Bank of Ireland increase differential on tracker rates

Bank of Ireland increase differential on tracker rates

10:32 AM, 28th February 2013, About 12 years ago 1862

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The story of the Bank of Ireland decision to increase to the differential (interest rate margin) on  tracker mortgages started on this forum when a professional landlord contacted Property118 within minutes of a letter from Bank of Ireland landing on his door mat. What ensued was outrage from landlords and affected residential mortgage borrowers. The story was quickly picked up by the National Media as it wasn’t just the 13,500 affected borrowers who were worried.

Will this set a precedent for other mortgage lenders to follow?

Property118 reacted by using funds donated to The GOOD Landlords Campaign to underwrite the cost of a barristers opinion on the legality of the Bank of Ireland’s actions. The remainder of this thread,one of the most read and most commented threads of all time on Property118, continues to tell the story as it unfolds.

If you want to skip the story and cut to the chase simply CLICK HERE

Of the 13,500 affected borrowers, 1,200 have had the decision reversed by Bank of Ireland. With additional support and pressure we believe all affected borrowers can and will see justice done.

___________________________________________

Lee, a professional Landlord asks, “help! I have just received a letter from the Bank of Ireland stating they want to increase the differential on my tracker rates.

I have 12 mortgages with the Bank of Ireland previously Bristol and West. I have been on a base rate tracker of 1.75% above base, but now Bank of Ireland are using some fine print claiming they have to recapitalise and saying the ‘new differential will be 4.49%.

How can I fight back?”

The original policy wording seems to be:

6 INTEREST

Charging interest at a tracker rate

(j) Unless we change the differential (if any) under condition 6 (n), we will not change the tracker rate unless the base rate changes.

(m) in condition 6 (n):
– a “positive differential” means a percentage which we add to the base rate to arrive at the tracker rate; and a “negative differential” means a percentage which we subtract from the base rate to arrive at the tracker rate.

(n) We may reduce a positive differential or increase a negative differential at our discretion by giving you not less than seven days written notice. This means that we can change the differential in a way that is favourable to you.

The above seems to indicate that they can reduce the rate in my favour, but not give them the right to increase it. Am I correct?


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Fed Up Landlord

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18:14 PM, 12th March 2013, About 12 years ago

David the mortgages where they offered me money to leave were post 2004, in 2005 and 2006. The mortgage they have increased was 2003. The later mortgages had different terms and conditions to the 2003 one which precluded them changing the differential.

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10:22 AM, 13th March 2013, About 12 years ago

Now that the initial furore has dies down a little, I would like to add my comment. I have 3 BofI BTL mortgages, all taken out before 2004 but as the fixed initial period came to an end I moved to a new rate and product.....after 2004. It is probably this that saved me because I have received no letters and after ringing BofI I was told that my mortgages remain as they are. The very helpful girl at BofI told me that those affected were where the mortgages were taken out before a certain date (she didn't say what that date was) and who had remained with the same product and consequently the same rate. My own rates vary between 1.75% and 2.25% and again the person I spoke to said that they could not be changed. She did however try to persuade me to speak to L&C to see if I could obtain better terms, when i declined she just said, that's fine.

Mark Alexander - Founder of Property118

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12:09 PM, 13th March 2013, About 12 years ago

UPDATE

We are expecting the response today from Martin Wheatley, Managing Director at the FSA, to the letter sent by Mr Andrew Tyrie MP last week. Watch this space!

Justin Selig will also be sharing some breaking news on the proposed Class Action litigation against Bank of Ireland today

Justin Selig - solicitor

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15:20 PM, 13th March 2013, About 12 years ago

IMPORTANT UPDATE
Just to update everyone on the progress with our proposed class action against the Bank of Ireland.

We are awaiting a response (hopefully later today) from Martin Wheatley, the managing director of the FSA to the letter sent last week by Mr Andrew Tyrie MP, chairman of the treasury committee, questioning what action the FSA proposes to take against the Bank of Ireland.

With the financial support of Property118.com and the GOOD Landlords Campaign, we have instructed an experienced barrister at 11 Stone Buildings.  The barrister specialises in Banking Law and professional negligence so is well placed to support our case.  He was involved in a claim against an Irish bank who wanted to change the interest rates they were charging a borrower from a base rate loan to a Libor loan. We have asked him to advise on the likelihood of success of a case brought against the Bank of Ireland.  We have also asked him to advise on whether there is any scope in pursuing the solicitors who advised the borrowers at the time the loans were taken out.

Once we have the opinion from the barrister (and subject to it indicating we have a strong chance of success) we will be convening a meeting of Bank of Ireland borrowers to discuss the proposed next course of action.

We have to date received indication from approximately 100 borrowers that they are interested in joining the action.

LINK TO CLASS ACTION EXPRESSION OF INTEREST FORM >>> http://www.property118.com/index.php/class-action-litigation-boi-bristol-and-west-mortgages/37248/#comment-20649

Alistair Nicholls

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15:29 PM, 13th March 2013, About 12 years ago

You can add me to the list of people interested in joining a class action. Didn't know where to sign up.

Maybe it's in an earlier post, but difficult to find

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15:37 PM, 13th March 2013, About 12 years ago

Thanks Justin for the update. If I am not on your list of people who want to be included in the class action , then can you add me please.

Thanks

Rob

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15:53 PM, 13th March 2013, About 12 years ago

i must say this is fantanstac so far i have a BTL BOI mortgage but thankfully am not effected but i feel for those involved. BOI behavier is discracfull, but the way this is all panning out will the support of property 118 and the legal people that are now involved you could have a real chance of knocking this bank down a peg or two! Great work everyone and the best of luck!

Mark Alexander - Founder of Property118

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16:18 PM, 13th March 2013, About 12 years ago

@Anthony Walker - if you have completed the "Class Action Expression of Interest Form" (linked to at the bottom of Justin Selig's latest post) then he has you on his list.

If you have not done that, chances are you are NOT on his list.

The link you need is >>> http://www.property118.com/index.php/class-action-litigation-boi-bristol-and-west-mortgages/37248/

Baggers

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16:59 PM, 13th March 2013, About 12 years ago

Are you allowing those with BOI/B&W residential mortgages, with the same issues, to join the class action?

Mark Alexander - Founder of Property118

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17:01 PM, 13th March 2013, About 12 years ago

@Baggers - yes of course 🙂

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