# Central Bank warns lenders over breaking tracker terms



## Florida23 (26 Mar 2013)

*CHARLIE WESTON PERSONAL FINANCE EDITOR* – 26 MARCH 2013
THE Central Bank has warned banks about refusing to put homeowners back on good-value tracker mortgages when they are entitled to this type of mortgage.
A letter sent to every bank last week said that errors and mistakes connected with mortgages were widespread. The Central Bank letter warns banks that it was coming across cases where the terms and conditions of tracker mortgages were not being applied correctly.
It highlighted the issue of customers due to revert to tracker rates, after coming off a fixed rate, not being able to get back to the tracker.
It comes as brokers claim that thousands of homeowners may be entitled to get back on to tracker rates.
Broker Padraic Kissane, has so far succeeded in getting 30 people who opted for a fixed rate back on their trackers in just a few months, following a story in this newspaper.
*Compensation*
Along with having these people restored to their trackers, compensation has been paid of between €8,000 and €22,000 for the overpaying of interest and capital. He accused banks of stalling and refusing to put people back on trackers.
Trackers are the cheapest mortgage in the market, and the interest rate can only change with the European Central Bank (ECB).
The average tracker interest rate is around 2pc, while the average variable rate is 4.3pc.
Mr Kissane, of Kissane Financial Services in Dublin, said mortgage holders who had trackers panicked in 2008 when the ECB rate jumped to 4.25pc and opted for fixed rates.
The homeowners were not told either verbally or in writing that they would not be able to return to the trackers.
Once the banking system collapsed, and lenders were suddenly hit with much higher borrowing costs, homeowners found they were being put on to more expensive variable rate mortgages when the fixed period came to an end.
This is despite the fact that most tracker contracts have a clause in them stating that the deal is for the [COLOR=#009900 !important]life of the mortgage, he said.
"Many homeowners ran for cover in 2008 when the ECB pushed its lending rate to 4.25pc. But they were never told that they could not go back to their tracker," he said.
The broker said banks may not have set out to deny people a return to a tracker, but once the wholesale markets moved against them they suddenly closed off the tracker option.
He said that up to 50,000 borrowers may be entitled to go back on to trackers.
In 2011 Bank of Ireland was forced to put more than 2,000 of its residential borrowers back on trackers and compensate them after the Central Bank intervened.
Mr Kissane will review cases for free, but he charges €500 to take on a case, and takes 15pc of any interest that is refunded. He can be contacted at info@kissanefs.com.
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## Florida23 (31 Mar 2013)

*Sinead Morris reports on mortgage holders trying to keep their tracker rates*

20130331_rteradio1-thisweek-sineadmorr_c20180405_20180457_232_.mp3


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## twofor1 (31 Mar 2013)

I hope the Ombudsman gets his way with this:

The Financial Services Ombudsman has said naming banks that are the subject of complaints to his office would create a "virtuous competition" in the institutions' behaviour towards customers.

Speaking to RTÉ's This Week, Bill Prasifka reiterated a call for his office to be granted powers to release details of complaints against individual banks.

He said making the complaints record of individual banks public would influence how they behave.

Mr Prasifka said the measure would be in the public interest, could be done at no cost to the exchequer, and should have been introduced a long time ago...............



http://www.rte.ie/news/2013/0331/379192-financial-services-ombudsman-wants-banks-named/


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