KBC KBC basing cohorts on Application date rather than Draw-down dates

[gnf_ireland]

I'm really just after a reason as to why SVR wasn't used but word prevailing was used. There is a reason but no one will explain it or can explain it.

Because no one can tell what products will be available in the future and they were basically offering the commerical products available at that point in time.

No different to in 2013, there was no such thing as a LTV mortgage - they are the standard mortages offered now. Things like offset mortgages came and went - lots of reasons why SVR would not be used to defined something in the future.

In my rollover conditions on my 10 year fixed with KBC, it states I will roll over onto the New Business Rates applicable to my LTV. Chances are in 10 years there will be other criteria included in the determination of the mortgage rates, so who knows what will happen.

The bank surely knows why this was used in contracts.

I am not as convinced. The legal teams write contracts and they are not fool proof. If they were, we would not be having these conversations
Can I ask did you ask them explicitly at the time whether you would roll over to a tracker or not?

 

[unfortunate]

I can't honestly remember. I'm not really expecting anything but when I have asked questions and looked for things they have fobbed and bluffed something terrible ans have done a couple of suspect and very unprofessional things. I won't say what at the moment as I'm holding it in reserve but its just really a snap shot of how thick the banks must think we are. Now maybe we are when you look at contracts and stuff and how no one read them or understood them but how many ordinary folk who don't deal with them do??

 

[PJDCol]

What does your contract say?

It is likely that it says "Fixed rate rolling onto SVR"

Despite that, the Central Bank has persuaded KBC to give trackers to people because a flyer had been sent to brokers saying that that those who fixed would roll onto trackers.

No one appears to have been asked if they checked their contract.
No one appears to have asked KBC to correct their contract to point out that they should be rolling onto trackers.
No one got an email from KBC or their broker pointing out that they would be rolling onto trackers.

Brendan

Hi Brendan, I have a signed letter from a broker stating that a tracker rate will be available if they decide to fix from the drawdown. This is before the flier dates.

 

[PJDCol]

But as highlighted before, which is a good point, it doesn't state what the tracker details will in terms of % etc.

 

[Johnc6]

No it was not superseded by the SVR. The SVR is just an instance of the variable rate defined in the booklet.
This is no different to LTV rate, MVR (Managed Variable Rate) or any other marketting term used to define the current variable rate offered to customers. SVR does not supercede variable rate - it is a variable rate

SVR, LTR or MVR are not mentioned in the IIB Booklet and there are differences between all three of the products you mention in terms of rate being charged to customers depending on circumstance. Only Fixed, Variable or Tracker are referenced in the booklet. It was KBC themselves who discussed and referenced the booklet during the finance committee meeting. They also stated that where there was/is confusion or ambiguity with the contract/booklet they would tend to favour the customer.

 

[Sanparom]

The simple answer here is there is no simple answer. You will need to trawl through the various discussions on it to find out the various tranches effected by each bank - and they are all different. You can normally find the numbers effected as well by each traunch.

For example, some customers had "for the lifetime of their mortgage" stated in their home loan agreement
Others were forced off their trackers when they had to restructure or go interest only for a period of time
Some BOI staff members were issued an internal memo
Some where issued letters which the banks now claim are in error
Lots of different reasons - only 625 (I think) are impacted by the KBC flyer reason.



If your contract clearly stated you were entitled to a tracker at the end of the fixed period, or you were entitled to a tracker mortgage for the lifetime of the homeloan, then this is a very valid reason to be included. I would be amazed if anyone with that text is not included at this stage, given the large push from the central bank


There are large discussions within sets of customers within certain banks around what the prevailing variable rate, but most of these that apply relate to banks which did not have a variable rate at the time and were selling trackers only. There is a case (however light) that they had reason to believe that the prevailing variable rate was a tracker as the bank offered no other variable based mortgage at the time.
For a bank which offered both variable rate mortgages and tracker mortgages, you may have difficulty in convincing KBC or the FSO that you understood that "prevailing variable rate" meant tracker rate, and it was their fault that is what you understood it to be. However, if you have correspondence to this effect with KBC it may change the balance in your favour

Simple short answer to your question is - lots of reasons people are impacted, different between each of the banks and you cannot assume what applies to one bank applies to another. Suggest you go through all the KBC related threads to see if there is anything that resonates with you personally. Good luck

Thanks gnf for all the info. Much appreciated.

 

[Daisy duke]

But as highlighted before, which is a good point, it doesn't state what the tracker details will in terms of % etc.

And I think this is the big problem with all of this, it is all unclear.
The famous flier in itself is unclear, the flier states all fixed rates on expiry will roll to the tracker rates, it doesn’t state all applications as of the date of the flier will roll to the tracker rates. The banks have left gaping holes everywhere and have got away with it

 

[peemac]

@peemac I am asking u this question is a variable rate that moves in line with the ECB rate a SVR rate or a tracker variable. The rate was in line with ecb .25....

I've had mortgages since 1988 - both here and UK and the variable rate always moved with changes in the Central Bank of Ireland rate / Bank of England rate and since the ecb took over the ECB rate.

Only when markets priced different banks differently according to risk did the cost of funds vary considerably from the ECB rate and that meant variable rates became detached from the ecb rate. When the markets calmed down, the banks decided that the high variable rates were a godsend and as many houses were in negative equity, they had a lot of control - that's a separate scandal.

So yes, up til 2009 variable rates effectively tracked the various central banks rates and rose/fell in line with changes in that rate. Also from 2004-2008 there would have been a fairly small difference between a tracker and a standard variable rate - possibly no more than .5%.

 

[gnf_ireland]

Now maybe we are when you look at contracts and stuff and how no one read them or understood them but how many ordinary folk who don't deal with them do??

And this is why you pay a solicitor to review the contract for you as well. I wonder what roles the solicitors have in this area
The problem we all have is the legal contract is written by the bank and therefore written in their favour. If I was writing a mortgage contract, I would have very different terms and conditions on it. That said, they are the ones providing the funds so they can expect to be the ones writing the legal documents. Sadly the onus is on the customer to understand it or hire someone to review it with them to ensure they understand it.

And yes, my personal experience with KBC and dealing with complaints has not been very positive.

Something to keep in mind is that in May 2018, GDPR kicks in and this is an EU wide requirement to support full subject access requests (SAR). People in difficult situations should consider making a formal SAR to their banks at this stage and see if they can find any supporting material for their case.

 

[gnf_ireland]

I have a signed letter from a broker stating that a tracker rate will be available if they decide to fix from the drawdown. This is before the flier dates.

Interesting - what does the broker or bank say about this letter? This does put you in a slightly different scenario as you queried the contact and got feedback from someone. If the broker did this without talking to KBC then its a different matter !

 

[gnf_ireland]

SVR, LTR or MVR are not mentioned in the IIB Booklet and there are differences between all three of the products you mention in terms of rate being charged to customers depending on circumstance. Only Fixed, Variable or Tracker are referenced in the booklet. It was KBC themselves who discussed and referenced the booklet during the finance committee meeting. They also stated that where there was/is confusion or ambiguity with the contract/booklet they would tend to favour the customer.

Fair enough - now I suggest you work out how you translate this into something that works for you. I cannot offer any suggestions as I don't see the case - but then again others such as P Kissane may be able to see it, as they are much closer to the detail. Good luck in your attempts to make it work for you !

Just remember what is said at the Finance Committe is 10 years after the event, by people who were likely not to be involved at the time, under pressure from politicians to answer on the spot !

 

[gnf_ireland]

The famous flier in itself is unclear, the flier states all fixed rates on expiry will roll to the tracker rates, it doesn’t state all applications as of the date of the flier will roll to the tracker rates

Yes a lot of the rules are being written after the fact, and no doubt with the benefit of hindsight.
I also wonder how many customers were genuinely aware of the flyer when they made the mortgage application, and are using this retrospectively to their advantage. Reading through a lot of the conversations on here over the last while, a lot of customers appear to be retrospectively reading their mortgage contracts to find something which may work in their favour. Not that I blame anyone for doing this of course, but do think it works both ways

The harsh reality on all of this is most people, like today, were not interested in rates or anything else, but focused on how much money they could borrow to buy the house. With 100% mortgages and the likes, it was all about getting the maximum amount of money for a lot of people rather than the interest rate they paid. There was not much difference between variable and tracker rates back then.
If you ask people getting mortgages today, what they focus on - the same answer probably still exists. Who will give me the money I need to buy the house rather than the rate they are being asked to pay. 0.1% between two banks is not material enough for a lot of people !

Not that I blame any customer on this, its just hard to be on the fringes and not getting the 'lift' they hoped for. So near and yet so far - but they are right to fight their case as best they can !

 

[unfortunate]

Just got this reply from central bank on prevailing rate explanation: "In relation to prevailing rate issues in general, the Tracker Examination has identified that wording of customers’ mortgage contracts i.e. the terms and conditions attached to their mortgages, vary widely both within and between lenders. Given the variance in the contractual terms identified, not all cases may be treated the same for the purposes of the Examination in respect of determining affected customers for the purposes of redress and compensation.

Yours sincerely"

Bit of a cop out in my opinion. It would be easier if they just said no go away, but they seem to be leaving it to lenders to deal.

 

[Daisy duke]

Yes a lot of the rules are being written after the fact, and no doubt with the benefit of hindsight.
I also wonder how many customers were genuinely aware of the flyer when they made the mortgage application, and are using this retrospectively to their advantage. Reading through a lot of the conversations on here over the last while, a lot of customers appear to be retrospectively reading their mortgage contracts to find something which may work in their favour. Not that I blame anyone for doing this of course, but do think it works both ways

The harsh reality on all of this is most people, like today, were not interested in rates or anything else, but focused on how much money they could borrow to buy the house. With 100% mortgages and the likes, it was all about getting the maximum amount of money for a lot of people rather than the interest rate they paid. There was not much difference between variable and tracker rates back then.
If you ask people getting mortgages today, what they focus on - the same answer probably still exists. Who will give me the money I need to buy the house rather than the rate they are being asked to pay. 0.1% between two banks is not material enough for a lot of people !

Not that I blame any customer on this, its just hard to be on the fringes and not getting the 'lift' they hoped for. So near and yet so far - but they are right to fight their case as best they can !

Even though I don’t like what you have to say, it’s also hard to find arguments with your comments. Are you a barrister by any chance?

 

[gnf_ireland]

@Daisy duke no not a barrister at all. I am a ‘boring’ self employed IT consultant. That said I do have what is called a ‘logical’ mind

I am not in any way telling people not to fight their case. I am simply saying it will be a fight and the arguments need to be solid. A lot of what I read on this is very ‘circumstancial’ and hopefully the wording works in the persons favour. You all need to put a case together for why it should be in your favour.
The dates are key in your case - esp letter of offer date and signature date rather than application date and drawdown date !

 

[gnf_ireland]

@unfortunate I have to agree it’s a bit of a cop out, but also see their point. The term itself cannot be taken outside the context of what is around it in the home loan agreement document.

At least this leaves it open to you to continue your fight, if you choose to, as opposed to closing the door on it

Can I ask what has Padraig Kissane said on this recently ? Esp after the latest round of finance committee meetings ?

 

[unfortunate]

I don't know and haven't heard. I contacted his office and the girl there said to send in file and po for 184 euro and they'd go through it. I think its so open and would pull in so many people banks would implode

 

[gnf_ireland]

I think its so open and would pull in so many people banks would implode

I think the large blocks of people being impacted by generic reasons are probably coming to an end on this. The banks and CB have clearly been in discussion on this, and its likely they will agree that 'sufficient' progress has been made. You are now talking about fringe cases around the edges and how you can make a particular judgement apply to you.

Padraig has gone great work on this and can probably advise better than anyone on whether you have a potential case. It may be money well spent if it gives you some sort of definitive answer - either positive or negative. Worst case, I imagine he will help with any complaint raised and guide it somewhat.

 

[unfortunate]

Probably right. Just waiting on last few bits of info and queries to be answered by KBC.

 

[mccoypat94]

Met a financial advisor today , advised me send in a letter and go to ombudsman but believes I'm wasting my time and wouldn't take money from me to fight on.
Said he central bank have more or less drawn a line and if you are not deemed impacted at this stage it's tough luck .. he maintains cannot prove that the flyer had an impact in fixing that its all hearsay