Put on buy to let mortgage incorrectly?

Hi all
I'm a regular user who has set up a new profile for help with a query. Hope that's ok.

My parents purchased a house in 2000. During the process the sale of their then existing house fell through. To prevent the sale of their new house falling through the mortgage advisor in PTSB suggested they take out a buy to let mortgage at 6.3% which they did. The original house subsequently sold a few months later and they moved into new house. It was never rented out. But they remained on the BTL mortgage.

As far as I'm aware my father didn't realise the mistake until approximately 2014 at which point he wrote to them and explained what had happened. They responded that the agreement he had signed was for a buy to let mortgage, that all should have been explained by his solicitor and if he had any grievance to contact them. He stopped paying the mortgage around 2017 at which point there was approx €10,000 outstanding. They have written to him a few times over the years, he replies that he was on the wrong rate and has in fact overpaid, they reply that he was on the rate he signed the contract for and it all just goes around in a circle.

He is now in his late 70s, is terminally ill and is attempting to get his affairs in order and I've just been filled in on all this now and handed a file of papers and asked to see what can be done.

Sorry for a long winded story but just trying to give as much information as possible. Can anyone advise if there is any course of action I could take to help him resolve it?

There were long periods of time, pre crash at least, when their SVR for both PDH and BTL were the same. The 'overcharge' is as much as a result of staying on SVR than it being a BTL rate.

What action did PTSB take when they were informed of the situation in 2014? Did the maybe it to a PDH rate from that point forward, and offer the MVR? Have they been fully following the MARP process?

I don't think he has any case here.

However, the only thing you can do is to go to the Financial Services Ombudsman and make a complaint.

Red - I don't think that this suitable for the MARP as it was a deliberate decision not to pay when he could pay. I don't know if the CCMA excludes such cases, but it certainly was not the intention of the MARP.

Brendan

Brendan Burgess said:

However, the only thing you can do is to go to the Financial Services Ombudsman and make a complaint.

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At first glance you might be out of time. There may be grounds for the FSPO to accept it's an uphill start.

Time Limits for Making Complaints to the FSPO​

Section 51 of the Financial Services and Pensions Ombudsman Act 2017 prescribes that any complaint about a "long-term financial service", can be made not only within a period of six years of the date of the conduct complained of, but also within a period of three years of a certain "date of knowledge" as prescribed within the Act. In addition, the Ombudsman has a statutory discretion, regarding such complaints, to extend the time if there are reasonable grounds for requiring a longer period and it would be just and equitable in all the circumstances to do so.

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Really sorry to hear about your Dad and this whole thing being dumped on you.

How much would it cost to payoff the mortgage, if there was €10K left to pay 4 years ago. Get an offer from the bank and negiotage (Dad terminal, wants to settle affairs). Pay it off and end of saga.

Your dad should be happy this chapter is closed. Of course he may be mad that he paid too high a mortgage all these years, but is it not better to have mortgage and interest and penalties and risk of sale & eviction gone from his life.

If he passes away tomorrow what is the best scenario, a mess with the bank or owning the house outright?

Hi Coyote

These are very difficult issues. But if he makes a complaint, the Ombudsman will hear it unless ptsb objects. The Ombudsman might still insist on hearing it.

There is nothing to lose by doing it. Except a bit of time and effort.

If the father has a terminal illness, he may get some satisfaction from pursuing it. And if he dies before it is sorted out, the Executor may just pull the complaint.

Brendan

Brendan Burgess said:

But if he makes a complaint, the Ombudsman will hear it unless ptsb objects.

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Hi Brendan. I have never taken a case to the FPSO that was outside these 3- and 6-year timelines above.

Maybe you have experience on this. But in general complaints bodies have a checklist they go through pretty thoroughly before they accept a complaint. And this looks like it is out of time.

I would also check as previously mentioned what were the relevent PDH rates v the BTL rates, there was a long time when they were exactly the same so if that were the case then it wouldn't have made any difference. Many people now are still on BTL rates that are even lower than PDH rates especially if tied to ECB.

That can then decide whether it is worth pursuing or not.

Brendan Burgess said:

Red - I don't think that this suitable for the MARP

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The bank must follow the process, and then formally notify the borrower they have been classified non-cooperating before excluding them from the process.

It's not s magic bullet, but another point to raise in getting it dealt with quickly.

He signed the contract knowing what he was doing. What he should have done was inform the bank that it was no longer a BTL once he sold the home and sorted out the situation then. It's not the banks fault he did nothing on this until 2014. I don't think the BTL mortgages have a clause that if it becomes your PPR you go on PPR rates. But those who take out current PPR mortgage generally have a clause that if you let the house out then you move to a BTL rate.

So I'm not seeing how taking any kind of case would work against the bank who did nothing at all wrong from 2000 o 2014 and I'd argue still haven't done anything wrong.

Back in 2000 would there have even been much of a difference in rates. One of my siblings has a BTL tracker and so pays less than many people with PPR's.

Sorry for the circumstances you are in but I do know this, banks hate people being terminally ill and will do everything to help you (ironically thanks to the likes of Joe Duffy). It is my experience dealing with them. So you can try and leverage a settlement using that.

On a different note, does any of this actually matter anymore. If necessary just tell you father you'll sort it and let him die happy with that knowledge even if you don't do anything or can't do anything.

Thanks everyone for the feedback, it's really helpful. My own preference is that he just settles it but he's as stubborn as a mule and hates feeling like he was taken for a fool. My main priority now is to ensure it is settled so my mother had security and also so that he can put it behind him and focus on his treatment. I'm going through the papers and it appears that the mortgage was passed on/sold to Start Mortgage's so I'm not sure whether that will complicate matters.

I'll chat with him further and see if I can convince him to settle it.