is not the case.
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Could someone please tell me where I can get the emoticon for irony?

Brendan
 
44brendan said:
There is a small coterie of solicitors that are fully professional, competent and timely in respect of the process and will keep both the client and bank fully informed of the process and any unanticipated delays. The others tend to put this work on the long finger and are reactive rather than proactive in their timing.
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Is this a case of a minority giving the rest a good name?
 
Brendan Burgess said:
Again, I really don't see it as a problem.
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Hi Brendan

I'm not sure whether you had a chance to read the entire thread but tommyryan explained the problem he was having assigning an interest in a block policy very well and SBarrett also acknowledged the potential problem in a later post on the same thread.

Brendan Burgess said:
If there is a problem, the switcher can take out a new policy and then cancel it after sorting out the reassignment.
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That may not be so straightforward for an older borrower, particularly one that has medical issues, and it certainly won't be cheap. Wouldn't it be better if a borrower didn't have to needlessly go through this cost and hassle simply to change mortgage provider? A lender should be completely neutral as to whether they receive a new policy or an assignment of an existing policy as long as the cover is sufficient.

More generally, a protocol/code would represent an agreed, consistent procedure across the sector rather than something that is imposed unilaterally from "on high".
 
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