Update, family member received a check from AIB for approx €1600 split €1000 compensation plus €600 for professional fees.Bump
Anyone have any thoughts on this. A family member contacted me last night and appears to be in the same boat as Selvin above (and a raft of other people).
They moved jobs to AIB and moved their mortgage to the staff mortgage in 2006.
As such they're loan was split between a portion on a tracker / and a portion on the "staff preferential rate". This "staff rate" had the same clause as Slevin listed above (from their memory - they've to dig out their docs yet).
When they removed the Preferential rate they were contacted and advised SVR or Fixed were only options. They specifically remember being told that the tracker option was no longer an option.
This issue would appear to fall into the AIB's wider stance re the "Prevailing Rate" of ECB + 3.67% (AIB reiterated this to the Finance Committee in Sept 27, 2017 - link at end).
I've a couple of problems with this:
- Family member was not offered this tracker + margin in Jan '09.
- The simplest argument is the prevailing rate should be the rate applied to the closest loan matching this loan - which of course would be the other part of their mortgage (the tracker part which is ECB+1.1%) i.e. same Borrower, same security, same credit history
- The wording is vague, and the attitude that seems to be gaining traction is that where wording is vague the Bank's should come down on the side of the Borrower/Consumer.
At the Finance Committee Bernard Byrne sought to justify the ECB+3.67% "prevailing rate" based on the disconnection between the Bank's funding costs & the ECB rate.
I'm not sure I fully agree with this argument.
The Bank's cost of funds is a separate issue to the "prevailing rates appropriate to the Mortgage Loan" i.e. the wording highlighted references "the Mortgage Loan", not a "Mortgage Loan Pool".
In this case the specific Mortgage Loan was - (i) performing, (ii) aged [as in the loan had been in existence for over 5 years], (iii) low initial Loan to Value (<80%) [what the LTV at the time was is a different question].
Anyway, I'm wondering if anyone has any thoughts on this (i presume there's a huge number of AIB staff affected). My cousin is going to get her docs together and get all her ducks in a row.
They quoted an indicative "prevailing tracker rate" of approx 8% at the time she came off her staff rate. Now they're offering an ECB plus approx 3.2%.
This came out of the blue. She had submitted no correspondence on this issue to AIB.
I haven't seen the letter she received yet so the above figures may be off slightly.
If nothing else, it suggests they are looking at former staff mortgages.