EBS / First American redeemed mortgage late and we were charged breakage fee

We decided to switch mortgage providers in Feb of this year. Moving from 5 yr fixed rate to variable as we felt rates would continue to come down. Requested redemption letter and fees from Permanent TSB and there was no breakage fee.

First American were the solicitors acting for new provider EBS in this quick switch mortgage. There were delays and a 2nd redemption letter was requested. Again no breakage fee. We pointed out all along that the no breakage fee was crucial, as we couldn't afford to switch if a fee came into force.

I asked EBS how long was left to redeem the PermTSB mortgage and they emailed me back, saying that First American had said valid until 30th April. We redeemed on 21st of April and then discovered that letter had only been valid until 19th April and that a breakage fee was now applicable. Breakage fee is approx €3,200. So the 2 mortgage payments that went out whilst this process was underway were kept + the mortgage figure + 10 days daily accrual that First American sent along with mortgage figure + we still owe over €200.

It is being investigated, but there are no encouraging noises coming out of EBS (remember we have in writing that 2nd redemption letter valid until 30th April) nor First American. First Am say that standard procedure is to send on extra days of daily accrual and that covers it - that this is the first time this has happened and trying to blame PermTSB.

No-one is taking responsibility for this. I am down a big chunk of money which is pushing me way into my overdraft - I am struggling with other bills while everyone shrugs their shoulders and says we are looking into it.

Any advice on next steps greatly appreciated.

Written letter of complaint to EBS and if you are not satisfied with the outcome:

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"So the 2 mortgage payments that went out whilst this process was underway were kept + the mortgage figure + 10 days daily accrual that First American sent along with mortgage figure + we still owe over €200."


But there does not appear to have been a breakage fee? If I'm reading it right while the process was ongoing, you continued to incur your (then) lenders monthly payments? Until their loan was redeemed, they were entitled to their monthy repayments.

Am I missing something? If there was no fee to break out of the fixed rate then all you should have to pay is the outstanding mortgage plus accrued interest.

mf

Those 2 monthly payments should have reduced the capital sum we owed PTSB. And in the normal course of events we would have had the surplus returned to us after the mortgage redemption had cleared.

We also have it confirmed in writing that we were charged a breakage fee of €3,200.

So, is your argument that had EBS not, mistakenly, told you that there was no breakage fee if you redeemed before 30th April, that you would not have gone ahead and not have taken out the new mortgage?

Why did you not check the redemption terms? Is this the quick switch thing where you don't need a solicitor but, equally, if it all goes horribly wong, that you've waived any form of legal indemnity for negligence ( if proven) against First American?

mf

mf1 said:

So, is your argument that had EBS not, mistakenly, told you that there was no breakage fee if you redeemed before 30th April, that you would not have gone ahead and not have taken out the new mortgage?

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Yes. They have that in writing from me.

mf1 said:

Why did you not check the redemption terms?

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I did, I was pushing First Am to redeem by the date, as they requested the 2nd letter they had the dates. So I asked EBS how long is the letter valid for. It was valid until 19th April, however EBS told us that it was valid until 30th April.

mf1 said:

Is this the quick switch thing where you don't need a solicitor but, equally, if it all goes horribly wong, that you've waived any form of legal indemnity for negligence ( if proven) against First American?

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No, it isn't. No waivers of legal indemnity were signed.

Well then try what NorfBank said but I think you'll find that the parties involved don't actually act for you ( but rather facilitate you) and, therefore, have no responsiblity to you when something like this happens.

mf

We were at no point aware of the Breakage Fee, nor did we authorise it. And if someone is providing a professional service, I think you will find that they have a duty of care to provide service to a satisfactory level. Shrugging their shoulders and telling us that "this hasn't happened before" is not sufficient.

Tinytina said:

Those 2 monthly payments should have reduced the capital sum we owed PTSB.

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This is not necessarily true, especially if it is early in your mortgage and most of the payment is interest. Could you give a breakdown of all the figures such as your mortgage amount, balance remaining, the interest part, capital part etc?

I think you should take MF1's points on board, what I'm understanding is that First American are acting for EBS as a type of insurance on the legal title and have no duty to you as they are not actually your solicitors. This is a new system in Ireland which makes switching institutions cheaper but may not be in the interest of the switcher (you in this case) as you do not have legal representation working in your interest and this only comes to the fore when everything goes wrong. (MF1 can correct me on this if necessary).

"I think you should take MF1's points on board, what I'm understanding is that First American are acting for EBS as a type of insurance on the legal title and have no duty to you as they are not actually your solicitors. This is a new system in Ireland which makes switching institutions cheaper but may not be in the interest of the switcher (you in this case) as you do not have legal representation working in your interest and this only comes to the fore when everything goes wrong. (MF1 can correct me on this if necessary)."

I don't do First American work so I'm not an expert by any means. But my understanding is that your own solicitor is paid €X simply to explain the forms but crucially does not deal with the overall transaction. Any dealings I have had with FA have been brusque and business like with little or no interest in what many posters on this board would regard as the minutiae of work that, frankly m'dear, a monkey could do.

mf

So OP has her own solicitor as well? I didn't realise that.

The OP won't have her own solicitor advising her on the conveyance. First American use a local solicitor for convenience as their closing centre where the client can sign the forms. As mf said the solicitor just explains the forms to the client. I doubt if they can be held liable for any issues arising.