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Banks cracking down on tracker mortgage rentals

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  • 03-01-2012 1:58am
    #1
    pychofairy
    Closed Accounts Posts: 70 ✭✭


    http://www.rte.ie/news/2012/0102/tolr.html

    "Meanwhile, banks are reportedly cracking down on an estimated 20% of tracker mortgage holders who are renting out properties they used to live in.
    This could mean they are breaking the conditions of their mortgage and banks are trying to make them pay.
    A spokesperson for the Irish Bankers' Federation has said lenders can only do what is in the terms and conditions of their mortgage contracts"


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    #2
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    really old news there have been articles abotu this for nearly 2 years now. Ive yet to hear of any instances of it actually happening though.


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    #3
    deadl0ck
    Registered Users Posts: 4,185 ✭✭✭deadl0ck


    Wonder how they're going to try and figure out who has rental properties ?

    I suppose if you have more than one tracker mortgage with the same bank on a tracker rate it's easy enough. After that they would need something like the PRTB database as a starting point, or the NPPR database


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    #4
    Eire Go Brach
    Registered Users Posts: 1,373 ✭✭✭Eire Go Brach


    I am still living in my Apartment. But hope to move out in the future. Where would I find out if my Tracker would change?


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    #5
    Diarmuid
    Registered Users Posts: 3,981 ✭✭✭Diarmuid


    Eire Go Brach wrote: »
    Where would I find out if my Tracker would change?
    In the contract you signed with your bank.


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    #6
    Eire Go Brach
    Registered Users Posts: 1,373 ✭✭✭Eire Go Brach


    Yeh I thought as much. I remember signing loads of stuff. But not getting loads of stuff back. So not sure if I would have a copy or the solicitor.
    I will dig it out.

    With me when I took out a mortgage I fixed for 2 years. Then I was sent out 4 options of what to do next. As in what rate to take. I opted for the cheapest one which was a tracker of 1.25. Not a great tracker. But now it is with the banks raising the rates themselves.

    So would this mean that because i did not get it at the start of my mortgage. It would not effect me if I was to rent out.

    The only reason I want to rent is that I hope to buy a house in the future with gf. And I doubt I will be able to sell apartment.

    Thanks


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    #7
    Paulw
    Registered Users Posts: 13,381 ✭✭✭✭Paulw


    Eire Go Brach wrote: »
    Yeh I thought as much. I remember signing loads of stuff. But not getting loads of stuff back. So not sure if I would have a copy or the solicitor.
    I will dig it out.

    So would this mean that because i did not get it at the start of my mortgage. It would not effect me if I was to rent out.

    Your solicitor should have copies, but may charge you for providing them now.

    If you rent it out, you are still in breach of the tracker mortgage clauses. Just because your original mortgage was fixed and you then moved to tracker (I did the very same) doesn't exclude the conditions of the tracker.


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    #8
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    Paulw wrote: »
    Your solicitor should have copies, but may charge you for providing them now.

    If you rent it out, you are still in breach of the tracker mortgage clauses. Just because your original mortgage was fixed and you then moved to tracker (I did the very same) doesn't exclude the conditions of the tracker.

    exactly. if you read your mortgage contract its most likey going to state the mortgage offer is based on you being an owner occupier and that the terms are subject to change if this does.


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    #9
    jack_pearse
    Registered Users Posts: 120 ✭✭jack_pearse


    Hi
    I read on some website that Bank of Ireland will not be trying to get their customers to give up their tracker if they are now renting a property that was once the owners main residence.
    Does anyone know if this is true for Bank of Ireland customers?
    Thanks


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    #10
    Senna
    Registered Users Posts: 8,800 ✭✭✭Senna


    Not too sure what vacant possession means in this case, normally it means no one is living in the house, as in; you buy a house without a tenant already in it.

    As for banks chasing trackers, i would say it might be low down on the banks list of priorities. If the bank are getting money from the property, they might not want to risk non-payment if they raise rates and the mortgagee cant pay the new rate. If it was a larger amount (more than 20%), they would have probably chased up these people already. Not saying they wont do it in the future, but i'd say its not a concern for the moment.

    As for contracts not have a section on "lettings", they would probably argue that contacts were drawn up for PPR and so no need for a section on "lettings". The contracts probably state private residents a number of times, so that would void anything related to those sections.


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    #11
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    Bazbu wrote: »
    I took out a tracker mortgage with AIB in May 03. There is no heading 'lettings' and no mention anywhere else re letting the property out.

    It does say (point 12 in part 4 headed "Vacant Possession Of The Property") - "The customer must have vacant possession of the property, unless otherwise disclosed to and agreed by the bank".

    I dont think this impacts on my ability to let it out??

    I have the property let out for past two years all above board. I have never informed the bank other than notifying them of my change of address.

    go read your contract again.

    and you will see two words PRIVATE DWELLING. Contract relates to this once it is no longer a private dwelling the contract no longer stands.


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    #12
    D3PO
    Registered Users Posts: 7,879 ✭✭✭D3PO


    Bazbu wrote: »
    The words 'Private Dwelling' do not feature anywhere in the contract.

    well then Id say your in the clear.

    I know my AIB contract refers to the fact the contract is for a private dwelling but my contract is from 2005


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    #13
    spockety
    Moderators, Education Moderators Posts: 5,468 Mod ✭✭✭✭spockety


    Libretto wrote: »
    I also took out a tracker mortgage with AIB in early 2003. In the mortgage documents there is a section titled 'Covenants by the Mortgagor' and in this (section j) it says

    "The mortgagor hereby covenants with the bank during the continuance of the mortgage: Not to convey transfer assign demise or let or part with the possession of the mortgaged property or any part thereof or any interest therein without the express prior consent in writing to the bank"

    Couple of questions I'd appreciate opinions on please:
    • Does this mean that I cannot rent out the property without the banks consent?
    • Supposing I had rented it out for the past year or more - how would the bank ever know?
    • Surely the banks are just glad the repayments are being made?
    Many thanks...

    No they are not just glad. As a tracker customer you are costing them money.


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    #14
    DrPhilG
    Registered Users Posts: 12,329 ✭✭✭✭DrPhilG


    spockety wrote: »
    No they are not just glad. As a tracker customer you are costing them money.

    Then why are the banks not pursuing it? Everyone seems to be of the opinion that the banks are not doing much to push people off their trackers. Has anyone declared to their bank that they are renting and had the bank change their rate? For those who didn't declare it, surely the bank can go through the PTRB and cross reference?


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    #15
    pawnacide
    Closed Accounts Posts: 228 ✭✭pawnacide


    Mocrie14 wrote: »
    I took out a tracker mortgage with AIB in May 03. There is no heading 'lettings' and no mention anywhere else re letting the property out.

    It does say (point 12 in part 4 headed "Vacant Possession Of The Property") - "The customer must have vacant possession of the property, unless otherwise disclosed to and agreed by the bank".

    I dont think this impacts on my ability to let it out??

    I have the property let out for past two years all above board. I have never informed the bank other than notifying them of my change of address.

    If you have tenants you do not have 'vacant possession' of the property.

    If there's a lease for a given length of time you could not sell the property with 'vacant possession' unless the tenants agreed to move out. Even in the absence of a lease the notice requirements detailed in the 2004 tenancies act would mean that at any given time you don't have vacant possession. I'm not a solicitor but this is my understanding.


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    #16
    killers1
    Registered Users Posts: 1,443 ✭✭✭killers1


    spockety wrote: »
    No they are not just glad. As a tracker customer you are costing them money.

    You're right, they are not just glad but they are relatively glad because you are still making repayments. Every Bank have all available resources concentrating on collecting arrears and the MARP process and have turned a blind eye to the performing tracker loans...


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