# Danske Bank selling tracker book - good news for tracker holders?



## JanusGold

Seems likely now Cerberus is going to buy up the Danske loan book. As a Danske mortgage holder, still clinging to my tracker, I am wondering if this is good, bad or indifferent news?
(Cannot post links yet but this was reported The Sunday Times last Sunday and the article is is available online)


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## Brendan Burgess

It's definitely not bad news for anyone who is up to date on their payments. There is nothing that Cerberus can do to get you off the tracker. 

However, it might be good news, although I think unlikely. 
1) They might offer you a deal to switch to another lender and pay off your mortgage early. 
2) They might allow you to move your mortgage to another property - I think that this is very unlikely.

Brendan


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## Adanskecustomer

Have fixed rate with danske (4.65%) will be moving to variable in Feb '17 (4.95%). Have applied to switch to AIB, Still waiting on approval from AIB. Will danskes move to sell loan book to cerberus have any advantage or disadvantage for me.  Should I wait?  Or switch to AIB If I get approved


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## Brendan Burgess

Unlikely to be any different. 

You should switch to EBS which is clearly a best buy. 

Brendan


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## MrEarl

Adanskecustomer said:


> Have fixed rate with danske (4.65%) will be moving to variable in Feb '17 (4.95%). Have applied to switch to AIB, Still waiting on approval from AIB. .....



Are you intending to move from Danske before the end of your fixed rate ?

If the answer is yes, then you should first check with Pepper to see if there will be a cost involved (for breaking out of your fixed rate contract with Danske).


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## Adanskecustomer

Have letter stating there is currently no charge in breaking fixed early . Need to move quickly before loan book is sold.


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## Rasher

Hi Brendan.

Just wondering if Cerberus did acquire the Danske loan book, what are the chances of them doing a deal for people who have a .5   above ecb rate tracker.

Rasher.


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## ronaldo

Rasher said:


> Hi Brendan.
> 
> Just wondering if Cerberus did acquire the Danske loan book, what are the chances of them doing a deal for people who have a .5   above ecb rate tracker.
> 
> Rasher.



I'd say it's something you can hope for, but the chance is that slim that it wouldn't be worth influencing your decision to move home (for example). 

Also, were they to offer a deal, I don't imagine that it'll be a flat incentive as we've seen in the past (if memory serves me correctly, one of the lenders did offer 10% in the past). I reckon a deal, should there be one, would also take into account the term remaining. For example, they may offer something like 0.5% reduction in capital for ever year remaining in term.

I'd like to stress though - I imagine the actual chances of some sort of a deal being done are pretty low.


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## MrEarl

ronaldo said:


> ....I'd like to stress though - I imagine the actual chances of some sort of a deal being done are pretty low.



While I am inclined to agree, the one thing that does keep ringing in my head is that Cerberus are hardly the type of fund to stick around while everyone pays off their 25-30 year homeloans.  That said, perhaps their plan is to flip it on to someone else in another couple of years...


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## aristotle

Or maybe Cerberus plan to try to invoke the clauses in most tracker mortgages where the property is revalued and a new Loan-To-Value percentage is determined. This then may impact the rate you pay.


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## ronaldo

aristotle said:


> Or maybe Cerberus plan to try to invoke the clauses in most tracker mortgages where the property is revalued and a new Loan-To-Value percentage is determined. This then may impact the rate you pay.



If I remember correctly, the Danske (NIB) paperwork only refers to possible action if the LTV rises above 80%. 

Back in the day, National Irish Bank were the best buy for tracker mortgages of 80% LTV and under and the trackers were pulled in 2008.

I really don't see them revaluing the houses in their entire loan book in the hope that, eight years later, a customer is on a higher LTV than they originally signed up to. 

Besides, the paperwork didn't give them a right to revalue your house anyway - an activity that would surely require them to gain entry to your house - which you're under no obligation to permit.


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## twofor1

ronaldo said:


> If I remember correctly, the Danske (NIB) paperwork only refers to possible action if the LTV rises above 80%.



That's correct, the actual wording is;

 ''In the event that your LTV increases above 80% at any time during the term of your LTV mortgage, we reserve the right to convert your LTV rate to our then applicable Home Loan rate''

With property prices increasing again there must be many whose LTV is now substantially lower, with that in mind I think it is also worth pointing out that the same T&c's state that you can renegotiate your LTV rate (Subject to certain conditions), so if your LTV was 60% - 80% when you drew down your mortgage, you would be on ecb + 0.8%.

If your LTV is now 50%-60% you can apply for ECB + 0.6%.

If your LTV is now 0%-50% you can apply for ECB + 0.5%

I am sure Cerberus would not like it and would probably make it difficult, but if your T&c's allow for renegotiation I would guess they are obliged to comply.


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## newtothis

MrEarl said:


> While I am inclined to agree, the one thing that does keep ringing in my head is that Cerberus are hardly the type of fund to stick around while everyone pays off their 25-30 year homeloans.  That said, perhaps their plan is to flip it on to someone else in another couple of years...



That is exactly what I was told by them (using somewhat different words!) when I met with them earlier this year. I was told by Cerberus that their interest was in buying and selling loans, and they did not expect to have any remaining after two years. Mind you, I'm not sure I believe a word they said, as I was told other things too that I subsequenly found were directly contradictory to what others had been told.

In my own case, I have one of the Danske tracker mortgages which was sold to Cerberus last October. It had been in difficulties, but thankfully not any longer. I am in the middle of coming to an agreement with them to pay it off at a discount, refinacing elsewhere. I understand that others have done and are doing the same.

If you believe what they say, I'd be very surprised if they didn't entertain offers for any other ex-Danske loans they purchase.


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## JanusGold

Looks like I'll have to go with a personal loan for renovations if this is the case....

I wonder also is this an indication that the likes of Pimco see interest rates rising sooner than is generally thought. The loans aren't all trackers and I assume (perhaps naively) that higher rates give a higher range over the base rate for banks on variable rate mortgages and hence the opportunity to make more profit.


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## RedOnion

If they fund this via a covered bond with the coupon linked to ECB, it won't matter if rates rise or fall, their margin over the cost would remain the same.

It's only if they were funding via deposits where they can't pay negative rates that rising rates would benefit them.


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## westernway

have an LTV tracker that was with Danske, now with Promontoria (pluto). Some years ago, while with DANSKE, we warehoused part of the loan, and are repaying the other part. now we have an offer, verbal, to buy the whole lot at a reduced amount - any advice appreciated. we asked for a figure, they said yes straight away, now not sure we've done the right thing... all verbal so far


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## Gordon Gekko

What sort of write-down?


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## niceoneted

westernway any update for us.


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## westernway

Need to get some independent financial advice in this as reslise the tracker is valuable. 
Read quite a few articles since posting - and generally advice is write down would need to be in region of 40% to make it worth giving up tracker.  

How to find advisor now - someone not affiliated to a bank! Any tips?


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## westernway

Write down offered currently is roughly 30% discount on overall value of the loan
We would be interested in selling up our house to relocate- but are we wiser to stick on our tracker?


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## RedOnion

You'd need to post far more details if you want advice on this.
Have you even approached another bank about getting a mortgage yet?


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## JanusGold

westernway said:


> Write down offered currently is roughly 30% discount on overall value of the loan
> We would be interested in selling up our house to relocate- but are we wiser to stick on our tracker?


Is this write down offered on all Danske trackers or only the loan book that was bought a few years back?


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## RedOnion

JanusGold said:


> Is this write down offered on all Danske trackers or only the loan book that was bought a few years back?


I'm guessing its  because it was a warehoused loan. Different to your circumstances unfortunately.


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## westernway

that's correct RedOnion, part of the loan was warehoused - we went through MARP a few yrs ago.
no we have not approached another bank - we looked for independent advice earlier today, and they said see first if you will get another mortgage.


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## westernway

redonion, im new to the forum and was somewhat nervous about posting details - when you say i need to post far more details - what info would help to include in my query? thanks!


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## MBF68!!

westernway said:


> have an LTV tracker that was with Danske, now with Promontoria (pluto). Some years ago, while with DANSKE, we warehoused part of the loan, and are repaying the other part. now we have an offer, verbal, to buy the whole lot at a reduced amount - any advice appreciated. we asked for a figure, they said yes straight away, now not sure we've done the right thing... a
> 
> Write down offered currently is roughly 30% discount on overall value of the loan
> We would be interested in selling up our house to relocate- but are we wiser to stick on our tracker?





How did you get on  ? My situation is I have a performing part of a very low tracker a parked part of the remainder of the mortgage  and a non performing  unsecured loan. MY thoughts are I will have to offer a decent chunk on the performing loan, a decent discount on the parked and a sizable discount on the  unsecured  ?


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## MBF68!!

newtothis said:


> That is exactly what I was told by them (using somewhat different words!) when I met with them earlier this year. I was told by Cerberus that their interest was in buying and selling loans, and they did not expect to have any remaining after two years. Mind you, I'm not sure I believe a word they said, as I was told other things too that I subsequenly found were directly contradictory to what others had been told.
> 
> In my own case, I have one of the Danske tracker mortgages which was sold to Cerberus last October. It had been in difficulties, but thankfully not any longer. I am in the middle of coming to an agreement with them to pay it off at a discount, refinacing elsewhere. I understand that others have done and are doing the same.
> 
> If you believe what they say, I'd be very surprised if they didn't entertain offers for any other ex-Danske loans they purchase.


Can I  ask what type of discount did you get to move your mortgage many thanks


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## newtothis

MBF68!! said:


> Can I  ask what type of discount did you get to move your mortgage many thanks


Sorry for the delay - I've only just seen your question.

The discount was around 33%. They accepted the first figure I suggested, which surprised me somewhat. A chunk of this has to be offset against the difference in interest rate, but we're still ahead. To be honest though, I would have accepted a figure that left us no better off financially to be rid of them. The toughest part was getting approval for a new mortgage to pay it off, given the history: we're now with AIB.


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## Brendan Burgess

Before anyone gets their hopes up, newtothis got her discount over two years ago. 

It's possible that they are still doing this, but I have not heard of it recently. 

Brendan


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## newtothis

Brendan Burgess said:


> Before anyone gets their hopes up, newtothis got her discount over two years ago.
> 
> It's possible that they are still doing this, but I have not heard of it recently.
> 
> Brendan



I can confirm two things. Firstly, you are correct about the timeframe - I should have mentioned this. Secondly, newtothis is a "him" not a "her", though that's not that relevant (the mortgage was actually for a "him and her").


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