# A split mortgage is a renegotiated contract. ptsb has no right to set refund against warehouse



## CKonetheonlyone (16 Aug 2015)

Dear All,

I'm a newly registered for the purposes of this thread.  My specific line of thought is one of confusion.  I have been offered a sum of compensation just over 3k, and a refund of just over 3k.  The sum overpaid by me was 28k and this is going to be set against the warehoused portion of the mortgage.  This is where the confusion sets in.  Posters here seem to be relatively satiated by the proposal that overpayments will be set against the warehoused portion as opposed to being refunded, but I cannot understand why more people do not want this money back. 

I am not a financial expert at all, but it seems to me that this was money which was paid by me to PTSB as a result of PTSB's negligent omission (we'll call it negligence).  They now propose to deny us of the utility of that money, but we did not pay this money with fully informed consent as a result of their omission.  I cannot understand why this seems like an acceptable course of events.  I suppose the necessity for a split mortgage may have to be reassessed by PTSB in the light of repayments were they to be made, but that is another story. 

In short, I have difficulty accepting that PTSB are proscribing where our money is to be applied when it is money which they procured wrongfully (by a negligent omission) in the first place.  Secondly, I don't understand why this doesn't seem to bother more people.

I would be extremely grateful to hear anybodies thoughts or feedback on this.


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## Brendan Burgess (16 Aug 2015)

Hi CK


ptsb will put you back into the position you would have been in had they not applied the wrong rate *and *had you made the full repayments. 

Forget about the warehouse for the moment. If they had applied the correct interest rate and if you had made the full repayments, your balance today would be €100k.  But your balance today is €128k.  You were overcharged by €31k.  

So the first thing which they do  is to reduce the balance of your mortgage to €100k which is where it should be. That uses up €28k of the overcharge. It leaves €3k which they refund to you in cash. 

Brendan


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## voleurs (17 Aug 2015)

Ck I feel exactly the same way as you. As does the solicitor I am using. Will wait and see what reply I receive from the bank.


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## Brendan Burgess (17 Aug 2015)

voleurs said:


> As does the solicitor I am using.



With respect to the legal profession, it is extremely unlikely that they would understand this issue. 

Brendan


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## CKonetheonlyone (17 Aug 2015)

Dear Brendan,

Thanks for the response.  My confusion stems from the fact that I was not under the impression that PTSB have the contractual RIGHT to apply the money as if we had been making full repayments.  We were not; the terms of the contract were renegotiated specifically to enable us NOT to make full payments.  And we satisfied these renegotiated terms.  One of the assumptions of a split mortgage is that financial institution may have to re-assess if it is required in the event that your financial situation improves, fine. But this is a much more draconian step.  As you said, they are treating the situation as if we had been making full payments.  Where is this power given to PTSB?

They have the contractual right to revisit the necessity of a split mortgage, sure. But would it not be tantamount to a unilateral renegotiation of the terms of a contract for PTSB to determine where this money is to be applied?

I have been away from home, but now that I am back I am going to check the small print on my renegotiated document. If this document does not stipulate that overcharged monies would be applied in this way, would it not be outside of PTSB's powers to decide where the money is allocated?

Voleurs - it is certainly a relief to hear that there is at least somebody who shares my acute dissatisfaction on this.

Brendan, thanks again for your input to date, it is much appreciated.


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## CKonetheonlyone (6 Sep 2015)

I am anticipating having to wait some time to see if there are any cases taken in relation to this issue.  The issue being the fact that PTSB have decided themselves where to apply this overcharged money (on the warehoused portion of split mortgages).  I cannot see on the basis of our contract where they derive the authority to take this decision.

I would be interested over the course of the one year period that we have in pooling resources with others on a split mortgage with a view to soliciting excellent representation.


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## Brendan Burgess (7 Sep 2015)

I think you might be missing the point. 

Under the conditions of a split mortgage, you are obliged to notify the lender if your financial circumstances change. So if you get a big lump sum, you should notify them and they have the right to alter the split. 

So even if you won your case, it would be a pyrrhic victory.

Brendan


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## CKonetheonlyone (9 Sep 2015)

Brendan,

I did address this above, and everyone knows that the necessity for a split mortgage might need to be revisited in the event that the mortgagor's financial situation shows improvement.  My point that I am reiterating is that this still does not give PTSB the contractual right to unilaterally decide to apply the money in this way.


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## Bronte (9 Sep 2015)

Any chance CK you could scan up your split mortgage contract - deleting identifying details.


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## thedaddyman (9 Sep 2015)

Karl Dieter did a very good blog post on split mortgages
http://blog.myhome.ie/2012/06/22/split-mortgages-tickety-boo/

The warehouse part still has to be paid off by the OP. By applying the overpayment to this portion, the OP's debt is still being reduced and he is still in a better position. Obviously if the OP had a choice he could have applied it against the interest bearing part of the mortgage to reduce his monthly payments but he would still be left with a larger debt outstanding at the end. I'm not saying that contractually PTSB are correct, that will be decided by the courts

One other thing worth considering, had the correct low interest rate been applied as part of the deal on the split mortgage, the likelihood is the interest bearing part of the loan would have been higher and the warehoused part lower.

Personally, if it were me, I'd be far more concerned about the level of compensation rather then how the overpayment is applied. €3k is dreadful for the way PTSB have acted


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## CKonetheonlyone (9 Sep 2015)

I'd imagine 28k will be worth a lot less in 22 years than it currently is or then it was when I was in the process of overpaying it


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