Ombudsman's comments on tracker mortgages

[Brendan Burgess]

The Ombudsman has issued h is Bi-annual review. It seems to be over two PDFs. The bits on tracker mortgages are on Page 34 of[broken link removed]

Tracker Mortgage Update
 Complaints regarding tracker mortgages have increased substantially in recent months. The number of complaints registered relating to tracker mortgages in 3rd & 4th Quarter of 2010 stands at 115 (up from 40 in the 1st & 2nd Quarter). It is anticipated that this trend will continue into 2011.
 We continue to liaise with the Central Bank of Ireland on this issue.
 The Central Bank of Ireland has stated in a letter to all Credit Institutions on the 19 August 2010 that they must inform customers of the impact of any switch from a tracker mortgage rate on all customer communications regarding such a switch.
 The Central Bank issued a Code of Conduct on Mortgage Arrears which sets out how mortgage lenders must treat borrowers in or facing mortgage arrears, with due regard to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits. This became effective on the 1st January 2011.
 The complaints, in general, relate to the changing from a Tracker Mortgage rate to another rate be it either a fixed or variable rate and the information provided to the Complainant at that time regarding the ability to change back to a tracker rate.
 In investigating these complaints, the Bureau, examines the information given to the consumer by the Provider regarding the change of rate and its implications on their mortgage and whether it was sufficient for the consumer to make an informed choice based on the information garnered.
 The cases frequently require an examination of the clarity contained in both the mortgage agreement and the Mortgage Form of Authorisation concerning the rate which the Complainant’s fixed rate would revert to upon expiry.

 

[joeysoap]

Brendan, were the lending institutions complelled to disclose the impact of switches prior to the letter issued from the central bank in 2010?

I ask as I was on a fixed rate with only some months remaining. I contacted the lender asking about options on my repayments as the variable rate had plunged. I was advised to immediately write a letter requesting a switch to SVR. I asked would there be ANY financial penalty and was assured there would not. I duly drafted same letter and referenced the fact that there was no penalty as per conversation.
However, I found subsequently that it was written into my mortgage agreement that on completion of the fixed term of the mortgage, I would revert to a tracker. My bad for not being aware of this, but this was never mentioned in my call to the lender to discuss options. I only discovered this subsequently while going through my mortgage agreement. Obviously had I known I would have remained on fixed for the remaining few months.
This was in early 2009. Do I have any recourse? There was no disclosure from the bank during the conversation on moving off fixed so I couldnt make an informed decision. I was also harried into requesting SVR quickly.

Thanks,
Joey