AIB Belfry Cases

AIB Belfry cases progressing in Court Approximately 300 investors in AIB Belfry cases (out of an estimated 3000 investors in the six Funds) are pursuing damages for alleged negligence, breach of contract, breach of fiduciary duty, negligent mismanagement and misrepresentation by AIB and other parties. Last month the Irish Times reporting on AIB Belfry cases (in a preliminary ruling in April 2017) a High Court judge approved hundreds of damages actions by investors in the Belfry property funds to go to a full trial on some, but not all, of the grounds advanced. The Court found, while some elements of the claims are statue-barred, other parts of the claims can now proceed to trial. The claims involve the operation of five separate investment funds into commercial property in the UK known as “the AIB Belfry Funds”. Affidavits claim individuals invested sums of between €50,000 and €200,000 in the funds between 2002 and 2006. Some cases involved individuals’ life savings to have been designated as pension funds. Seemingly the Statute of Limitations may not protect the various classes of Defendants if fraud in the mis-selling & operation of the AIB Belfry Funds can be evidenced. Loan to Value covenants In his preliminary ruling after 11-months, Judge Haughton decided on 28th April 2017 crucially, the investors’ contentions of alleged failure to advise them about aspects of the funds known as a loan-to-value (LTV) covenant before they invested are not statue-barred. It is claimed these covenants permitted assets which the fund had invested in to be sold if their value fell below a certain amount. These asset sales, it is claimed, occurred...

Tracker Mortgage compensation 2017

Bank of Ireland Tracker Mortgage compensation being faced-up to as Movable Feast . Last month (first quarter 2017) 15-Banking Groups have owned-up to having to redress in excess of 15,000 Borrowers through a series of Tracker Mortgage compensation schemes. See also Fintan O’Toole on Banks getting away with fraud . There is now a likelihood that the Regulator will impose additional separate financial sanctions on the offending Banks (in the Regulator’s industry-wide review). The Banks’ euphemism of ‘falling short of their contractual obligations’  is an opaque reference to affected Borrowers’ being denied of their rightful opportunity to switch back from fixed Rates to tracker rates over 9-years ago. BoI is the last of the Irish Banks to set up a Tracker Mortgage compensation scheme – now apparently operational since early 2017. The 15,000 Mortgage borrowers who were impacted, represent an aggregated overcharge value of €500M over the mortgages’ lifespan. A Tracker Mortgage compensation  scheme typically allows a sum [in the region of €500] for Independent Professional Advice per case, clearly based on the thesis ‘ask me no questions and I’ll tell you no lies’. Central Bank recommend Indep Legal Advice on Redress Offers   BoI’s latest disclosures are suspect in so far as they represent a new (& previously unheralded phase-2 Tracker Mortgage compensation) whereby some 7-years ago, in 2010 it previously restored 2100 of its own customer accounts back on to tracker rates. In December 2016, the Central Bank,  confirmed that, to date approximately 100 houses have been repossessed by Irish Mortgagee Banks as a ’cause & effect’ of having been denied the right to have obtained substantially lower tracker mortgage...
Flaws in Tracker Redress Schemes

Flaws in Tracker Redress Schemes

A Conflict of Interest is something that potentially haunts members of the Professions in all democracies. On the Web Site of KPMG., (authors of PermTSB’s Tracker Redress Schemes) reference is made to a recent Wall Street Journal article1 and public comments by the Securities and Exchange Commission’s (SEC) Director of the Office of Compliance Inspections and Examinations, 2 the Financial Industry Regulatory Authority (FINRA) and the SEC are “keenly focused on conflicts of interest” for firms in the financial services sector. Further emphasizing the importance of managing conflicts of interest (COIs), SEC Director di Florio stated that “conflicts of interest, when not eliminated or properly mitigated, are a leading indicator of significant regulatory issues for individual firms, and sometimes even systematic risk for the entire financial system.”A recent Sunday Times article disclosed that KPMG were paid €8.6m by Permanent TSB in 2015 for work on the state-controlled bank’s Tracker Mortgage Redress Schemes [TMRS] and other “regulatory and compliance projects”. The payment, equivalent to a substantial 3% of the accountancy firm’s all-Ireland fee income [of about €300m a year], provides the first glimpse of how a Tracker Redress Schemes scandal will cost Irish lenders millions in fees, on top of the interest refunds and compensation they will have to pay to impacted customers. The emerging Tracker Redress Scheme scandal, is rooted in the unfair removal of low-cost tracker mortgages from thousands of home owners, is also interfering with the banks’ ability to securitise, or offload mortgages as they seek to sanitise their balance sheets. Approximately 90 of the 1,372 customers offered compensation as part of PTSB’s Tracker Redress Schemes have...

Permanent TSB Tracker Mortgage Redress Scheme – Desperate Measures on Tracker Mortgages Scandal

  Because of a series of Bad Calls made over the previous 15-years, in a Tsunami of reckless lending activities the exposures to Bank balance sheets became such that the majority of Tracker Mortgages were a major source of recurring business losses. This has been particularly true of Permanent TSB., and its enforced commencement of its Tracker Mortgage Redress Scheme. To counter-balance this, the Banks [collectively and individually] evolved a Customer Handling Strategy whereby affected Borrowers were cajoled, by-hook-or-by-crook to forfeit their rights as Tracker Mortgage Borrowers. As a direct consequence of being very deliberately inveigled into moving-off Trackers, without being appraised of their Rights as Consumers at the time, Borrowers (to date, and into the future) have been charged very substantial volumes of mortgage interest. Indeed it has been demonstrated that in the case of Permanent TSB., more than 22-affected Home Owners actually had to under a forced-sale of their Private Residences. Scale of Tracker Scandal: Recent media estimates indicate that what is now legitimately referred to as the Tracker Scandal is expected to cost PermanentTSB, alone at least €35m in reimbursements to customers together with an additional €20m in Central Bank fines. Such mortgages are a carry-over from the pre-2008 Banking boom  when Irish banks could borrow virtually unlimited amounts from mainland European banks at or close to official ECB rates (see Previous Blog on Government & Banks acted in consort to fuel reckless lending). Those days are long gone, and Irish Banks have been caught ‘with-their-trousers-down’ but the tracker contracts remain in force, with the recently-released Central Bank statistics showing that 47% of all mortgaged owner-occupied...