Bank of Ireland tracker mortgage % increase

Thrugelmir

kanimisso99 wrote: »

So they have become even worse since then?

Why worse. Life doesn't stop then restart again. You have to deal with what's in front of you.

Thrugelmir

plimsolls_on wrote: »

strange question, I have been open about my issues with BofI but have a particular problem being a BofI prisoner because I am insolvent, though have not missed a payment in 14 years and wish to keep it that way....

May sound strange. However those that use the word "judgemental" tend to have issues outside that of direct relevance to mortgages.

rckl88

Thrugelmir wrote: »

So who pays for operating these accounts? The ATM's, the branches, the cost of cheque books and debit cards, the staff...........

We do...

They make an obscene amount of money (difference between saver and borrower rate) per account plus the fees and fines charged on many services they create. Multiplied this by the number of people with various accounts... I believe the scale is vast enough to finance their operation several times over!
Unless they milked the bank dry and/or made one bad call too many and lost it all.

l Made a Miscalculation once with an RBS account and Was short by a few pounds (double digits) they rejected (ie not pay) a direct debit for a mortgage payment AND charged me 25 quid!! I'll understand if they paid it thereby making me overdrawn but they didn't! Mortgage company charged me 35 even though I called them up to pay a couple of days after event.

Do you have credit cards? You'll notice interest charges are probably between 11 and 20%...

I'm sure you heard lloyds set aside 6.8BILLION just for PPI ? You must have known banks are making an absolute fortune from every single person?

kingstreet

It might be a good idea for a study of wholesale funding and securitisation. The idea of lending being financed by retail deposits was largely abandoned in the 2000s, until the crash.

Not only does a lender have to renew its funding for particular lending on a regular basis because its rate-swaps expire, it may also have securitised such lending. This means it has sold the mortgages as a package for a particular period of time. When this period ends, it must buy back the security from the investor.

For example, I have a mortgage book of £1 billion. I package all those mortgages up and offer them as a security at BoE + 1% for example. I sell the RMBS to another party and have to pay them that rate for the period I agree with them, say five years.

They give me the £1 billion which I use to fund another tranche of mortgages. After a set period, I must buy back the security from the holder for the face value.

The idea was that this would be a perpetual-motion machine of lending - selling - lending - selling. However, when US lenders stared to mix top-quality AAA-rated lending with lower quality "adverse credit" or "sub-prime" lending, they sweetened these deals with credit default swaps, or CDSs, insurance against the RMBS going bad.

Sadly, the CDS were never backed by collateral like most insurance contracts. They were issued and backed only by the reputation and AAA rating of the likes of AIG. When that rating was lost in September 2008 when the extent of sub-prime lending in the US was revealed, AIG was then required to come up with $ billions of collateral, to cover its potential payouts. Banks stopped buying from and lending to each other, because they didn't trust what the securities used as collateral actually contained.

Move on five years and the RMBS market is practically dead, with no institution willing to buy such products for fear of what is in them and the original issuers needing capital to repurchase them. This is what the likes of UKAR is doing - providing a home for these unwanted securities owned by the likes of NRAM.

hightable

kingstreet wrote: »

It might be a good idea for a study of wholesale funding and securitisation. The idea of lending being financed by retail deposits was largely abandoned in the 2000s, until the crash.

Not only does a lender have to renew its funding for particular lending on a regular basis because its rate-swaps expire, it may also have securitised such lending. This means it has sold the mortgages as a package for a particular period of time. When this period ends, it must buy back the security from the investor.

For example, I have a mortgage book of £1 billion. I package all those mortgages up and offer them as a security at BoE + 1% for example. I sell the RMBS to another party and have to pay them that rate for the period I agree with them, say five years.

They give me the £1 billion which I use to fund another tranche of mortgages. After a set period, I must buy back the security from the holder for the face value.

The idea was that this would be a perpetual-motion machine of lending - selling - lending - selling. However, when US lenders stared to mix top-quality AAA-rated lending with lower quality "adverse credit" or "sub-prime" lending, they sweetened these deals with credit default swaps, or CDSs, insurance against the RMBS going bad.

Sadly, the CDS were never backed by collateral like most insurance contracts. They were issued and backed only by the reputation and AAA rating of the likes of AIG. When that rating was lost in September 2008 when the extent of sub-prime lending in the US was revealed, AIG was then required to come up with $ billions of collateral, to cover its potential payouts. Banks stopped buying from and lending to each other, because they didn't trust what the securities used as collateral actually contained.

Move on five years and the RMBS market is practically dead, with no institution willing to buy such products for fear of what is in them and the original issuers needing capital to repurchase them. This is what the likes of UKAR is doing - providing a home for these unwanted securities owned by the likes of NRAM.

Thank you for this. Why do we need to sell the package it gives you 1%? To lend more can one not use the money that is paid back, a form of recycling. It seems that the instruments simply add costs and layers. Capital needs to be invested. I get the idea that the markets are just inefficient or broken by factors beyond capitalism.

ILW

Thrugelmir wrote: »

hightable wrote: »

Borrow from whom at BR?

I never said that, seems to be a quote glitch.

kingstreet

The rate shown is just an example.

The point I'm making is whatever they could get for a RMBS before 2008 is totally different to what they'd get now, but these things still have to be repurchased.

It's a bit like a borrower having to refinance an interest-only mortgage at the end of the term with a crap credit history and less income than they had at the outset.

If i don't have the money to repay the mortgage, I have to borrow it again and the rate and other terms will be a lot less favourable. We're all having to pay for that.

If banks had stuck to securitising only low LTV AAA-rated mortgages, which is the way the market started in the 1980s, this would not have happened as they could have relied on the quality of the "product" not being undermined.

Dave1968_3

My grounds for compliant to the the bank of Ireland and ombudsman. Please feel free to use also if the same facts relate to you.....

1) I purchased a "base rate tracker" by the bank of Ireland. It is reasonable to comprehend that this product by its very name indicates it will "track" the "base rate" I was clearly told when I took the mortgage out several years ago that I would never pay more than a "fixed" % rate above the Bank of England base rate.

2) I was not made aware that the "differential" part of this product could ever change mid term of contract. I was told it was a "fixed" rate above base rate that would "track" the "base rate" for the term of the contract.

3) The increasing of this "differential" above base rate from 1.1% to 3.39% amounts to an increase of 300% which, at a time when interest rates have remained unchanged, is clearly disproportionate, unjustified and not what Bank of Ireland led me to believe their "base rate tracker" mortgage consisted of when I was sold this mortgage.

4) The right to change a "for the life of the mortgage" mid contract is fundamentally misleading. It appears that this clause in there contract was hidden away an the T and C and not advertised. The Bank of Ireland contract has too wide a scope to rely on contractual power for its own profiteering or shortcomings.

5) The reasons Bank of Ireland give for this change are not valid. Any issues the Bank of Ireland has with its capital reserves etc are clearly of its own making or mis-forecasting and should have been planned for at the time they made this contract with me. Bank of Ireland has clearly stated they are not in financial trouble and senior staff are to receive 7 million euros in bonuses. (Google Bank of Ireland bonuses)

6) This undermines confidence in the Bank of Ireland products and the market of financial products generally.

The Bank of Ireland should be made to Honor the "base rate tracker" that was marketed and that I was reasonably understood to have been sold.
Please DM me if you have been affected and we can pool resources. In the first instance make a complaint to the bank of Ireland, then the Ombudsman. (It costs the Bank £750 for every complaint made to the ombudsman)

Even if you have not got one of these type mortgages from this bank- I would read your terms and conditions very carefully- This is the thin end of the wedge and other bank will be watching very carefully.

I am also been posting on twitter about this but i don't want to add my twitter name here- I was once band for self promotion on here- Moderator- can i add my twitter name? (it it my biz name)

Thanks,

Dave

Pobinr

markkw wrote: »

I, too, am affected by this bombshell increase.

I have Googled: Office Of Fair Trading What Is Unfair, and am encouraged that the Bank will fail because they have not acted in 'good faith' and the 'plain language' requirement has not been fulfilled.

The document that the Bank seems to rely on is the Residential Mortgage Conditions that is referred to in the Offer Of Loan. I have the Offer Of Loan, but I do not have a copy of the Residential Mortgage Conditions, so I am having to check whether my solicitor, from 2003, has it in their files.

I phoned the Bank of Ireland today and they have promised to send me a copy within 5 days. I have to wonder why it is not published on their website?

I will make a written complaint to the bank, to the FSA and to my MP.

As soon as the Bank takes the extra interest I will issue Small Claim and force them to Court.

Mark

I have two 2001 BTL B&W base rate tracker mortgages now with BOI. Not yet received the dreaded letter from BOI.
We took out out a further advance on one in 2008.
The 2007 conditions booklet for that advance (6n) says - 'We may reduce a positive differential or increase a negative differential at our discretion by giving you not less than 7 days written notice. This means we can change the differential in a way that is favourable to you'
(6j) states 'Unless we change the differential (if any) under condition (6n) we will not change the tracker rate unless the base rate changes'
In other words its tracking base rate.
Condition 25 says 'Changes to these conditions. We may change any of these conditions at any time by giving you not less than 30 days notice in writing as long as the change is favourable to you'.
So if this booklet applies to our original mortgage advances then we are OK. But guess what we cannot find a booklet for the original advances in 2001.
It would seem from other forums neither can anyone else!
People have even asked their solicitors for the document to no avail.
So it would seem BOI are trying to move the goal posts on justification of a
mortgage terms & conditions document that no one was given!
Has anyone been able to find this document namely Mortgage terms & conditions for their pre 2004 B&W tracker mortgage ?

If they have been transparent & open as is required of them, then how come no one was aware of this possibility of a hike in the differential ?
After all who would knowingly take a out a tracker mortgage that one day would in effect become a non tracker?
A tracker mortgage does not have two variables. It only has one variable namely the bank of England base rate.
If they try to increase the differential from 1.75% to 4.5% then it's surely another case of miss selling.
Because clearly it's wasn't what it said on the can which is 'base rate tracker mortgage' when BOI are now trying to make them infinitely variable mortgages!

Darrell_G

Totally with you Dave. Ive been posting quite a bit on this issue on PROPERTY118.com we've all got to stick together on this.

Dave1968 wrote: »

My grounds for compliant to the the bank of Ireland and ombudsman. Please feel free to use also if the same facts relate to you.....

1) I purchased a "base rate tracker" by the bank of Ireland. It is reasonable to comprehend that this product by its very name indicates it will "track" the "base rate" I was clearly told when I took the mortgage out several years ago that I would never pay more than a "fixed" % rate above the Bank of England base rate.

2) I was not made aware that the "differential" part of this product could ever change mid term of contract. I was told it was a "fixed" rate above base rate that would "track" the "base rate" for the term of the contract.

3) The increasing of this "differential" above base rate from 1.1% to 3.39% amounts to an increase of 300% which, at a time when interest rates have remained unchanged, is clearly disproportionate, unjustified and not what Bank of Ireland led me to believe their "base rate tracker" mortgage consisted of when I was sold this mortgage.

4) The right to change a "for the life of the mortgage" mid contract is fundamentally misleading. It appears that this clause in there contract was hidden away an the T and C and not advertised. The Bank of Ireland contract has too wide a scope to rely on contractual power for its own profiteering or shortcomings.

5) The reasons Bank of Ireland give for this change are not valid. Any issues the Bank of Ireland has with its capital reserves etc are clearly of its own making or mis-forecasting and should have been planned for at the time they made this contract with me. Bank of Ireland has clearly stated they are not in financial trouble and senior staff are to receive 7 million euros in bonuses. (Google Bank of Ireland bonuses)

6) This undermines confidence in the Bank of Ireland products and the market of financial products generally.

The Bank of Ireland should be made to Honor the "base rate tracker" that was marketed and that I was reasonably understood to have been sold.
Please DM me if you have been affected and we can pool resources. In the first instance make a complaint to the bank of Ireland, then the Ombudsman. (It costs the Bank £750 for every complaint made to the ombudsman)

Even if you have not got one of these type mortgages from this bank- I would read your terms and conditions very carefully- This is the thin end of the wedge and other bank will be watching very carefully.

I am also been posting on twitter about this but i don't want to add my twitter name here- I was once band for self promotion on here- Moderator- can i add my twitter name? (it it my biz name)

Thanks,

Dave