if we believe that the increase or reduction is necessary to maintain the viability of our business following a serious adverse change in market conditions or in the relationship between the base rate and the rate which we pay on the funds we raise for use in our mortgage lending business;
I'm kind of having doubts about my LPT method of payment which has been set to come out of my Danske account as a single debit authority next March. It's not outside the realms of possibility that the Financial Regulator would accept the figures taken for LPT from Danske accounts as valuations for the purposes of calculating LTV ratios and leave it to the homeowner to prove otherwise.
If memory serves me correctly, I believe there was a condition on Danske tracker mortgages that allowed holders to carry out a re-valuation of property to move to lower LTV's. However, I don't think the bank anticipated the falls we've had and, therefore, there was no such condition that allowed the bank to initiate a re-valuation.
With this in mind, it's probably really difficult for the bank to enforce the condition regarding the LTV increasing beyond 80% as they'd have a tough time proving it. They can't simply use your purchase price together with the house price index falls over the years because you could counter-argue that you've done many home improvements in over the years.
With this in mind, what are the chances that a company that purchases the loan book from Danske will enforce the conditions that Danske hasn't enforced already, probably due to the potential media backlash.
Danske have said they are not selling their loan book, but of course that does not mean they won’t do a u turn on that tomorrow, however in this case it might make sense to keep it themselves as they are maintaining a presence here for business customers, existing loan repayments could be collected by this arm, or Danske up north who already look after a lot of the administration on southern accounts, the losses would probably be far less that way than having to sell their loan book at a massive discount because of the large amount of low trackers it holds.
Danske’s T&c’s for LTV Trackers does clearly state that they reserve the right to convert the loan to standard variable if at any time the LTV goes above 80%, admittedly it does not say how they would determine LTV at any time. I think the possibility of this clause been enforced cannot be ruled out particularly now as you say they will no longer be concerned about good will or media backlash. Danske now have very little to lose and an awful lot to gain with this approach.
We have seen how Danske operate, If they decide to go this route and let’s hope they don’t, It will not be the slightly above or arguable cases they will look at, many of their low trackers must have LTV’s of over 100%, some way more. They will not ask permission, the first these customers might hear about it is a letter saying they have implemented this change in line with the T&c’s and your new repayment is €XXX, you have no option but to pay while you follow the complaints procedure to the Ombudsman or the courts, when you get there I wouldn’t be sure that many of these customers would be successful as unarguably LTV’s in many cases are way higher than they should be to avail of the low tracker rates.
Same applies to PPR’s on low trackers that are rented, just because they might have chosen not to notice in the past doesn’t necessarily mean the will continue to not notice.
.....and they might well attempt to force the LTV Clauses in the contracts on some/ most customers. (That could get very messy for them if thats the course they take).
Hello Mr. Earl,Why both yourself and others here are thinking along these lines is beyond me .... .
they would be dragged through every Court in the land and probably to the EU thereafter if they even tried..
Danske want out, expect them to try and sell the residential loan book in a job lot at some future point and nothing else, is my view.
The T&c’s for these low trackers clearly allow for this change should the LTV go above a certain point at any stage.
It most certainly isn't the case that the T&C "clearly allow"......
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