# ptsb has offered to extend by interest-only period by three years



## Encourager (19 Feb 2013)

Hello

Just had an offer from PTSB end January offering the following on our BTL tracker

1. Capitalisation of arrears 
2. 3 years interest only period 

after which it will revert to paying interest and capital again.

We have a BTL tracker with PTSB taken out in 2006. As far as we were concerned there was only ever interest to be paid on the loan and we could pay off the capital whenever suited us.
In 2009 they requested payment of interest and capital - which would have trebled the repayments - so we went to the ombudsman.

The ombudsman found against us - no surprises there I guess, so we joined the Walter Odlum group.

That update is that they are still in preparation for a court case - proceedings to have the interest-only payment schedule for the term of the loan honoured by the bank - that's all I know for now.

My question is
1. We're in dispute with PTSB about even BEING in arrears - we simply don't accept that these were the terms under which we took out the mortgage (through a broker) so to even contemplate such an offer is crazy, and 
2. If we don't accept this offer what happens then? I asked that question and did not get a straight answer!

Has anyone else had such an offer? Did they accept?


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## Luternau (19 Feb 2013)

You really should be contacting Walter Odlum about this for his advic before signing anything. I would not trust PTSB at all. Fool me once..:fool
Me twice ....

What are the circumstances that led to this offer? Are you in correspondence with them?

Did PTSB not state to the court it would keep all those challenging their decision, on interest only while the matter was before the court? 

If so, it seems odd that they should be mentioning capitalisation of arrears as an option, while the whole substance of what would place you in arears is sub-judice.

In any event, no matter what the outcome, capitalisation of arrears is not a solution unless the current LTV is low. I believe the Central Bank said this was not a long term solution either.


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## Brendan Burgess (19 Feb 2013)

Of course, talk to Walter Odlum, but I think you have been offered a very fair deal.

I have seen some of the documentation and it was absolutely clear to me that the loan reverted to capital and interest after the 5 year period. 

I have seen an Ombudsman decision and it clearly backed up the ptsb's case. 

You are getting an additional three years on top of the three years since 2009? They are leaving you on your tracker? 

That is a very fair deal. I think you should go for it. It gives you three years to sort it out. Save up the difference between the rent and the interest paid and you will probably get another year or so out of it. 

That gives you four years.  A lot can happen in 4 years.  Rents can rise. Your other income can rise. Property values can rise.  Of course, all the opposites can happen as well. 

If it's still unviable after 4 years, you will go into arrears. But you will be in a lot less arrears than you would otherwise have been.


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## Luternau (19 Feb 2013)

I would agree that the 3yr interest only is a very good deal. I had that typed but I somehow deleted it before posting. 
Brendan is right that you would or should be able to add another year of capital plus interest to the 3yrs with profits/savings. And you never know what happens in 4yrs......


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## Luternau (19 Feb 2013)

Brendan Burgess said:


> I have seen some of the documentation and it was absolutely clear to me that the loan reverted to capital and interest after the 5 year period.
> 
> I have seen an Ombudsman decision and it clearly backed up the ptsb's case.



Brendan, if the PTSB case is so strong, how come they stopped the process of switching interest only BTL owners to cap plus interest if they were to keep the low tracker rate? This was not a court order.
And, how come they say they will have a range of measures to help all mortgage holders-incl these same tracker BTL customers?  
And, how come they offered such a good deal to this guy if the ombudsman found in their favour?
Maybe matters are not as clear as the ombudsmanns decision, which if I am correct, is not made on a point of law?


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## Brendan Burgess (20 Feb 2013)

Hi Encourager



> The ombudsman found against us - no surprises there I guess, so we joined the Walter Odlum group.



I overlooked this, If you lost the Ombudsman case, the only appeal you had was to the High Court. You can't get a second bite of the cherry through a court case, other than the appeal.  Is it for a different loan on a different property? 



> 2. If we don't accept this offer what happens then? I asked that question and did not get a straight answer!



I overlooked this as well.  And it's a question I have asked as well. 

If you don't accept their offer, you will continue on a capital + interest repayments basis. 
Your arrears will increase if you don't pay the full amount due. 
The ptsb contract probably allows them to charge 6% additional interst per annum on the arrears. They could do this, although, I understand that lenders have not been doing this. 
The ptsb contract does not allow them to change the terms of your contract e.g. change your rate to SVR. (Obviously check your mortgage agreement to confirm this) 
In the end, they could repossess your property. However, if you are paying the interest and some capital, they are very unlikely to do so in the near future. There are much higher priority cases for them to deal with. 

Brendan


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## Brendan Burgess (20 Feb 2013)

Luternau said:


> Brendan, if the PTSB case is so strong, how come they stopped the process of switching interest only BTL owners to cap plus interest if they were to keep the low tracker rate? This was not a court order.
> 
> And, how come they say they will have a range of measures to help all mortgage holders-incl these same tracker BTL customers?
> 
> ...



Hi Luternau

There is a general myth that the banks are doing nothing for borrowers in trouble. The reality is that where a borrower works with the lender, they do come up with a solution for them.  No, they don't write off debt. No, they don't reduce the interest rate. And in many cases, the borrower is not happy with the solution. But in many cases, the banks offer a fair solution.

The primary problem here is that ptsb has a whole pile of borrowers who can't pay interest and capital. It can put them all into heavy arrears and can start the proceses of repossessing all the properties.  In practice, they can't do that. So they offer these borrowers a deal, such as this one which is fair. 

Jeremy Masding was appointed Chief Executive around this time last year. I get the impression that he is far more practical in facing up to these sort of issues. This offer to Encourager would be an indication of this.


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## Cambodia (21 Feb 2013)

I too have been offered a 3 year interest only period having been moved to interest and capital in June 2011 on a BTL loan with PTSB. 

What is strange about this offer is that I am in the fortunate position of not having missed an interest and capital payment since june 2011 and have overpaid my mortgage since that period leaving a significant prepayment sitting as a credit on the BTL. 

Bizarre why they would offer this to a fully performing loan?


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## Tracker Man (27 Feb 2013)

The whole thing is, five years on, still completely bizarre .  I owe PTSB a seven figure mortgage at ECB + 0.75% on RIPS etc.  In five years of Interest only, costing the tax payer at least €250k, they haven't even written to me once, they haven't tried to switch me nor put me on Cap + Int etc.  Sorry they did offer me the 10% lump sum thing which was instantly shredded. I appreciate every day that I am very fortunate in that my properties are performing very well and what I am not paying them is being accumulated but when you think of the math and the damage to the country as this €250k money is clearly coming from the tax payer the whole thing is bonkers.....and still despite it all PTSB continue to pay the likes of Commerzbank the money market rate on my loan and nobody will talk about a deal because of "moral hazard".  Banana Republic!


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## Luternau (27 Feb 2013)

Welcome to AAM!
You are one of the very fortunate ones who has had their notice of switch to capital and interest syspended because of the challenges. That in itself means a difference in treatment for some over others (with the same contract).

When you say "....my properties are performing very well and what I am not paying them is being accumulated..." what do you mean?  I assume you are paying full interest?


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## oceryf (27 Feb 2013)

Cambodia,

Could you tell me did anything lead up to you getting put back on Interest only.

*"What is strange about this offer is that I am in the fortunate position  of not having missed an interest and capital payment since june 2011 and  have overpaid my mortgage since that period leaving a significant  prepayment sitting as a credit on the BTL. 

Bizarre why they would offer this to a fully performing loan?"

*I have spoke to PTSB in relation to there policy on reverting to interest only and they are quiet clear that only once someone has gone through the process of arrears and MARP etc will this option be afforded to them.


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## Cambodia (27 Feb 2013)

Oceryf

Very little happened in the run up to a call offering me a "pre-approved" 3 year interest only offer. I got a letter which looked like it was drafted for people in arrears and offering a number of potential "solutions" gave a number (which didnt work) and the next thing I know I get a call with the interest only offer. 

Makes no sense to me.

Cambodia


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## Encourager (27 Feb 2013)

Guys
thanks so much for all your comments and interest.
We are still musing over exactly what to do - nothing is very clear!!!
We have 60 days to respond so will make the most of the time to see if anything occurs......


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## Tracker Man (28 Feb 2013)

Hi Luternau,  What I meant was, I am paying PTSB their interest in full so I'm not in arrears, and the excess I am getting i.e. Rents over costs less tax due to the low interest rates, is being accumulated separately in case the court case is lost and PTSB then try to get me on Cap + Int subsequently.  BTW I'm not involved in the Court Case because PTSB never tried to switch me and never wrote to me so therefore was no use to Walter Odlum.




Luternau said:


> Welcome to AAM!
> You are one of the very fortunate ones who has had their notice of switch to capital and interest syspended because of the challenges. That in itself means a difference in treatment for some over others (with the same contract).
> 
> When you say "....my properties are performing very well and what I am not paying them is being accumulated..." what do you mean? I assume you are paying full interest?


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## ammkoc (18 Mar 2013)

Hi Encourager/Cambodia,
Have you made a decision on the 3 year int only offer? We have been offered the same 'deal' and have to accept/reject by end of this week so it's crunch time!
As others have said, it looks like a good deal but just very wary that accepting any change in the terms of the mortgage now could have implications later on.


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## Luternau (18 Mar 2013)

ammkoc said:


> We have been offered the same 'deal' and have to accept/reject by end of this week so it's crunch time!
> As others have said, it looks like a good deal but just very wary that accepting any change in the terms of the mortgage now could have implications later on.



Is yours BTL also? 
Are you in arrears or just paying interest only?
That seems like a great offer-three year of peace or relative peace!


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## Cambodia (19 Mar 2013)

Hi ammkoc

I am accepting this but only after I get confirmation in writing on a number of points including that this new agreement does not change my ECB tracker guarantee for the life of the mortgage etc. Looking at the agreement I got this is not entirely clear so I would prefer to put this beyond doubt.

Cambodia


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## ammkoc (19 Mar 2013)

Luternau said:


> Is yours BTL also?
> Are you in arrears or just paying interest only?
> That seems like a great offer-three year of peace or relative peace!



Yes, mine is also BTL and not in arrears. I paid the capital and interest for over a year until I'd used up my savings and then came to an agreement with ptsb that I would pay the interest and some capital (basically what the rent covered). This was a 6month agreement which is up for review next month.
Cambodia, like you I am leaning towards accepting this offer as I just cannot afford the capital and interest and there's no guarantee that I'll get the same deal that I currently have for another 3years.


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## Luternau (19 Mar 2013)

Yes, it seems like a good deal. I would suggest that you do what Cambodia is doing and seek the same clarification in writing.


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## ammkoc (19 Mar 2013)

Cambodia said:


> Hi ammkoc
> 
> I am accepting this but only after I get confirmation in writing on a number of points including that this new agreement does not change my ECB tracker guarantee for the life of the mortgage etc. Looking at the agreement I got this is not entirely clear so I would prefer to put this beyond doubt.
> 
> Cambodia


 
Cambodia, my offer letter states 'Please be advised that acceptance of this offer will *not *affect your mortgage rate' - does your letter state the same? Just wondering whether this would suffice or should I also seek clarification that this new agreement does not change my ECB tracker guarantee for the life of the mortgage.


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## breakonthru (19 Mar 2013)

*Accepting PTSB 'Letter of Offer'*

Yes, I got an email stating that I would still be on the tracker come the end of the three year IO period. I then signed the agreement and sent it back. Am expecting a similar Letter of Offer on another PTSB mortgage that has gone into arrears.


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## Cambodia (19 Mar 2013)

Ammkoc - my letter says the same but it is not totally clear because there is no definition of "mortgage rate" in either this agreement or the original facility. I had a lawyer friend of mine review the docs and the conclusion was that it was probably ok. I know I am being ultra cautious but given there is so much at stake I asked them for confirmation in writing. 

Cambodia


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