Key Post UB left many borrowers on interest-only; now want full repayments ; 4 options letter

Are they treating them not taking capital as if these people have gone into arrears (which is probably technically true but it was the banks error)

1. Availing of an interest free loan equal to the under-collected amount to be paid over time

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Even this option treats it as if the person went into arrears, even though its the bank that setup the direct debit figures and basically got it wrong

shigllgetcha

That is one of the options available, Option 2

We got one of these letters on the 4th of January. Our mortgage was supposed to switch to capital and interest after 1 year, in 2008. We contacted First Active when we noticed it hadn't switched and were told it was interest only for the entire term and that our statement of account for the year was proof in writing, as it stated these terms on it. Like others, there's only one person working in this house and we can't afford c&I repayments, never mind the additional amount on top to pay for the uncollected sum. It became obvious in 2008 that the unemployed person in the house wasn't going to get a job any time soon, if we'd known then we would have sold and made a profit- our house only went into NE in 2011. Honestly, that letter and the AWFUL way we've been treated since by UB has nearly destroyed us. Don't trust a word they say, the phone calls to the Mortgage Section are NOT recorded, they won't confirm anything in writing or in emails and they won't meet you face to face to discuss this.

ETS- They gave us until the 13th of February to sort out how the repayments would be made with them or the March payment would revert to C&I automatically (and I quote-) "and you can't afford that, so you'll go into arrears and that will affect your credit rating".

Mavis and others who have issues of their own should do their own threads as it becomes impossible not to get confused.

OP - something interesting I heard on RTE yesterday. Their was a customer of the UB who realised he should be paying more. He highlighted it to UB and then he took a case to the Financial ombudsman when UB wanted him to repay the 'arrear's. In his case the FO ordered that the customer not pay the arrears and that UB take the hit. In addition he ordered compensation.

I think that you and the other 1300 customers should forthwith object to paying any arrears, write a letter of complaint. Read the judgement of the case I've outlined (I only have what I heard). It should be along the lines that you cannot afford the arrears, it's their fault, they should take the hit, you've done nothing wrong. Go though the full complaint procedure in writing with UB and then go to the FO. You have nothing to lose by doing this.

Alternatively, while this is a hot topic, negotiate hard with UB to get what is best for you.

I also wish to point out that 'precedent' is not a term that the financial ombudsman understands. He takes each case on it's own merits. I find this riduculous but I'm aware that it works this way.

(Ironically enough last year I found out by accident the UB had overcharged me and I got a refund of a five figure sum from them).

Ok, I have now spoken to the ASV unit, its a little more complicated than i first taught.

The lads are shocked by the scale of the problem and are snowed under. The girl in the ASV, again like her college was most helpful but pointed out that the people dealing with the underpayments are unclear of how the 4 options work.

The ASV unit will only deal with and sort out restructuring of the original mortgage amount. The underpayment is not there concern.

I got the kinda feeling that i would be mad to agree to pay this from all my talks with the bank so far.

Could other in the same position maybe indicate what there plans are. I am going to have a chat with my solicitor later as i think he is affected also.

whyme- we submitted an SFS last Friday and with it gave a proposal that they write off at least the uncollected sum. We gave an outline of everything that had happened to date and our reasons for this- which include the amount of interest UB are losing with the offer of the interest free loan (in lost interest payments from us (although technically we have already paid that interest!) and interest for them to borrow that amount). I think people affected need to get in contact with each other. We couldn't have afforded to go the legal route with this but maybe if enough people got together the costs wouldn't be so much. We have already had an inbranch meeting with someone. We put a write off of the unclooected sum to them. They didn't seem surprised- it was weird, he just nodded when we said it...not the reaction we were expecting.

Sorry if this is a stupid question but what's the ASV unit?

Thanks redfreddy,

ASV = Arrears support unit

Sound very special but I'd same there all in the same room scratching there heads together.

redfreddy said:

I think people affected need to get in contact with each other. We couldn't have afforded to go the legal route with this but maybe if enough people got together the costs wouldn't be so much.

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I think it's an excellent idea that everybody get together and help each other. There should be no need for any costs. But help and support in writing letters to Ulster bank and from their to the Financial Ombudsman is a great idea.

It is just amazing how banks are year upon year making such basic errors that have hugh financial ramifications for people and they can just say it's a system error and that's allright Jack. And it's not just a financial impact, these things can really have an emotional impact as well.

Its a few weeks since I started this thread and have had alot of time to consider my position, there seems very little on AAM about this issue or other forums that i can find so this is what i was planning.

I am going to cancel my DD with the bank and continue to pay the interest on the loan as before until i can get time to consult with the central bank and the ombusman.

Do you guys think this is an acceptable course of action. What would the effect of doing this be?
Would it effect my credit rating?

according to the news paper article, the central bank already know of this problem, so it looks like they had to run it passed them already, so Im not sure what will happen when you contact the central bank.

whyme said:

I am going to cancel my DD with the bank and continue to pay the interest on the loan as before until i can get time to consult with the central bank and the ombusman.

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Have you spoken to UB and have they any better options for you?

Hi whyme, redfreddy & dinger,

Just wondering how this is all working out. We're in the same situation and are weighing up the options (only got the letter a few weeks ago, but at least we were expecting it). Currently waiting to hear back from UB to discuss details, but will probably have to call them instead. Of the available options now the interest-free loan seems the best but could be a big stretch - I want to check if that can be extended to equal the remainder of the loan term instead of just 10 years. Of course some reduction in the outstanding amount would help a lot!

No word back from Ulster Bank since submitting the SFS on Feb 21st. Dreading them coming back to us to be honest. We made a complaint about the way they handled things but received a response dealing with the error itself- standard thing about us not contacting them, when in fact we did! They say they have no record of our contacting them about the error, although they admitted they only went through records around the time it should have reverted, not before or after. Apparently it's up to us to prove we did. I pointed out it should be their responsibility since they have the records and it's their refusal to go through them that means they're denying we did! Nightmare.

We've received 3 mails since we brought the issue to their attention, all of them from the head of investigations saying they are reviewing the matter and will be in touch in due course. I would think there is a major internal investigation going on as it is beyond belief how inefficient they have been on the matter. God knows how many mortgages continued on interest only when they should have defaulted back to capital + interest.

Dealing with Ulster Bank in Edinburgh (very helpful) re. SFS for the past month. Got a call saying they forwarded the completed SFS to be evaluated and was returned with query- "Why are you making these arrangements? This mortgage is interest only for the entire term.' UlsterBank/RBS in Britain not aware of the error at all. This is the first they've heard of it.

I have not been on the site for a while and like to update you all on my particular situation.

Well, after all the flapping about by UB nothing happened in the end. To date i have remained on IO and they have not attempted to take C&I.

I even requested some months ago a letter stating what the repayments were and received a letter that i was on IO and that the mortgage was fully up to date and compliant. Go figure

whyme said:

Well, after all the flapping about by UB nothing happened in the end. To date i have remained on IO and they have not attempted to take C&I.

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Well this is excellent news Whyme and thanks for coming back to us, it's always nice to know what has happened.

Its been some time since I originally posted this, today I received a letter from UB pointing out that due to an error on their behalf i was not placed on C&I and they will from next month be collecting same.
What do other posters think of this and what advice would you give. I still cannot pay C&I as my situation has not changed from last year.
Thanks

You have a contract which obliges you to pay capital and interest.

You got away with interest only for a long time.

If you are unable to meet the terms of your contract, they would be well within their rights to deem your mortgage unsustainable and require you to sell it.

This is a holiday home. You can't now afford to make the repayments.

As you have your home loan with Ulster Bank, they will add the shortfall to your home loan.

Brendan