Change of fixed interest rates

[Guest107]

But if fixed rates were cheaper when she came to drawdown would be entitled to the cheaper rate if she had already agreed to the higher rate??? The answer is yes in reality but no if we follow your argument! It works both ways.

But an offer of a mortgage lasts 6 months, had she drawn down after the 6 month was up they could have varied the rate in the 'new offer' .

This is mis selling pure and simple. Its misleading the customer to get the business. Irish Banks Mis Selling 101 .

Like I say , avoid these people and their shystering till she gets her one year fix re-instated at 2.94% as agreed until either Feb next year or June next year.

 

[Sunny]

But an offer of a mortgage lasts 6 months, had she drawn down after the 6 month was up they could have varied the rate in the 'new offer' .

Fair point. The killer though is the 45 day clause in the paperwork. Should have been explained but it wasn't. Sloppy work but not mis-selling. Don't get me wrong. I think AIB should pay up for being unable to train their front line staff properly!

 

[Hel_n]

When did I say anything about a 4 month fixed rate???

I was simply saying that if interest rates had fallen, and the 1 year fixed rate that AIB quoted back in January dropped by the time Shanneah drew down her mortgage, she would then be paying a lower interest rate. During times of falling interest rates I didn't hear borrowers calling out for the bank to give them the (higher) rate they had originally been quoted, so why should it be any different now that interest rates have increased?

The rate that applies is the rate that is in place at drawdown - I think this is perfectly fair - sure the borrower ends up paying a higher rate if there is an increase, but if there is a decrease the reduction is passed onto them also.

 

[Guest107]

Fair point. The killer though is the 45 day clause in the paperwork. Should have been explained but it wasn't. Sloppy work but not mis-selling. Don't get me wrong. I think AIB should pay up for being unable to train their front line staff properly!

Not at all. The product was a 45 day fix misrepresented as a 1 year fix. When did you ever hear of a sale being agreed, closed, contracts out and signed and dusted and money drawn down in 45 days.

They trained their staff perfectly and got their mis sale under false pretensions is what happened

 

[Molly]

When interest rates dropped and borrowers ended up with lower rates on drawdown than they had been quoted, I don't remember hearing anyone complain about misselling

...

Hel_n is correct, if rates had dropped since original quote than OP would have benefited from the lower fixed rate at the time.... ie the rate applicable at drawdown.

Normally you get 6 Months in an offer too.

yes normally loan offers are valid for a 6 month period, however that does not guarantee the rate for 6 months, the loan conditions in this case clearly stated that the rate would be applicable if drawndown within 45 days.

Shoody advise from the AIB advisor though. Theresponsibility to point out the conditions of the loan lie with the AIB advisor and the solicitor.

 

[Guest107]

but the loan docs may not have issued in 45 days so the solicitor may not be to blame.

As I said the 45 day Fix clause means it is almost impossible to complete in time to get the quoted rate. A feasible time from offer to drawdown and completion is min 90 days in Ireland.

 

[CCOVICH]

This is mis selling pure and simple.

They trained their staff perfectly and got their mis sale under false pretensions is what happened

You can prove this actually happened? False pretensions? Training staff as such? Pretty serious allegations pulled out of thin air.

Refer back to the first post, the contract stated (according to the OP) that the fixed rate on offer was valid for 45 days, i.e. you could avail of a one year fixed rate at 2.95% IF you drew down the mortgage within 45 days of the offer.

The advisor never determines the rate, it is the contract.

Like Sunny says, sloppy on the part of the advisor, but it's not necessarily sinister.

At no time did the OP get anything in writing from AIB to say that the fixed rate on offer would apply when they were to draw down, other than within that 45 day period.

 

[Molly]

The product was a 45 day fix misrepresented as a 1 year fix

.

2pack you completely misunderstand how fixed rate mortgage loan offers operate.

All mortgage lenders condition their loan offers to state that the rate applicable to the mortgage is the rate that applies to that product, ie fixed, variable tracker, at drawdown.

most will allow a period of time, like in this case 45 days , in that if you drawdown within that timeframe and rates have gone up, then you may avail of the lower fixed rate.

 

[Hel_n]

Thanks Molly, I don't for one minute think that the borrower shouldn't have been made aware of the fact that she had only 45 days to avail of the rate quoted, especialy since she specifically stated that she wouldn't be drawing down her mortgage until June. I just don't think she will have much of a case with IFSRA since she wasn't missold a product.

 

[MugsGame]

2pack, the fixed rate lasts for a year from drawdown, not from application. This isn't peculiar to AIB.

Shanneah, it would be interesting to ask AIB how they reconcile the smallprint with what their employee told you verbally. Point out that you were not aware the "fixed" rate could change and indeed had changed until after you had accepted the offer. I think you have a case for some reduction with AIB.

 

[Molly]

but the loan docs may not have issued in 45 days so the solicitor may not be to blame

but the solicitor has a responsibilty to point out the loan conditions to their client, so the OP should have been made aware at the point of agreeing to take up the offer, that the rate quoted on the loan offer was no longer available , this would have given the OP an oppurtunity to shop around before drawingdown the mortgage,( presuming they had time) you can accept a mortgage loan offer, but your under no obligation to then subsequently draw it down, you can avail of another mortgage loan offer with another mortgage lender.

I would have assumed that staff selling mortgages would be aware of this fact. nothing new, this is the way loan offers have been for years. AIB did not missell a product, but they are guilty of badly trained staff.

 

[MugsGame]

Molly and Hel_n, it seems to be your contention that misselling by an institution can only arise where misrepresentation arises out of a systematic institution-wide policy, rather than errors by individual staff. I don't think this is true in general, and I don't think small-print protects institutions from verbal errors staff may make. That's not to say there was misselling here. We don't know and I can't comment. I think we can all agree there was misunderstanding.

 

[Guest107]

2pack, the fixed rate lasts for a year from drawdown, not from application. This isn't peculiar to AIB.

In that case "the offer" effectively lasts 45 days not 6 months so its still a Mis Sell IMO and I am not blaming her solicitor as much as AIB .....as ye may have guessed

Nor do I think for one moment that the nuanced delivery of staff training within AIB was not done perfectly in this instance. I feel AIB trained the "adviser" very well and very professionally and take th'Umbrage at those who say otherwise .

 

[MugsGame]

2pack, your continued allegation of deliberate misselling seems groundless given the facts outlined by the OP.

The rate offer lasts 45-days, the offer to lend the principal lasts 6 months, the rate lasts a year from draw-down. This is standard. There is no money market AIB can borrow from now to fulfill fixed rates they offered 11 or even 5 months ago.

 

[Guest107]

The offer lasts 45-days, the rate lasts a year.

How is it possible in the wild to avail of the offer within 45 days , from the minute she leaves the bank with the offer she has to have all contracts issued, checked , queried , reissued snags done, surveys , valuations, fixes, haggles signing of contracts and drawdown.

45 Days for all that I asks you ??

 

[Molly]

Molly and Hel_n, it seems to be your contention that misselling by an institution can only arise where misrepresentation arises out of a systematic institution-wide policy, rather than errors by individual staff. I don't think this is true in general, and I don't think small-print protects institutions from verbal errors staff may make

.

to honest I do agree with you that errors by individual staff can be construed as misselling, however I would imagine that unfortunately in this particular case the small print (which in this case is not actually small print, its loan offer conditions, very clearly laid out point by point) does protect the institute.

 

[Guest107]

an unfair contract (generally speaking here not about AIB) is an invalid contract

someone tell me how to complete the sale on a house or apartment in 45 days flat please .

 

[MugsGame]

Your valid point about 45 days perhaps being optimistic would make an interesting thread in LOS. Could you perhaps post it there and withdraw your other allegations?

 

[irishpancake]

2pack, your continued allegation of deliberate misselling seems groundless given the facts outlined by the OP.

The rate offer lasts 45-days, the offer to lend the principal lasts 6 months, the rate lasts a year from draw-down. This is standard. There is no money market AIB can borrow from now to fulfill fixed rates they offered 11 or even 5 months ago.

Well said Mugsgame, this is actually the point.

The Bank has to borrow the funds it offers to fixed-rate customers. Where would they go to get funds on which they can also make a margin, to which they are entitled?

I have had experience in the past, before low interest rates gave us all a false sense of security, where i had arranged a fixed-rate product, but before draw-down the rates went up. The Bank was good enough to ring me to advise me to draw-down the funds pretty quickly, to continue to avail of the rate offered initially.

This is in no way to let the Bank "Advisor" off the hook, or to be in any way an apologist for the Banks.

There was an onus on the OP also to investigate the T & C's, including the small print. She could not be unaware that there is a general trend towards higher rates.

 

[Brendan Burgess]

Let's clear up one point here first. If you have a complaint about the conduct of any financial institution, you go to the Financial Services Ombudsman and not to the Financial Regulator, IFSRA.

This case shows how difficult the job of the Ombudsman is - it seems that the views are evenly split as to whether the original poster was treated fairly or not.

I have seen a few letters offering a fixed rate, and they have all prominently stated that the rate is only applicable for a limited time and if drawdown takes place a lot later, then the fixed rates on the day of drawdown apply. They also tend to offer a facility whereby the customer can book the fixed rate if the purchase is delayed.

I would very much doubt that there has been deliberate mis selling in this case. If the letter of offer says it clearly on the face of the offer, then I don't think that there is much of a case. If it's buried in the small print and this contradicts what she has been told by the employee, then she has a good case to put before the Ombudsman.

Brendan