# AIB says the failure to offer me the prevailing rate did not result in the voluntary sale of my property



## zxcvbnm (14 Jul 2021)

I got a reply from AIB today.

Quick background

I had 3 properties - all put into voluntary sale. 2 properties were overcharged originally for which i received compensation The 3rd property was part of the [prevailing rate cohort.  (Although I would argue the 3rd was impacted, albeit not directly,  due to the domino effect of the other 2).
I had sold the property at this stage so received 12% lump sum last year.

In light of the the ombudsman's decision and given the domino impact of the other 2 properties being overcharged as they were, I went back to AIB and asked them to get onto KPMG (who did the original calculations) and ask then to do a full reassessment of the entire portfolio as a whole to see if the 3rd property was in fact affordable had none of these overcharging's occurred.

To be clear - I wasn't demanding an extra payment. I was requesting that the full consequences of the overcharging be determined to see if it was causal to sale to this 3rd and final property. My argument being if we do not investigate then we cannot know the full consequence,

AIB replied this morning saying they refuse to get KPMG to do an affordability calculation on this 3rd and final property because

_1. It is not a refund based on us applying a lower interest rate retrospectively to your accounts
2. Furthermore, these payments have been made outside of the remit of the central banks Tracker Mortgage Examination(TME) framework. As such, affordability assessment is not required._

My view on the above points is:
1. IF the mortgage had been 12% lower (which the ombudsman seems to state) then my payments  would also have been lower. They can dress it up any way they want but i was paying them more money than i should have been.
2.  This may technically be true. But if the impact is it reduced my affordability to retain the property at the time, then effectively it is a route to get this 3rd property reassessed under the original TME.


What are other peoples views on their arguments above?
@Brendan Burgess Technically what was the ombudsman's decision? Can we legitimately argue that had AIB behaved correctly day opne, that interest rate payments at the time would have been 12% lower?

My next step is to go to the tracker panel  to ask them to intervene to get AIB to get onto KPMG and do a recalculation of affordability on this 3rd property.


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## Brendan Burgess (14 Jul 2021)

1) I have  no idea why you are involving KPMG in this issue.  Seems very odd to me. 

2) Likewise the Independent Appeals Panel has nothing to do with this.  That is a component of the Central Bank Tracker Mortgage Examination. 

3) You raise a very interesting point which I had not seen AIB's answer to before. 

The Ombudsman's decision was great in that it gave people substantial redress.
However,  because of the 12% write down structure, it does not make it easy to quantify losses. 

Had the Ombudsman said "The prevailing rate was 1.5% margin above ECB" you could do the calculations easily enough.

However, it's too simple to say the following: 
"The mortgage balance would have been 12% lower, and so your repayments would have been 12% lower"

In a simple case of one property which had to be sold due to the Prevailing Rate issue, I would do the following calculation. 

1) If AIB had offered you a prevailing tracker rate when your fixed rate ended and if you had accepted it, it would have been around ECB +1.5%. 
2) You (Not KPMG or even AIB) should work out what the repayments would have been if you had been on that rate. 
3) If the prevailing rate repayments were substantially less than the actual SVR repayments and if the money you paid was close enough to what the prevailing rate repayments would have been, then you have a good argument to make. 

In my experience...
Most people who voluntarily surrendered or sold properties did so because the amount they were repaying was way below the scheduled payments.  It would also have been way below below what they would have been charged on a tracker mortgage.  So they would have lost their property anyway.

I have seen  people making this argument about the 12% before. But the borrowers were in big difficulty well before the fixed rate ended, so it would be hard for them to attribute the loss to a subsequent failure to offer them a tracker. 

Brendan


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## Brendan Burgess (14 Jul 2021)

zxcvbnm said:


> I had 3 properties - all put into voluntary sale. 2 properties were overcharged originally for which i received compensation The 3rd property was part of the [prevailing rate cohort. (Although I would argue the 3rd was impacted, albeit not directly, due to the domino effect of the other 2).
> I had sold the property at this stage so received 12% lump sum last year.



Now back to your personal case. 

Am I right in saying that Properties 1 and 2 were cases where you should have been offered a tracker at a margin specified in the contract?  In other words, they were not part of the TME? 

Were all three properties voluntarily sold at the same time?  

If so, it should be clear enough whether you would have lost these properties even if you had been on a tracker at the low rate in the contract and at the prevailing rate of 1.5%. 

You mention voluntary sale. Did AIB write off a substantial portion of the shortfall on sale? 

If so,  you probably have done very well out of it.  I have seen quite a few cases, where the borrowers were very lucky that AIB didn't offer them trackers. If they had offered them trackers,  they would still be in deep negative equity.  But instead, the negative equity was written off and they later got the windfall for the loss of the trackers. 

Did you take a case to the Appeals Panel or the Ombudsman over the loss of those properties? 

How did you get on? 
If you did not take a case, why not?

Brendan


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## Brendan Burgess (14 Jul 2021)

If you put together a case, that 
1) The sale would not have been necessary if you had correctly got trackers on all three properties
and
2) You have lost out by being forced to voluntarily sell the properties 

then you can take that to the Ombudsman.   Not KPMG. Not the Independent Appeals Panel.


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## zxcvbnm (14 Jul 2021)

Brendan Burgess said:


> Now back to your personal case.
> 
> Am I right in saying that Properties 1 and 2 were cases where you should have been offered a tracker at a margin specified in the contract?  In other words, they were not part of the TME?
> 
> ...



Thanks Brendan

(The reason I mentioned KPMG is because they were assigned the task day one of determining whether overcharging was causal to sale. So I assumed if another calculation had to be done to determine if the 3rd property was also causal to sale then it would be them to do it.)

A brief summary

*2014*: I had voluntarily sold all 3 properties back in 2014 when AIB wanted to move repayments from interest only to capital and interest (I had been successfully been paying interest on all 3 properties at the time of sale). I subsequently entered insolvency to get rid of the residual debt.

*2017*: I discover properties 1&2 were overcharged and the overcharging was deemed causal to sale and I was paid out the appropriate redress and compensation. Note property 3 was not assessed for affordability at the time as it was not considered directly impacted.

*2020*: Property 3 is in the prevailing rate cohort (along with a remortgage on both property 1 and property 2). I was paid out the 12% lump sum totaling €75k

*2021*: I ask AIB to investigate whether the whole tracker mortgage thing was causal to sale on this property 3 also. (Be it due to the prevailing rate issue OR the domino impart of properties 1&2 OR a combination of both).
Keep in mind I was successfully paying the interest on property 3 at the time of sale (along with property 1&2)  But the task of moving all 3 properties to capital and interest seemed insurmountable, and rightly or wrongly, sold all 3.

*Today:* AIB reply today to say they will not be investigating whether property 3 was affordable.

In my mind, had all 3 properties been at the correct rate, then all 3 would have been affordable. AIB are in agreement that is the case for properties 1&2 and have paid out accordingly. I just want the same calculation to be done on property 3.

I assumed my next step in the panel to ask then to get AIB to do an affordability calculation?


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## Brendan Burgess (14 Jul 2021)

I don't know why you are asking anyone else to do an affordability calculation. Do it yourself and show that all three were affordable.  Let AIB dispute it if they wish.

Did AIB proactively decide that 1) and 2) were causal or did you have to persuade them? 

If the losses of the trackers in 1) and 2) were deemed causal to the sale of 1) and 2) , surely you should have argued at the time that they were also causal to the sale of 3) as well, tracker or no tracker? I think it would have been much easier to show back in 2017  that the loss of 3) was the result of problems with 1) and 2).

I think you will need to compile that argument now that the lack of a tracker on 1) and 2) and the failure to offer a tracker on 3) resulted in the loss of 3).

Make a complaint to AIB now on that issue. 
They will reject it with a Final Response Letter
You can then go to the Ombudsman.

Brendan


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## zxcvbnm (14 Jul 2021)

The reason I asked AIB to do the calculation was that ultimately they would presumably have to satisify themselves on the figures. But yes... maybe presenting then with my figures first would have been a better strategy by me.

AIB told me the overcharging was causal to sale on properties 1&2 back in 2017. (That was the first i ever heard of the whole tracker issue in fact)


At the time, i did appeal to AIB and panel that the domino effect also resulted in the loss of property 3.

But i presented the case really badly. It  was mixed in with loads of other small issue - and I had no figures done other than saying it probably was the case. The panel subsequently also rejected the claim at the time. But it really was presented poorly. IT was like just a couple of lines by me.


I was hoping the ombudsman decision last year would be my ticket back into appealing as i assumed it could argue repayments would have been 12% less - meaning it was in fact more affordable again. And thereby I appealed for AIB to do the calculation

I was planning on going to high court / ombudsman just prior to the ombudsman decision on prevailing rate last year but held off and decided to go back to AIB in light of ombudsman decision.

SO you think ombudsman next is your advice yes?  My preference would be for the panel to instruct AIB to get that calculation done. And that answers it for once and for all for all parties. And quicker too and fare les hassle.  

IF i was to go to teh ombudsman direct, when presenting my case, can i not argue that repayments were 12% less in light of last years decision? The technicalities of that payout are confusing me. AIB said it is not a refund of overpaid interest. IT seems a bit of a fudge by the ombudsman if i cannot deduct that when compiling my case on affordability of property 3?


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## Brendan Burgess (14 Jul 2021)

The Appeals Panel is not an option for you as it's part of the TME. So stop talking about it. 



zxcvbnm said:


> But i presented the case really badly. It was mixed in with loads of other small issue



It's not easy to win a case. You must think clearly and focus. If you distract with small issues or start talking about irrelevancies like KPMG or the Appeals Panel, you have no chance. 

1) You must now make a formal complaint to AIB - set out your case. Do the calculations yourself.  You can't go to the Ombudsman until they issue you with a Final Response Letter.  (Unless the final line in the recent letter was "This is the final response" in which case you can go to the Ombudsman.) 

2) Assuming they reject your complaint, go to the Ombudsman. 

But I will stress again. You must focus. If you go off in tangents, you have no chance at all. 

I think you probably need professional assistance to keep you on track.  (autocorrect suggested: "on tracker") . 

Contact Padraic Kissane.

Brendan


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## zxcvbnm (14 Jul 2021)

Ok. Thanks for the assistance Brendan.


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