# AIB putting pressure on me.



## focus (13 Mar 2011)

I borrowed 100K in 06 to buy 2 properties abroad. I gave a 1 acre site as security. 

I sold one property for 30k last year, the bank phoned saying they needed the money from the sale. They advised me to put the 30k into a deposit account which I am getting 2% interest on and I cannot withdraw this money.

Things started to go wrong and I could not afford the full payments and missed 3 have it paid up to date now though. I went back to the bank and asked them to put the 30K against the 100k loan. 

They said the only way they would do this is if they got title deeds from land that my mother has. I told them forget it, eventually they said they will put the 30k in against the 100k but said the monthly payments won't change. 

I am on a variable rate and 15 years left on the loan.

 How can they do this?


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## rochs (13 Mar 2011)

Make an appointment to see someone at MABS. they will give you some guidelines.
rochs


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## Bronte (14 Mar 2011)

So you will owe 70K?  Why don't you sell the site to pay back the 70K?  Or sell the second property you purchased abroad.


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## Brendan Burgess (14 Mar 2011)

Under the Consumer Protection Code, the bank is obliged to act in your best interests. Assuming that the rate on the loan is higher than the rate on the deposit, they should have advised you to use the deposit to pay off the loan from the start. 

So, first, you should insist that they refund you any excess interest. For example, if money was on deposit at 2% for 10 months but they were charging you 3% on the loan, then they should refund you €30,000 @1% = €300 per year = €250 for 10 months. 

Have they set the €30,000 off agains the loan yet?  If not, then don't agree to it for the moment. 

Is there any formal legal connection between the loan and the property you sold? It seems to me that you secured the loan on the 1 acre site. If so, the bank has no right to the €30,000 and they should not have pressurised you into giving them a lien over it. I would insist on withdrawing the €30,000 cash and putting it in an account at a separate bank. You can use the cash to keep up the repayments on the loan. 

When your financial position is more secure, you can decide whether the best thing to do is to use what is left of the capital to repay the loan.

Write to the bank and tell them that they have no right to the deposit. Under the Consumer Protection Code they should have advised you what was in your best intersts. They did not do so.  Tell them that you want to withdraw the money immediately. Tell them that if they do not comply, you will make a formal complaint to the Financial Services Ombudsman

It's very important that you check your credit record with the ICB. If they have put up the missed payments, then tell them to correct this.


Brendan


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## focus (14 Mar 2011)

The second property I have is only valued at 40k, and impossible to sell at the moment. The site has no planning and is only valued between 10 to 20K. I keep making the argument that they gave me the money first day and I am making every effort to pay it back. THe 30k is not gone against the loan yet should be done this week. I am getting 2% interest on this and paying 4.85% on the loan. The story will probally change agian this week. I have contacted a solicitor to find out why the monthly payments will not change when the 30k is put in. Why the 30k was not put against the 100k first day I presume it looked better on their books to have a site and 30k as security for the loan, and they would still be making money from me on charging 4.85 % for the 30k. I have been banking with Aib for 20 years and this is what I get in return. 

Oh and I forgot to mention 2 months ago they said they would put the 30k in against the 100k on a new contract capital and interset for the first 5 years and the loan would be revise after this. In other wourd they want all the capital to be paid back after the 60  months. I got this checked out with a friend of mine who said don't even dream of signing it.


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## focus (14 Mar 2011)

Hi Brendan                                                                                





Brendan Burgess said:


> Under the Consumer Prothection Code, the bank is obliged to act in your best interests. Assuming that the rate on the loan is higher than the rate on the deposit, they should have advised you to use the deposit to pay off the loan from the start.
> 
> So, first, you should insist that they refund you any excess interest. For example, if money was on deposit at 2% for 10 months but they were charging you 3% on the loan, then they should refund you €30,000 @1% = €300 per year = €250 for 10 months.
> 
> ...


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## Brendan Burgess (14 Mar 2011)

Write to them immediately and hand deliver the letter.

Tell them not to set the €30k against the loan as they have no right to do so.

Tell them to give you a  bank draft for the €30k + interest immediately. 

If they refuse, they will have to give you a letter in writing. Then go to the Ombudsman.

You do not need to go to a solicitor. The Ombudsman will sort it out for you.

Brendan


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## Sunny (14 Mar 2011)

Hang on, the bank must have a lien on the two foreign properties (including the one you sold) or did they give you a 100k mortgage on a security worth €10-20k? Suppose in 2006, anything was possible!


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## wbbs (14 Mar 2011)

I presume the site was worth way more in 2006 and loan was secured on that, planning may have lapsed by now 5 yrs later so is now just a field and not a site.


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## focus (14 Mar 2011)

The bank gave gave me the 100k never asked for proof of income just the site as security and there was never any planning got on this site.


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## Sunny (14 Mar 2011)

lee75 said:


> The bank gave gave me the 100k never asked for proof of income just the site as security and there was never any planning got on this site.


 
Mad. Well then, Brendan is right. Don't even waste your money on a solictor. The bank have no right to tell you what to do with the 30k from the proceeds of the sale and should never have made you put it in a deposit account and put a lien on it. Get the banks position in writing and contact the Ombudsman.


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## Bronte (14 Mar 2011)

I think the OP would be very unwise to upset the bank.  Yes the bank has no right to tell him what to do with the 30K but OP owes the money, it's secured on basically a worthless site, OP has defaulted or not complied with the terms of his loan (he mentioned arrears).  Now most loans have in the small print some clause about calling in loans in arrears or whenever they, the bank,  decide to do so.  If he messes them around and gets his 30K he'll have a much bigger headache when they come looking for the 100K forthwith.  

Lee what do you mean the 2nd property is worth 40K and is unsaleable.  It's worth what you can sell it for?  Is this a property in somewhere like Bulgaria, what is your long term plan for it?  As in what did you buy it for?

I presume they originally loaned you 100K without 'real' security as your mother has assets/land?


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## Brendan Burgess (14 Mar 2011)

Hi Bronte

An interesting approach. 

He seems to have 15 years left on the loan. It's unlikely that it could be recalled, although there _might _be such a term in the loan agreement.

I think he should stick up for his rights here. Part of the reason he fell behind was because he didn't have access to the 30k. 

Obviously we haven't heard AIB's side of the story here, but taking the OP's story at face value, AIB have a lot of questions to answer here.

brendan


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## Greta (14 Mar 2011)

The story seems a little bit strange. On the face of it it appears that AIB gave the loan secured only on a site, then how did they even find out about the sale of one of the two foreign properties? Did OP tell them, and if so, why, if the sold property legally had nothing to do with AIB?

There is the loan, with a site as security, 15 year term and certain monthly repayments. So long as OP didn't try to sell the site and kept up his monthly repayments, how did the sale of a foreign property ever come to the bank's attention and what has it got to do with the bank? I honestly don't understand it.


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## focus (14 Mar 2011)

The bank called  me in and said the borrowing was very high against the site and asked me for more security, at that point I told them that I was in the process of selling an apartment in Budapest but wanted to leave the money in high interest account in Budapest @ 8%. They said that they needed the money in for more secuirty. I was slow in sending in the money as I was watching the exchange rate I got several calls and text as the fellow in the bank said he was under serious pressure to get the money in. I should have got advice first but I thought I was doing the right thing,


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## losttheplot (14 Mar 2011)

In your original post;
"They said the only way they would do this is if they got title deeds from land that my mother has,"... was the loan secured on land that belonged to your mother, or is this a different site?


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## Greta (14 Mar 2011)

lee75 said:


> The bank called  me in and said the borrowing was very high against the site and asked me for more security



Is there anything in your contract that allows AIB to demand more security? The value of the site *is* very low compared to your debt secured on it, but that's the bank's problem, they shouldn't have lent your the money without adequate security in the first place!

I am not sure how widespread such practice by banks is, but it's really appalling. 

I think Brendan is right, you should stand up to the bank and fight to get the 30,000 back, you wouldn't have had any immediate financial problems if you hadn't given this money to the bank, as you could have used it to subsidise loan payments for a very long time or paid some off the loan and retained the remainder. It's not up to the bank to decide what you should do with *your* money, just because they were stupid to lend without sufficient security.


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## focus (14 Mar 2011)

losttheplot said:


> In your original post;
> "They said the only way they would do this is if they got title deeds from land that my mother has,"... was the loan secured on land that belonged to your mother, or is this a different site?


 
The site belongs to myself, notting to do with my mother. They just tought they would get this security as well.


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## losttheplot (14 Mar 2011)

Didn't think they could do that, it has nothing to do with your mother. It sounds very unprofessional. Sounds like someone screwed up by giving you the initial loan and is panicking and maybe trying to hide it from their boss. I wonder was their a "rogue" loan approver firing out loans to blow up their commision. Now it's all gone wrong and they're desparetely trying to clear it up. I also find it strange that you received text messages from them. All my contacts with banks has always been mail, voice calls or voice messages - never a text. Is it always the same people in the bank you're dealing with?


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## focus (14 Mar 2011)

There was nothing in the contract about extra security. I have told the bank several times that they made the mistake and they accept it every time I say it.                                                                               [

Sorry if i did not explain myself properely on the 30K. I now want to pay this off the 100k as I am getting 2% interest on the 30K and paying 4.85 % to borrow it. This is the big problem in trying to get them to pay this off the 100k. I just don't understand them, why they do not want to pay down the 30K, and up until last week they said they wouldn't unless they get more security. 

I did my calculations last week on the mortgage repayments when the 30k would be paid off  I could afford it, but then as I say the bank turned around and said that the monthly payments will not reduce so I am back in the same position I was in first day with the repayments.










Greta said:


> Is there anything in your contract that allows AIB to demand more security? The value of the site *is* very low compared to your debt secured on it, but that's the bank's problem, they shouldn't have lent your the money without adequate security in the first place!
> 
> I am not sure how widespread such practice by banks is, but it's really appalling.
> 
> I think Brendan is right, you should stand up to the bank and fight to get the 30,000 back, you wouldn't have had any immediate financial problems if you hadn't given this money to the bank, as you could have used it to subsidise loan payments for a very long time or paid some off the loan and retained the remainder. It's not up to the bank to decide what you should do with *your* money, just because they were stupid to lend without sufficient security.


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## focus (14 Mar 2011)

losttheplot said:


> Didn't think they could do that, it has nothing to do with your mother. It sounds very unprofessional. Sounds like someone screwed up by giving you the initial loan and is panicking and maybe trying to hide it from their boss. I wonder was their a "rogue" loan approver firing out loans to blow up their commision. Now it's all gone wrong and they're desparetely trying to clear it up. I also find it strange that you received text messages from them. All my contacts with banks has always been mail, voice calls or voice messages - never a text. Is it always the same people in the bank you're dealing with?


 
I cannot remember the person that gave me the loan. The bank manager was busy at the time and sent me on to another Aib bank. A friend of hers worked there. The fellow that is looking after the loan now only contacted me in Sep 2010


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## Greta (14 Mar 2011)

lee75 said:


> I did my calculations last week on the mortgage repayments when the 30k would be paid off  I could afford it, but then as I say the bank turned around and said that the monthly payments will not reduce so I am back in the same position I was in first day with the repayments.



What does your contract/term & conditions say about repaying early part of the loan? Does it permit you to reduce the monthly repayments or does it have to go into reducing the term of the loan (which is what the bank is doing)?

It is understandable the bank wants you to repay as much as possible as fast as possible and doesn't want to reduce your term, as even after taking 30K off the loan, the security of the site is still inadequate. The real question is - is the bank allowed to keep your repayments at the same high level or not.

If you are having repayment difficulties, speak to MABS, then go from there.


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## focus (15 Mar 2011)

My solicitor is going through the contract. Will let you know how I get on. Thanks to all for thaking then time to respond.


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## Sunny (15 Mar 2011)

Lee, if you are a standard variable rate, they can't refuse your request to use the 30k to pay off part of the mortgage. I don't understand their point about the extra security or that the monthly repayments won't drop. I presume you have gone to the manager about this. I would contact them again, ask them to refuse your request in writing or explain why the monthly repayments won't drop and inform them that you will be contacting the Financial Ombudsman.


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## focus (15 Mar 2011)

Thanks Sunny. Hopefully will have some news on this soon.


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## focus (25 Mar 2011)

Spoke to the bank today. They are putting my 30K against the 100k, but have told me the repayment will not change. If rates stay the the same I will have the loan paid back sooner but if rates go sky high It will take the full term to pay off and if there is any short fall at the end of the term this must be paid off in a lump sum. I was never told this from day one. I was thinking if I reduce the capital surely my repayments will go down, and to top it all off they told me my credit rating is damage for the next 7 years for missing a few payments in protest of getting my 30k back against the 100k. 

My argument with them is all this started when they demanded the 30k back from me, and they admitted it. I sold the property in Hungary for 30k and my intention was to leave it in a high interest account @ 8% hungarian forint. 

The bank are trying to screw me every way.


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## focus (29 Mar 2011)

HI

Does anyone think I would have a case against AIb ?
Any help would be apareciated.


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## Bronte (29 Mar 2011)

What exactly is your case though? You agreed to put the 30K against the loan, just because they won't reduce the payments doesn't mean you have a case against them. As long as both you and they are complying by the terms and conditions of the loan than you have no case. The fact that you missed some repayments means probably you have not complied with terms and conditions. You say they advised you to put the sale money into a certain account, you did do this but you didn't have to. 

You have made a presumption that if you pay back part of the loan the repayments will go down but the bank does not agree. 

You also say you were not told on day one what would happen in the case of different scenarios, did you ask, did you read the terms and conditions of the loan. 

The only way you have a case is if it's the bank's fault you didn't continue to make repayments.

Surely the fact that the 30K reduced the loan also means you'll pay a lot less interest.


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## focus (29 Mar 2011)

My family and I have been banking with AIB for years surely you think they would act in our best interest.

They gave me a 100k mortgage on a site worth say 100k in the good years. Property collapsed site only worth 10k now. Bank has a problem.

They put me under pressure to bring in the money. The person in charge said he was under pressure form head office to get money in against the loan even though up until then I never missed a repayment.. Constant phone calls and text as to when the money was coming in. Then when the money came in I was put under pressure again to sign a new laon approval and this had to be done immediately again as he said he was under pressure again from head office. I signed this because I did not want any trouble from the bank. So now the the bank problems are less the 30k is in the bank. I was paying interest on it to keep it there. When I asked to put the 30k against the 100k they asked for deeds of my mothers land to secure the loan. If she had this would have been another bonus for the bank. Now and only for my solicitor contacting the bank the 30k is off the 100k. But my monthly payments are still unaffordable. The should have expalined to me first day that the monthly payments were set. I was put under so much pressure to sign every time and get money in. I just did it as I never thought the bank would try and screw me.


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## Sunny (29 Mar 2011)

lee75 said:


> My family and I have been banking with AIB for years surely you think they would act in our best interest.
> 
> They gave me a 100k mortgage on a site worth say 100k in the good years. Property collapsed site only worth 10k now. Bank has a problem.
> 
> They put me under pressure to bring in the money. The person in charge said he was under pressure form head office to get money in against the loan even though up until then I never missed a repayment.. Constant phone calls and text as to when the money was coming in. Then when the money came in I was put under pressure again to sign a new laon approval and this had to be done immediately again as he said he was under pressure again from head office. I signed this because I did not want any trouble from the bank. So now the the bank problems are less the 30k is in the bank. I was paying interest on it to keep it there. When I asked to put the 30k against the 100k they asked for deeds of my mothers land to secure the loan. If she had this would have been another bonus for the bank. Now and only for my solicitor contacting the bank the 30k is off the 100k. But my monthly payments are still unaffordable. The should have expalined to me first day that the monthly payments were set. I was put under so much pressure to sign every time and get money in. I just did it as I never thought the bank would try and screw me.


 
You are still in a strong situation. Make sure the bank understands you can't make the monthly repayments. Paying off the 30k against the loan and keeping the same repayment schedule reduces the loan term. Tell them you want to the keep the original loan term which is sounds like you already have. If they still don't do it, well simply go into arrears on the loan. (assuming you honestly can't afford the repayments) Their head office will agree to restructure quickly enough when they realise they are sitting on worthless security.

To be honest, it sounds like a branch trying to cover it's ass.


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## focus (11 Apr 2011)

MrDerp said:


> Something really doesn't add up about this whole situation. OP are you on a fixed interest rate at the moment? If so, the bank would have every right to insist on the same payment for the duration of that fixed rate contract. No not on a fixed rate, they just told me I was on a fixed monthly payment. I argued that I was on a variable but they said no the monthly payment was not changing.
> 
> If you're on the Standard Variable Rate, then that 30K should reduce the term length. If you want to decrease the payment to 70K over the same length of time, you would need to remortgage the new amount over the same term I think, which the bank is never going to do given the extremely low LTV. My solicitior phoned the bank and told them that the 30k must be put against the 100k. I don't know what pressure she put on them but it worked and now the 30k is being put against the 100k. I could be wrong, but I believe overpaying a mortgage, where allowed, will reduce the term rather than the payments. However, this means you pay the same principle monthly and should in theory reduce your interest payments unless you're on a fixed rate - in which case the bank has a contract to expect a fixed amount of interest for the duration of that contract
> 
> As for the 30K deposit being used as security, that's very odd, but it's probably the bank trying to make its balance sheet look healthier. 10K site on a 70K loan is LTV of 14%, while 10K site + 30K deposit is 40K security on a 100K loan giving an LTV of 40% which helps the banks balance sheet. It sounds like they tricked you into voluntary charge on your asset, the 30K.


 Yes they tricked me to put the 30k in a deposit account with no access to it and charge me 4.8% to borrow this 30k and give me 2% on deposit


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## Gekko (11 Apr 2011)

Why didn't you follow Brendan's advice (re the Ombudsman etc)?


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## focus (11 Apr 2011)

I am send off the details this week.


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