Borrower owned only one property; lender refused to apply MARP

Brendan Burgess

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From the Ombudsman's The [broken link removed]


Interest rate applied to mortgage
Josephine owned one property in Ireland and had it rented out. She lived in another property herself which
she did not own. The bank incorrectly assumed the property she owned was an investment property, as it
thought Josephine owned the house she lived in. The bank classified the mortgage at a commercial interest
rate rather than a lower, primary residence interest rate. Unfortunately, Josephine got into arrears with the
mortgage. Having deemed the property an investment property, Josephine was not offered the protection
of the Mortgage Arrears Resolution Process (MARP), which is available to all mortgage holders in respect of
primary residences and the bank appointed a receiver to the property. In mediation, Josephine was able to
prove that the property in question was the only property she owned in the State. The bank stood down the
receiver, paid Josephine approximately €28,000 in interest adjustment for incorrectly charging her a higher
commercial rate and gave her approximately €18,000 in compensation.
 
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