# KBC redress query for arrears case & split mortgage



## bowser (26 Mar 2018)

Hi, looking for some advice please - Delighted to received my redress and compensation from KBC today.  We drew down in 2006 on a tracker 0.95%, fixed 2007 for 2 years and rolled to variable in 2009.  In 2013, we ran into arrears (ca 32k).  These were capitalised in 2015 and we were put on a 50/50 warehouse split.
KBC have advised the total excess interest charged was 58k.  All of this has been taken off our mortgage - half off active loan and half off warehouse.  We also received 2 cheques, one for compensation at 20% and 650 for professional advice. 
Naturally we are delighted with this outcome but I can't figure out why all the excess interest has been put off the balance.  I understand we had arrears of 32k and these were capped in 2015.  I rang KBC today to query and was told they put the mortgage balance back to the way it should have been had the error not occurred.  Can anyone please give some more insight into this as I can't get my head around it all, thanks.


----------



## Brendan Burgess (26 Mar 2018)

It's hard to explain this, but I will try. 

If it were an ordinary mortgage and you were in €32k arrears and €58k overcharge, they would set €32k against the arrears and give you a cheque for €26k. 

KBC should issue you a statement showing you what your balance would have been today had they charged you the correct tracker and if you had paid your repayments in full. 

Let's say that theoretical figure would be €200k 

But your combined balance of the active and split today is €270k

So they deduct the €58k off the €270k and reduce it to €212k.  It's still higher than what you should owe today for three reasons 

You missed so many repayments 

They split your mortgage
They extended the term. 

KBC are being astonishingly generous.  Your balance is higher than it should be yet they are giving you €16k compensation. 

They should really reverse the split mortgage as you can probably well afford the full repayments on the whole mortgage at the tracker rate. 

If you can't afford the full repayments, they should have set the compensation against the balance, to make your mortgage more affordable.

Brendan


----------



## bowser (27 Mar 2018)

Thanks for the reply. It is becoming a little clearer as I think about it a bit more.
I asked KBC about the split and their advice was to let it settle for a few weeks before we change anything.  Our repayment will reduce further because of the balance adjustment.  It is better in the long run that our balance has been reduced.  We plan to come off the split once the dust settles and go back on full repayments.


----------



## Variable (16 Apr 2018)

@bowser my situation is very similar. Im still waiting on redress. Would you mind me asking how much you borrowed pls?


----------



## bowser (16 Apr 2018)

Hi @Variable We borrowed 299k in 2006.  We fixed in 2007 for 2 years and should have rolled to our tracker 0.95% in 2009.


----------



## steely1 (16 Apr 2018)

bowser said:


> Hi @Variable We borrowed 299k in 2006.  We fixed in 2007 for 2 years and should have rolled to our tracker 0.95% in 2009.


@bowser   Have you been considered impacted ? and what were your offer and drawdown dates ?


----------



## bowser (16 Apr 2018)

Hi @steely1 Yes we have been restored to our tracker and received redress and compensation about 2 weeks ago.  We drew down on a tracker in August 06 directly with KBC.  We have a special condition in our loan offer that states we have a 0.95% tracker for the life of the mortgage.  We fixed in 07 and should have reverted to the tracker in 09.


----------



## peemac (17 Apr 2018)

@bowser 

When it comes to arrears it can be confusing.
If you had no arrears, approx 15k of the 58k would have come off your mortgage balance to bring to the correct level, so add in arrears and the 50/50 split with probably no payment towards the 50% warehoused portion and the 58k is used pretty quickly.

Guessing that the mortgage drawdown was June 2006 and term for 30 years, the balance on the mortgage if there were no errors and no arrears and correct rate was applied, would be circa €212k at beginning of March and your current payment would be under €1100.

If your mortgage balance is over €212k, KBC are correct in how they applied the overpayments, and if its under €212k (give or take 5k), I'd query it.


----------



## bowser (17 Apr 2018)

Thanks @peemac Could I please ask for your opinion on our redress.  According to the figures from KBC, they asked us to repay 145k between June 09 and March 18.  We should have paid 113k but we actually paid 105k, so we underpaid by 8k.  The interest charged in this time was 98k, they should have only charged 40k so the excess interest charged was 58k.  All of this 58k has been paid off the mortgage balance, split between the active loan and the warehouse portion.  Our main mortgage balance now stands at 240k.  (119k active loan and 121 warehoused) KBC also extended our term by 10 years as part of the restructure in 2015.  We also have 2 top ups of 24k (variable 4.25%) and 5k (1.1% - this was originally over 6 years back in 2007, due to mature 2013 but extended as part of restructure) and both not affected by tracker examination. Thanks a mil.


----------



## peemac (17 Apr 2018)

@bowser  I think there are too many variables for me to give a correct opinion, but it seems the arrears (and you'd have to look at the warehoused portion too) were in excess of the overcharge and applied equally to the warehosed and current portion - which is quite fair.

I think you did well getting the compensation paid as a cheque and I'd now possibly look at further restructuring to get the warehouse portion back into a single repayment mortgage as you don't know what rates will be in ten years time, let alone 20.    

240k @0.95% with 20 years left would come in at about €1100 a month

You must be a good negotiator as KBC seem to have done quite a good deal for you in 2015


----------



## steely1 (17 Apr 2018)

hI @peemac .
Could you give me a rough idea what I would be looking at in comensation and redress If I were sucessful
€292,100 2 year fixed  4.99% on to variable to


----------



## steely1 (17 Apr 2018)

on to variable to feb 11 then fixed for 3 years at  4.65 % and then back on to variable 35 year mortgage


----------



## steely1 (17 Apr 2018)

drew down to fixed Jan 07


----------



## peemac (17 Apr 2018)

@steely1  and others, the ballpark calculation is between €14,000 & €18,000 per each €100,000 of mortgage balance at end of the initial fixed rate period assuming the fixed rate ended between 2009 & 2012. Shorter terms of 25 years and coming off fixed rate late in say mid 2012 would be at the lower end, whereas coming off fixed in 2009 and having a 35 year mortgage would be at the higher end.

so you are looking at about 50-55k overcharge


----------



## steely1 (17 Apr 2018)

@peemac many thanks


----------



## bowser (17 Apr 2018)

@peemac Many thanks for your reply.  We are happy with the redress and compensation.  The interest overcharged was 58k and our arrears back in 2015 were 32k before they were capitalised & restructured so the arrears were not in excess of the overcharge.  KBC's redress figures show we underpaid by 8k. I do think KBC have been fair and I'm happy the balance has been reduced by so much. We also got compensation at the higher end of 20%. Our repayment has nearly dropped by 50% so we will be in touch with KBC to come off the split.  We are delighted with all of this.
I can't take all the credit for the negotiations with KBC, my husband and I both fought that battle and we are happy to still be in the house


----------

