EBS What does an EBS "Variable Base Rate" mortgage mean?

I genuinely wonder how much of this is speculation versus fact. You are making some very bold statements that would require substantial cross industry/function experience. How much experience do you have in major (>50m) programme (either business or technology) deployments and rollout?

Hi @gnf_ireland,
It is my view based on facts.
Regarding my experience, I have over 20 years of Continuous Improvements, Bussines Development, Bussines Global Transformation, Bussines Improvements, Leadership, Employee Engagement & Development, Change & Challenged Management, Lean Implementation, Len6Sigma, Strategic Improvements Short & Long Term, Sustainability Programs, TQM covering all areas of an organization including and not only to H&Safety, Planning, PDP, Finance, Systems & Processes, Marketing, Supply Chain, Manufacturing, Mulifunctional Teams, Crossfunctional & Interdepartamental Strategy, We Vision, Technology, Sales, New Product or Services Development & Introduction, R & D, regardles the product or services they provide to customers. In a simple word I’m not CEO, just an L6S Black Belt, PMP, Prince, Theory of Constraints and many more qualification, working in management & improvement within the same Global Organization for over 20 years.
I dont know if this is relevant to this thread but to be honest the programs that I was involved, vary from 2M to 4.5M but overall was exceding the 50M.
I should Upload my CV, that was a joke.
I could talk about and we can share the experience for couple of days but definately not on this thread.
Is there any forum where we can challenged different improvements initiatives used by organization and the negative impact over the customers/consumers and what would be the best recomandation countermeasure with minimum impact to customer & beneficial to the Busines, win win solution.
I knew from the begining that you are an expert, not necesary in Banking sector.

Regards,
RR
 
Hi @gnf_ireland,
My point re the broker was simply that if the ebs were 'encouraging' brokers to push fixed rate - then that was my experience - my broker was recommending that I get a fixed rate and I had a loan offer for a fixed rate - however bi went back and i requested a tracker - he faxed them a request for a tracker on my behalf - the fax actually said ecb rate +1.05 %
what I then got was a loan offer with the words variable base rate ? I asked the broker last week why it said variable base rate and not ecb +xx% and he said 'he did not know'
 
RAzvan R said:
It is my view based on facts.
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So you worked on this project or know people who worked on it? I am being pedantic here, but facts are facts as you well know.
I can speculate on how a project like this would have been run within EBS based on experience, but I could not say a single one of my speculations are facts
RAzvan R said:
Regarding my experience, I have over 20 years of ..... working in management & improvement within the same Global Organization for over 20 years.
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So with that level of experience you will know that some programmes are run better than others, some succeed very well in their objectives and others less so. Some have objectives which are clearly called out and others 'wing it' so to speak.
What I am saying here is it makes no difference what the objectives of Project NOVA was, there is no guaranteed they were achieved or even any progress made towards them. But irrespective of this, unless there was a clear objective to defraud customers off trackers (which is very unlikely), then I am not sure why project NOVA is a discussion point other than to try explain the mindset within the organisation at the time.
The same could be said about the mindset of large blocks of the Irish population as well, and whether they were behaving rationally. I will add I was abroad for the majority of the Celtic Tiger years, but when I returned in late 2006 I felt the place had gone mad (not everyone but large blocks of people I encountered at the time)

Its one thing to say EBS was in turmoil at the time -its another thing to show that this turmoil means variable base rate = tracker!

RAzvan R said:
I knew from the begining that you are an expert, not necesary in Banking sector.
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I work in business transformation, aligned to technology including the move to digital for the last 20 or so years (never in Banking). Whether I am an expert or not depends on the person and the topic :) I would imagine a large portion of people on this site are successful in their careers
 
haveaniceday said:
what I then got was a loan offer with the words variable base rate ? I asked the broker last week why it said variable base rate and not ecb +xx% and he said 'he did not know'
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Did he follow up on this? Surely this was his job when you queried it? Did you ever get a proper answer to the query?

I have no idea to be honest, but you clearly asked the broker why the form did not say tracker and offset and I am guessing you never got an answer from them. Can I ask why you went ahead with the mortgage at this point? Curious into the mindset at the time more than anything else if I am being honest..

haveaniceday said:
My point re the broker was simply that if the ebs were 'encouraging' brokers to push fixed rate - then that was my experience - my broker was recommending that I get a fixed rate and I had a loan offer for a fixed rate - however bi went back and i requested a tracker - he faxed them a request for a tracker on my behalf - the fax actually said ecb rate +1.05 %
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Encouraging people to go on fixed is not a crime - BoI do the same thing today.
 
haveaniceday said:
Hi @gnf_ireland,
My point re the broker was simply that if the ebs were 'encouraging' brokers to push fixed rate - then that was my experience - my broker was recommending that I get a fixed rate and I had a loan offer for a fixed rate - however bi went back and i requested a tracker - he faxed them a request for a tracker on my behalf - the fax actually said ecb rate +1.05 %
what I then got was a loan offer with the words variable base rate ? I asked the broker last week why it said variable base rate and not ecb +xx% and he said 'he did not know'
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How many EBS appointed brokers will be thrown under the bus before EBS or the Central Bank realise that it isn’t the brokers who caused customers to think they would convert to a tracker at the end of fixed term?

It’s quite the coincidence that more than one EBS appointed broker thought the variable base rate was a tracker or gave customers EBS correspondence with definitions of the variable base rate confirming it to be a tracker..but yet this all the brokers fault.
 
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B26354 said:
How many EBS appointed brokers will be thrown under the bus before EBS or the Central Bank realise that it isn’t the brokers who caused customers to think they would convert to a tracker at the end of fixed term?

It’s quite the coincidence that more than one EBS appointed broker thought the variable base rate was a tracker or gave customers EBS correspondence with definitions of the variable base rate confirming it to be a tracker..but yet this all the brokers fault.
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171 plus intermediares branches.
 
B26354 said:
It’s quite the coincidence that more than one EBS appointed broker thought the variable base rate was a tracker
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Given everything that has happened, its not within the realms of possibility that the broker was more interested in their commission than the welfare of their clients?

Not one broker felt the need to ask EBS to change the wording on the offer to say tracker?
And not a single broker felt the need to say that a tracker should have an offset against ECB clearly written on the letter of offer?
Every broker in 2006-08 knew what a tracker was and that it was a defined offset to ECB, yet there was magically no reason to print this offset on the letter of offer?
What if the customer did not want a tracker to be the default ?


B26354 said:
gave customers EBS correspondence with definitions of the variable base rate confirming it to be a tracker..but yet this all the brokers fault.
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I will let the CB comment on those aspects....
 
gnf_ireland said:
Given everything that has happened, its not within the realms of possibility that the broker was more interested in their commission than the welfare of their clients?

Not one broker felt the need to ask EBS to change the wording on the offer to say tracker?
And not a single broker felt the need to say that a tracker should have an offset against ECB clearly written on the letter of offer?
Every broker in 2006-08 knew what a tracker was and that it was a defined offset to ECB, yet there was magically no reason to print this offset on the letter of offer?
What if the customer did not want a tracker to be the default ?



I will let the CB comment on those aspects....
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Create an ambiguous term for an interest rate & remove the interest rate basis for that term from the loan offer; then that rate can be whatever the bank or customer want it to be.
 
gnf_ireland said:
Given everything that has happened, its not within the realms of possibility that the broker was more interested in their commission than the welfare of their clients?

Not one broker felt the need to ask EBS to change the wording on the offer to say tracker?
And not a single broker felt the need to say that a tracker should have an offset against ECB clearly written on the letter of offer?
Every broker in 2006-08 knew what a tracker was and that it was a defined offset to ECB, yet there was magically no reason to print this offset on the letter of offer?
What if the customer did not want a tracker to be the default ?



I will let the CB comment on those aspects....
Click to expand...
The brokers informed the customers refering the repayments option comunicated with the Strategy to increase Sales from EBS central.
Best options on the market, Tracker with lower margins or lower Fix rate followed by Tracker.
The best option for rezidențial property.
If the customer was chosing the fix rate or tracker rate for brokers was the same thing - their comision was based on loan Value & Sales level per month not on type of interest rate selected by customer.
There was only fix rate follow by Tracker & Tracker rate available in EBS Home Loan Aplication that most of the people select as repayment option, how we end up with SVR?
Then, the magic happened, all fix rate customers they were transfered overnight to SVR “From now on, as from today and as per statetment” just like that.
Unfortunetly this is the reality some of us leave with for the last 10 years Gentelman.
How bad will affect CB or the economy a deficit greather than 1.6bn?
We will see in June.
 
gnf_ireland said:
Given everything that has happened, its not within the realms of possibility that the broker was more interested in their commission than the welfare of their clients?

Not one broker felt the need to ask EBS to change the wording on the offer to say tracker?
And not a single broker felt the need to say that a tracker should have an offset against ECB clearly written on the letter of offer?
Every broker in 2006-08 knew what a tracker was and that it was a defined offset to ECB, yet there was magically no reason to print this offset on the letter of offer?
What if the customer did not want a tracker to be the default ?



I will let the CB comment on those aspects....
Click to expand...
How can a broker ask EBS to change the wording when that wording was in the system and they were all trained the same Variable Base/Tracker - Level 1 trainning completed in 2005.
 
B26354 said:
Create an ambiguous term for an interest rate & remove the interest rate basis for that term from the loan offer
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Which one one feels the need to question whatsoever, including customers, brokers or whomever.

Honestly, how many customers do you think EBS would have lost in 2004-2008 if they had said on maturity the default rolling rate over onto 'variable rate' as opposed to 'variable base rate' in this period? They could also have said any customer can apply for any active rate available to new customers on that rollover date? I would be guessing very very few - as most people were not interested in rates and focused on buying houses !
As I said multiple times, trackers only became valuable with hindsight
 
RAzvan R said:
How can a broker ask EBS to change the wording when that wording was in the system and they were all trained the same Variable Base/Tracker - Level 1 trainning completed in 2005.
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Anyone can ask for a specific term to be included in the mortgage contract. My solicitor had it done in my home loan contract for something he was unhappy with.


*edit*
For the above conspiracy theories to make sense, EBS had to have known the margin between trackers and variable rates would grow substantially over the next few years and that customers would not be in a position to switch mortgage providers at the end of their fixed term. We have all acknowledged up to 2007 variable and tracker rates moved in unison.
So basically they had to foresee the extent of property crash and financial crash a number of years ahead and the fact that ECB rates would be near zero for close to a decade.
This makes no sense as if they foresaw it why would they have continued to hand out mortgages and in particular trackers at all.
I cannot see how EBS would purposely deploy a strategy that would destroy the company - years before it happened. I think you are giving them way too much credit.

And they decided this in 2004 when the property and mortgage markets were booming and new entrants entering the market.

Note if the crash came 2 years later, people who were not on trackers could have switched when they came off the fixed term, if they were unhappy with variable rates. We had active switcher market at the time. This is hardly good business.

I have asked before - anyone know anyone who fixed in early 2015 for 2 years and what they rolled onto in 2017. This might PROVE what variable base rate meant to the bank at that time.
*end edit*

RAzvan R said:
We will see in June.
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Yes, this is probably the best approach at this stage, I will bow out of the discussion (again) and good luck to you all with it. I really hope it works out for you
 
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rate only.PNG


this is what my broker emailed to me when I said I did not want to fix my mortgage in jan 2008 -
 
haveaniceday said:
just thinking a trawl of EBs broker websites on archive.org might throw up some info on the ebs rate terminology in use around 2007/2008 - anyone know of ebs broker websites worth a lookup?
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Lisney & mortgageireland.ie for a start but not sure you can access the rates or buyers info on those sites from that time anymore.(ive posted the definition from mortgagesireland.ie already). A number of brokers who provided definitions of the variable base rate or sold the variable base rate as a tracker rate have been mentioned on this forum alone. I’m sure more will be identified over the coming months.
 
For youre info i sent an email to Michael McGrath about this issue and also made him aware of the discussions on this website. I asked him could he question the CEO of EBS about this and he told me he would examine it which appears to me to mean if he sees an issue worthy of inclusion he will ask about it at the finance committee when as it turns out the CEO of AIB will be the one answering the questions. Hopefully we'll get to see him give Bernard O'Byrne a hard time about this and hopefully a few answers but i wont hold my breath too much.
 
tonymac said:
For youre info i sent an email to Michael McGrath about this issue and also made him aware of the discussions on this website. I asked him could he question the CEO of EBS about this and he told me he would examine it which appears to me to mean if he sees an issue worthy of inclusion he will ask about it at the finance committee when as it turns out the CEO of AIB will be the one answering the questions. Hopefully we'll get to see him give Bernard O'Byrne a hard time about this and hopefully a few answers but i wont hold my breath too much.
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Fair play Tonymac.

If Michael McGrath, Pearse Doherty, John McGuinness (or any other politician who attends the finance committee meetings) looks at this thread, can they please ask Bernard O Byrne the following:

Between 2004 and mid 2008 did EBS appointed brokers give customers with fixed term to “variable base(currently 5.25%)” rate mortgages, correspondence that defined this rate as “After x years(of fixed term) a variable rate which is 1.25% above ECB Base Rate currently 4.00% for the remaining term of the loan, to give a current rate payable of 5.25%.”

If Bernard O Byrne confirms that customers with this variable base mortgage did indeed receive this type of EBS sourced correspondence from their broker, can they then ask him why are the same customers now paying a “standard variable rate” mortgage and not the “variable base” rate mortgage contained in their loan offer and described in above definition?
 
also
https://www.irishtimes.com/business/ebs-announces-lowest-variable-rate-in-market-1.1134199
especially this bit is good -
Announcing the new standard variable and tracker mortgage rates, EBS chief executive Mr Ted McGovern said the new rates would be available to all customers.

He said the EBS had decided to abandon the industry practice of offering lower initial mortgage rates to new business.

"New mortgage discounts and the practice of barring existing customers from availing of tracker mortgages has, we believe, caused resentment among people," he said.
 
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