Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

107. To ask the Minister for Finance the number of properties that each of the State backed banks calculate were lost by the owners due to the fact that the owners were wrongly on a tracker mortgage (details supplied); if he will break down this number by PDHs and BTLs; the process by which these numbers were arrived at, that is, does it includes voluntary surrenders, repossessions and so on; the extra redress the banks are considering or implementing for these cases; and if he will make a statement on the matter. [38400/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As the Deputy is aware, the Central Bank of Ireland announced in October 2015 that it would conduct a detailed review of Tracker Mortgage portfolios with all the banks under its supervision. The Central Bank sought to conduct a broad examination of tracker mortgage-related issues covering, among other things, transparency of communications with and contractual rights of tracker mortgage borrowers.

This review is currently underway, and the Central Bank is working with the banks to conduct a comprehensive examination of customer mortgage accounts with regard to tracker rates, including any instances where banks may have failed to deliver on their obligations to customers. Such instances may include cases where the bank was not sufficiently clear with customers on their terms and conditions, or where they have failed to honour contractual commitments.

The Central Bank has laid out a detailed and rigorous process for each institution to follow. The identification of affected customers, implementation of any appropriate rectification actions, as well as the calculation of any appropriate interest redress or compensation, are all processes currently being worked through by the banks. The review also involves oversight of each bank's work by an independent third party, and the establishment of an independent appeals process. Further, the Central Bank continues to review and monitor each institution's progress at every stage. It is possible that different banks will progress through the review process at different speeds.

I expect that the Central Bank, and each of the institutions involved, will provide information periodically on steps taken and progress made. The tracker mortgage review is an ongoing process involving the banks, their regulator and any affected customers; I have no direct role in its implementation. It is therefore not possible, nor appropriate, for me to speculate at this time on the number of customers that may be affected and the deputy will appreciate that this information is not held in my Department.

The table is a brief update from each of the banks in which the State is a shareholder:

AIB

"AIB is conducting a comprehensive review of customer mortgage accounts with regard to tracker rates. This process is ongoing. AIB s review has found the bank fell short on its  obligations to some customers. In order to prevent further detriment for the customers identified to date, AIB has in the first instance begun correcting interest rates on these accounts and writing to customers to outline their new interest rates and repayment amounts. Approximately 50% of the impacted customers are EBS and the remainder AIB. You will note that AIB s CEO Bernard Byrne recently told the Joint Committee on Finance, Public Expenditure and Reform and Taoiseach that, based on an assessment of the work done to date, 14 customers may have lost their homes as a result of having the incorrect rate applied to their mortgage accounts. AIB is contacting these customers to agree appropriate compensation measures. The process involved an examination of tens of thousands of accounts and is being conducted in accordance with Central Bank of Ireland guidelines. As the review progresses, AIB is commencing refunds to customers who overpaid interest and is paying compensation. Details of a set payment towards the cost of independent professional advice will also be made available to customers and the bank will establish an independent appeals process. An independent third party, KPMG, is reviewing key aspects of AIB s work. The overall review will take some time to complete. AIB has put in place a customer Freephone Helpline 1800 235 460 (Mon-Fri, 8:00am-7:00pm) to assist with any queries its customers may have."

PTSB

"On 28 July 2015, Permanent TSB Group announced details of its Mortgage Redress Programme (MRP). The MRP was established to address failures by Permanent TSB and Springboard Mortgages Limited (a Group subsidiary) in respect of 1,372 Tracker mortgage accounts. The Group determined that of this population, had the Group s failure not occurred, 22 customers (all Permanent TSB accounts) may have avoided losing ownership of their property. In making this determination, the Bank considered all relevant information available to it, including information relating to the customers affordability as set out by them in any completed Standard Financial Statements, the repayments that the customer was making to their mortgage at the time, the repayment amount which would have been due had the appropriate Tracker interest rate been applied to the mortgage account, the suitability of any alternative repayment arrangements and any other relevant information held by the Bank. Of these 22 accounts, 10 were Home Loan accounts and 12 were Buy To Let accounts. All of these cases (bar one where the property was repossessed having been abandoned) were customer led sales or voluntary surrenders. Each loss of ownership customer was offered a comprehensive redress and compensation package, which included the redress of the mortgage account, a significant minimum compensation amount (€25K for BTLs and €50K for Home Loans) and the compensation may also have included a write-off of any outstanding shortfall balance on the account, a refund of any repayments made to the account since the loss of ownership, a payment in respect of any increase in the property value from the date of sale and in the case of certain Home Loan customers additional supports where the customer is approved for a new mortgage which would be on the appropriate Tracker interest rate. Each Loss of ownership Customer also has the right of appeal to an Independent Review Panel.PTSB is also participating in the industry wide Tracker Review as detailed by the CBI earlier this year. PTSB is fully co-operating with the review which is currently underway."

BOI

"In 2015 the Central Bank of Ireland announced that it would conduct a Tracker Mortgage Examination with all lenders in Ireland. This examination is underway, and Bank of Ireland is co-operating fully with it."