AIB refund €400k in overpaid tracker mortgage interest -Going to revise LTV % upward?

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Towger

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From RTE :
AIB is to return almost €400,000 to customers it overcharged on tracker mortgages. The overcharging affects 436 mortgages with the average refund being €906. The bank said the Financial Regulator had been informed of the mistake. In a statement to RTÉ News, AIB said it offered different tracker rates to customers based on the loan-to-value ratio of their mortgage. The error happened when customers were charged an interest rate that did not match the loan-to-value ratio on their account.
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This is interesting, does anyone have the exact details of that happened?

It looks as if AIB are reviewing their Loan to Value Ratios on their Trackers, in the next few months are we going to hear of people being hit with higher interest rates as the Loan to Value Ratios have dropped?

In February 2007 (when everything really went mad and 100% mortgages were the order of the day) AIB dropped their Tracker to ECB + 60bp for Loan to Values of up to 60%. The only problem was that existing tracker holders had to look for the new rates. Is it possible that someone has forced them into the retrospectively applying them?
 
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Re: AIB refund €400k in overpaid tracker mortgage interest -Going to revise LTV % upw

Towger said:
From RTE :
This is interesting, does anyone have the exact details of that happened?

It looks as if AIB are reviewing their Loan to Value Ratios on their Trackers, in the next few months are we going to hear of people being hit with higher interest rates as the Loan to Value Ratios have dropped?
Click to expand...

I don't know the exact details but it looks self explanatory. Customers were put on the incorrect rate by AIB. Instead of being on the rate they were entitled to of say ECB + 0.75%, they were put on ECB + 0.95% for example.

It doesn't look like AIB are reviewing their loan to value ratios, it looks as if a few customers spotted that they were on the wrong rate and AIB had to rectify this.


www.moneybackmortgages.ie
 
Re: AIB refund €400k in overpaid tracker mortgage interest -Going to revise LTV % upw

How would AIB caculate LTV's in the current climate?

EG if they gave a mortgage at a particular LTV in say 2007, how would they deduce the current LTV for the house given that property prices have tumbled? Or is it based on the value that they received from their valuer before the mortgage was approved (thus ignoring the recent turmoil).

If AIB recaclulate a new lower value, its to their benefit I think since the loan will be a higher proportion of this value (and therefore attract a higher interest rate). If the value is left as it was, its to the consumers benefit.

M
 
Re: AIB refund €400k in overpaid tracker mortgage interest -Going to revise LTV % upw

In this case, it seems they used the value as per the valuation report that was submitted with the mortgage application i.e ignored the recent downturn.

IIRC, there was a similar discussion in relation to NIBs loan to value ratios if you want to try a search.
 
Re: AIB refund €400k in overpaid tracker mortgage interest -Going to revise LTV % upw

All the loans in AIB's case were tracker mortgages.

Therefore the change in LTV due to the recession should not have any affect on the interest rate.

I have never come across a tracker mortgage that has a provision for the rate to change other than in line with the ECB.
 
Re: AIB refund €400k in overpaid tracker mortgage interest -Going to revise LTV % upw

They went with the asking price of the house next door for us!!!! We switched after about 2 years in. We were on the top LTV, wonder if we are due any money back? How do you fnd out?
 
Re: AIB refund €400k in overpaid tracker mortgage interest -Going to revise LTV % upw

Think we might be due some money back too - how do we find out. Should we contact AIB Mortgages in Dublin?
 
Re: AIB refund €400k in overpaid tracker mortgage interest -Going to revise LTV % upw

Maybe if they are revising making valuations they will use the long term economic value that should bring in everybody to below 60% or so.
 
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