# Urgent Help needed - Speaking to Ombudsman on Wednesday



## 0028673 (6 Jan 2020)

I lodged an appeal to the Ombudsman this summer on behalf of a relative.  My relative took out a Home mortgage at a tracker rate in 2008 for 150K. They needed an additional 30K to finish the property. Unfortunately this is where the problem arose. Instead of getting a 30K loan to finish the property the original mortgage and 30K top up were bundled together at a more expensive rate (Buy to let rate). This property has never been a Buy to let nor were any representations made by my relative to the Bank that this property would be used for renting. Unfortunately my relative did sign up to these changes but would not have any experience in dealing with Financial matters. 

My relative has fallen on hard times and is in mortgage arrears as a result of the changes made to her account.  An appeal was made to AIB to review the case but they have stated that the case has been reviewed and that the tracker mortgage would not be reinstated.
I am due to speak to the Ombudsman on Wednesday.
Any hints?


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## NoRegretsCoyote (6 Jan 2020)

Even if you don't win on the tracker point if the house was never let then it should not have been on a BTL rate which is often 100bp higher than the standard variable rate.

Your relative should assemble a chain of evidence to prove that it was always owner occupied, and that she made a genuine error in signing up to the BTL rate.


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## 0028673 (6 Jan 2020)

Thanks for your response. To expand on my original post. My relative was on tracker mortgage of LTV less than 60% +ECB +.95% in March 2007 for mortgage of 150K.  An additional 30K top up was needed and agreed I August 2008 and that is when they were changed to a much less favourable Buy to let rate of 5.7%.

My relative has modest means and has no other dwelling. This was built on land provided by her Mother and father. It has caused her enormous distress as she has fallen into arrears on the property.


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## RedOnion (6 Jan 2020)

0028673 said:


> has no other dwelling


Can you confirm, was the house they were building their Principal private dwelling, or were they living elsewhere and building this as a holiday home?


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## 0028673 (6 Jan 2020)

They were building this as their PPR. It was built on family land and has never been rented nor was their ever an intention to rent the House.


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## RedOnion (6 Jan 2020)

0028673 said:


> They were building this as their PPR. It was built on family land and has never been rented nor was their ever an intention to rent the House.


I'm trying to clarify something, so that you can get appropriate guidance.

Whether it was intended to be rented it not is unfortunately irrelevant. It was (and still is) very common for a bank to treat a house which was not going to be PPR as an investment, so used BTL rates.


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## 0028673 (6 Jan 2020)

I will clarify this with her but as far as I am aware she was living with her Parents and this house was being built as her PPR. This was always going to be a PPR.


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## RedOnion (6 Jan 2020)

Perfect, and sorry for being pedantic. I didn't want you focusing on the wrong thing.

Was the mortgage in her sole name? 
Were parents guarantors?
Is she currently living in the house?
Is she still on BTL rate or has she moved rates?


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## 0028673 (6 Jan 2020)

Mortgage is in her name and her Father (acted as a Guarantor)
She is living in the house.
She moved from the Buy to let rate in April 2010 to a variable rate for a PPR of 2.59%.

The Buy to let rate was eventually amended to a PPR loan to value rate of less than 50%. 
My contention was that she was on a tracker mortgage and than because of the top up she was taken off it erroneously at time when tracker mortgages were still meant to be available to the public. 
Any advice would be greatly appreciated.


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## RedOnion (6 Jan 2020)

Was the guarantor always there, or only added for the top-up?


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## Banemore (6 Jan 2020)

[broken link removed]. Is churning the wording that is used in this case???. Im not financial expert but i believe this has happened in a number of cases where top up loans were requested onto existing mortgages. If you think about it the mortgage advisor was getting paid for another new loan. I question was this legal??? and was it in the clients best. interests.


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## 0028673 (6 Jan 2020)

Guarantor was always there.


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## 0028673 (6 Jan 2020)

Banemore said:


> [broken link removed]. Is churning the wording that is used in this case???. Im not financial expert but i believe this has happened in a number of cases where top up loans were requested onto existing mortgages. If you think about it the mortgage advisor was getting paid for another new loan. I question was this legal??? and was it in the clients best. interests.




It was in the best interests of the Bank that her tracker mortgage rate was removed! Ethically wrong but I don't know if this will be successful on appeal with the Ombudsman.


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## RedOnion (6 Jan 2020)

Right, final question. 
Was the initial mortgage a BTL tracker or PDH tracker?


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## RedOnion (6 Jan 2020)

Ok, so the facts as I understand them.
These are just my musings, but you've a serious amount of research to do before meeting on Wednesday!

The original mortgage was a BTL, because it's the only one that had the LTV / rate you mentioned.

Sometime prior to March 2008, took a BTL mortgage (<60% LTV, ECB +0.95%). Joint names with father, who owned another property (his PDH). Joint names might explain why it was BTL?

Needed additional funds. Applied for top-up on existing BTL c. March 2008.

AIB had by then withdrawn BTL trackers (but still offered tracker rates for PDH).

Bank offered additional & new funds at then available BTL rates.

Was the criteria for <60% LTV met?

Later, April 2010, changed mortgage to PDH, <50% LTV.

The big question is why was it on BTL rate originally?


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## 0028673 (6 Jan 2020)

RedOnion said:


> Ok, so the facts as I understand them.
> These are just my musings, but you've a serious amount of research to do before meeting on Wednesday!
> 
> The original mortgage was a BTL, because it's the only one that had the LTV / rate you mentioned.
> ...



Apologies for not being clearer.
The original mortgage in March 2008 was a Tracker mortgage of < 60%  LTV as shown below.







In March 2008 an additional 30K was needed to finish out the property. Rather than being a top up of the existing tracker mortgage my relative was taken off the tracker mortgage rate and put on a Buy to let rate for the original mortgage plus the top up. (150K &30K).

Has she a genuine case?


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## 0028673 (6 Jan 2020)

RedOnion said:


> @0028673
> Sorry, it's possible they had a <60% LTV for PDH. I was looking at 2008. They changed the bands during 2007 which is when the letter refers to.



She was granted a tracker mortgage on her private dwelling home at the ECB rate +.95% margin. When she sought to get a top up on the mortgage they bundled the initial mortgage plus the top up together in a Buy to let rate. Thus removing her tracker rate.
Unfortunately she signed this but did not understand the implications at the time. 

Has she a case?


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## RedOnion (6 Jan 2020)

0028673 said:


> Has she a case?


It's impossible to tell on the information provided.

Strictly speaking, I would say no. She didn't have to take the mortgage. She could have gone elsewhere. You keep fixating on it being her PDH - tracker rates were still available at AIB and elsewhere for PDH mortgages. There's something about the circumstances that you're not sharing, and it might be very very subtle.


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## 0028673 (6 Jan 2020)

RedOnion said:


> It's impossible to tell on the information provided.
> 
> Strictly speaking, I would say no. She didn't have to take the mortgage. She could have gone elsewhere. You keep fixating on it being her PDH - tracker rates were still available at AIB and elsewhere for PDH mortgages. There's something about the circumstances that you're not sharing, and it might be very very subtle.



The nub of the issue is that she was on a Tracker mortgage in 2007.  She looked for a top up on the tracker mortgage a few months later which she assumed she was signing up to and did not read the fine print which locked her into a Buy to let rate. My understanding is that at this time Tracker mortgages were still available up to October 2008. I feel she was taken advantage of by the Bank whereby the original mortgage and top up were put on a less favourable mortgage rate. Also it was done incorrectly as this house was not a buy to let property. She always lived in this home.
I am not concealing any facts at all.


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## RedOnion (6 Jan 2020)

0028673 said:


> I am not concealing any facts at all.


Just to be clear, I'm not accusing you of concealing anything. You posted a very small amount of information, looking for help.
I've genuinely tried to help you. 

It makes absolutely no sense that a bank would change a PDH mortgage to a BTL one. Or that they would give a BTL mortgage to a sole mortgage holder for their PDH. If there's nothing else going on, then she has a reason to be aggrieved.

But if there's a genuine reason that the bank would only lend as a BTL, it's different. Hence the question about sole / joint name. Or another example - was the site still in parents names? 

I wish you well on Wednesday.


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## 0028673 (6 Jan 2020)

RedOnion said:


> Just to be clear, I'm not accusing you of concealing anything. You posted a very small amount of information, looking for help.
> I've genuinely tried to help you.
> 
> It makes absolutely no sense that a bank would change a PDH mortgage to a BTL one. Or that they would give a BTL mortgage to a sole mortgage holder for their PDH. If there's nothing else going on, then she has a reason to be aggrieved.
> ...



I appreciate your help Redonion. I understand that the Buy to let rate might look odd but at best it was a clerical error by the Bank.  The mortgage is jointly held by her and her father on land where her father granted her the site to build her house. This site is adjacent to her parents house.

I feel very aggrieved for her. She is under enormous financial pressure as a result of this and has fallen into arrears with the mortgage. 
Thanks for all your help.


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## Clamball (7 Jan 2020)

Do you have documentary evidence of what your relative requested when she asked for the €30K top up?   I know we asked for a top up of our mortgage around 2003 and I was surprised when the bank, at time of drawdown of the top-up, closed our existing mortgage and opened up a new mortgage.  It made no difference to us In our ability to repay but it was not what we requested, and I was very surprised when it happened.  If the bank had said, you currently have a €100K mortgage with 18 years to run, we are going to change this to a 200K mortgage with 20 years to run, I would have been able to understand and ask what difference this made to me the customer, as I was expecting it to be a 200K mortgage with 18 years to run, etc etc.

So it sounds to me as if the father & daughter took out a joint mortgage on this new house which only the daughter lives in. They jointly requested an extra €30K? At the same rate/conditions as previously? And signed all documents provided, not realising they were changing to a new rate? Which they realised within a month when first payment became due? And wrote to bank immediately to rectify the mistake?

it will all depend on the paper trail, email, letters, record of calls. Have it all organised in chronological order for the call tomorrow.

on this date original mortgage, mortgage conrtact, mortgage application, etc

on this date application for top up, all supporting documents, letter of application, mortgage application docs etc

on this date new mortgage, mortgage contract, all correspondence etc

on this date issue noticed, correspondence with bank etc.

Best of luck.


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## luckystar (7 Jan 2020)

Was the father a guarantor on the first mortgage and a joint holder on the remortgage?


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## notabene (7 Jan 2020)

Possibly a little late for you at this stage but I would bring as much documentation, letters, agreements, emails as you can and lay it out in as clear a format as possible with a summary document if you can - information being clear and consistent is essential when presenting them to the ombudsman.


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## 0028673 (7 Jan 2020)

Clamball said:


> Do you have documentary evidence of what your relative requested when she asked for the €30K top up?   I know we asked for a top up of our mortgage around 2003 and I was surprised when the bank, at time of drawdown of the top-up, closed our existing mortgage and opened up a new mortgage.  It made no difference to us In our ability to repay but it was not what we requested, and I was very surprised when it happened.  If the bank had said, you currently have a €100K mortgage with 18 years to run, we are going to change this to a 200K mortgage with 20 years to run, I would have been able to understand and ask what difference this made to me the customer, as I was expecting it to be a 200K mortgage with 18 years to run, etc etc.
> *
> So it sounds to me as if the father & daughter took out a joint mortgage on this new house which only the daughter lives in. They jointly requested an extra €30K? At the same rate/conditions as previously? And signed all documents provided, not realising they were changing to a new rate? Which they realised within a month when first payment became due? And wrote to bank immediately to rectify the mistake?*
> 
> ...



That is it in a nutshell.  I will share what documents I have and hopefully the Ombudsman will look favourably on this.


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## 0028673 (10 Jan 2020)

I spoke to a Dispute Resolution Officer on Wednesday. I was very much a  fact finding exercise. I outlined my case and provided the backup of the original offer letter which stated that it was on a PDH at a tracker rate +.95% margin and the subsequent letter which was signed about a year later where it was changed to a Buy to let rate.

He stated that he would speak to the Bank to clarify why this rate was changed. AIB's notes outlined that it was always a Buy to let property which is simply not true. 

Thanks to everyone for all their insights and comments. I will keep this thread updated and hopefully I will have a  successful appeal.


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## bleary (10 Jan 2020)

Would it make a difference if the 30 k was essential to make the house habitable. In that case the owner would not have been able to change the mortgage to another provider and may have been forced to accept the new rate


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## Brendan Burgess (20 Oct 2020)

Hi 002

How are you getting on with this case? 

Brendan


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