# Disclosure from mortgage providers when requesting change in mortgage



## joeysoap (16 Sep 2011)

All,
I believe the financial regulator has implemented guidelines to lenders that there is an onus on them to provide full disclosure on the impact of switching terms / rates. i.e. if a customer requests a change from a tracker to a variable the bank must disclose the ramifications financially of doing same so that the borrower can make a fully informed decision on his request.

Not sure about this and if thats the case (cant find any links) does anyone have a link to same and any idea how enforced this is by ombudsman retrospectively?

I lost option of a tracker after requesting move from fixed to variable rate but at no stage of the conversation was that tracker option mentioned. So on the request, there was no disclosure. Indeed the switch was incentivised by there being no break out fee from the fixed rate (the bank now say that this was down to a computer glitch) and I should have been charged a break out, but as the problem was on their side, they bore the cost. Unfortunately I will be bearing the real brunt of the cost by paying 6.15% SVR as opposed to ECB +1.

Any links / direction appreciated.

Joey


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## wbbs (16 Sep 2011)

Were you originally on a tracker before you fixed the rate?

How long ago are we talking about?


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## joeysoap (17 Sep 2011)

mortgage was fixed for 3 year period reverting to tracker then. I wasnt aware of the tracker and with 3 months remaining of the fixed I rang the lender and asked what were my options. Variable was lower at the time than the fixed. 
The move to SVR was in 09. At that point the mortgage documentation was unavailable to me and at no stage was it ever mentioned in discussion. I was told if I moved from fixed to SVR I would incur no breakage fee and to request this offer in writing asap while it was available.
It was only recently on reviewing documetation I discovered the clause about the reversion to tracker. While the original mortgage agreement states that the tracker would be lost if the full term of the fixed rate was not endured, I was not aware of this when dealing with the bank in 09 and they incentivised the move to SVR with no break out charge which they now state was down to a computer error.
Surely if there was no computer error on their part, I would not have received the incentive to move from tracker and would not have requested my fixed rate to end prematurely. The cost of their computer glitch to me at this stage (moving to SVR as opposed to tracker) is approx 15K since 09 to July 11.


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## wbbs (17 Sep 2011)

Don't know where you stand on that one, any directive to make customers aware of what they are doing giving up a tracker is fairly recent, don't know if it applied back in 09.


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## joeysoap (17 Sep 2011)

Thanks wbbs. Will chase up on the disclosure aspect.

However, the lender has admitted that the incentive provided me to switch was as a result of a computer error on their part. I feel that this should nullify the agreement. At no stage did they contact me to say that there was a computer error. It was only dislcosed to me recently as a result of my queries to them. They state that they absorbed the cost of their error in the calculation of the break out cost. However the larger cost initiated by their error is expected to be borne by me. Seems very selective to me.

My case to the ombudsman will be (along with the disclosure element) that the move to variable rate was facilitated by (incentivised by) an error on the lenders part. IF the error didnt occur, the request for transfer would not have occured and I would have remained on fixed for the remaining months, moving to a tracker as per mortgage agreement.


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## wbbs (17 Sep 2011)

Might work, best of luck with it anyway.  Have you gone through the lender's complaint process?


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## joeysoap (17 Sep 2011)

Yes. They immediately discounted my points regarding dicslosure sayong they acted on an explicit request and stated they no longer offered trackers. 

They implied that the cost of the computer error was absorbed by them and this had no relevance to the substantive case. 

Also stated that their agents do not give advice. Strange as they explicitly advised me that the cost of variable monthly repayments were less than the fixed rate costs and if I wished to avail of this 'offer' with no break out fee I should submit same request in writing asap. When I requested recordings / transcripts / logs of the engagement, they replied that they are unable to find any record of my several conversations with them. All they have is the letter I sent requesting the move (in which I referenced the phone conversation of x date and which they now have no record).


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## wbbs (17 Sep 2011)

Is that UB?   I suppose the bank could say they *told* you what the repayments on variable were in relation to your fixed rate repayments, this would not necessarily be advising you to take it.   Banks do not record all telephone calls even though you nearly always get that message but it usually says 'calls may be recorded', I worked in branch banking for many years and no calls were ever recorded, confined to the call centres I would say.


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## joeysoap (17 Sep 2011)

Not UB, one of our more recent bailed out providers.

While advising me that the variable rate was lower they never "told" me to change to it. Merely highlighted the benefit of paying a variable rather than a fixed rate at that time which effectively suggested that it was prudent to do same and then threw in the zero cost breakage (which was an error on their part) and the advice to request this in writing asap while the offer was available.

My request to move from a fixed to a variable was based on the premise that 

from information (advice) I received from the lender that it was more prudent to move to the variable due to reduced service costs.
If there was no computer error on the lenders system, I would not be in this situation.
Thanks for the engagement wbbs, just looking at the costs relating to this its frightening. Already as previously mentioned, I've made payments of 15K in the last 2 years over and above what I would have if I hadnt moved from my fixed rate. Spread this over the remaining 20 years and this is a massive extra cost.

At no point have I denied in any conversation my own culpability in that I should have been aware of the tracker agreement. However, at the time we had some personal issues and due to reasons I wont go into I was not in posession of mortgage documentation when I rang the lender to discuss options. Yes, my bad. But at the very least the lender should have informed me of same and ramifications of moving, rather than making me offers (as a result of a computer error) to move off fixed rate.

I'm ranting now, so excuse the hyperbole.

Bottom line is that there was no disclosure on ramifications of moving from a fixed and losing tracker. 

This whole process was facilitated by an error in the computer sytem of the lender. 

thanks again, Joey


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## wbbs (17 Sep 2011)

Best of luck with it, it's definitely worth the fight anyway.   Be sure to update when you have a result.


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## taldar (26 Sep 2011)

Hi Joey

We have the exact same issue as you, it is with the ombudsman at the moment - fingers crossed


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## Brendan Burgess (26 Sep 2011)

Discussed at lenght in this Key Post

Did you lose your tracker when breaking out of a fixed rate mortgage?


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