Ulster Bank/First Active Offset mortgages, here's the answer to previous thread!

kenif

https://www.rte.ie/news/business/2024/0503/1447198-ulster-bank-sells-4-000-former-offset-mortgages-to-dilosk/

Next Chapter

Abel Magwitch

If I am reading this correctly this is a much much better scenario for everyone than the portfolio being sold to companies like Pepper

shanoh

Revenue got back to me to say no decision yet about taxation on the goodwill payment and apologies for delay

kenif

Thanks for sharing Shanoh. I would of thought it was either taxable or not. Not sure why there is a "decision" to make. I hope they decide favourably. Will make the payment fairly meaningless as compensation if taxed.

aoraki

That’s somewhat concerning, they’ve had 6 months to look at this. The cynic in me thinks that Ulster Bank will have finalised their exit and then the Revenue will announce that the payment is taxable. By that stage too late for punters to raise a fuss because Ulster Bank will be gone baby gone.

How terribly convenient that would be for everyone involved (apart from the customers that is). I hope I’m wrong.

kenif

In fairness to Revenue, they where blindsided by this. No consultation or even notification from UB. They have asked punters to get information from UB about the payment and how it works. UB should at very least had all that ready to go to Revenue as soon as announcement was made.

I have used the payment to redeem so will struggle with any tax bill. But if I waited any longer I'd of been paying interest. Took the gamble. But with tax there are often ways to offset or reduce that bill. Would of been good to know the full ramifications before offsetting ended and interest had to be paid.

rameire

https://www.boards.ie/discussion/comment/122095083#Comment_122095083

If you think Ulster will be gone this year hold on to you pants. I would think as this has only just been announced and they still have other mortgages on the books they will be here well in to 2025

aoraki

@kenif Do we know that for certain? UB must have informed, and possibly worked with the likes of the Central Bank and the banking authorities when they were coming up with this solution. There’s no way those bodies found out about Ulster Banks solution on the same day that us customers did.

Would revenue not have also gotten wind of this?

kenif

Banking bodies I'd believe where. But Irish times article on 10th December quote Revenue as saying they where left completely in the dark on these payments.

aoraki

@rameire I think you’re right, it’s not going to happen overnight and even if everything goes smoothly for them (which I’m not sure is guaranteed) it’s still going to take time.

Plus in the Irish times article there was this;

“Asked how many loans remain on Ulster Bank’s books, a spokeswoman said the lender could not comment on future sales. However, she said: “Following conclusion of all agreed loan sales there may be a minimal number of loans that may remain on our balance sheet.”

So what happens to those loans? Do UB need to stick around and manage those?

Jim2007

MOD: We do not speculate on the possible actions of financial institutions, their reputations et al. The last thread had to be closed becasue it descended down the same rabbit hole.

Cooker1

I’m anxious as to how the Pay and re Draw will work. No reply from Ulster contact now my Offest has gone to Dilosk?

phormium

https://www.boards.ie/discussion/comment/122119565#Comment_122119565

I doubt your offset is gone anywhere yet, things don't happen that fast in bankland! You have to ring them, well at the moment anyway, and transfer whatever sum you want to offset into the mortgage. Family member did it the other day, transferred in I think around 30k from the facility and confirmed that would be available again to redraw next year when they needed some.

Now maybe if you don't contact them they will just close the offset and send you the money if you haven't transferred it out already yourself.

kenif

Not sure how you are trying to contact them. But from my experience the online stuff goes absolutely nowhere. Applied for redemption figure early Feb. Rang them end of March and they hadn't even got the request.

Ring 0818 210 260. Even then it depends on who you get so don't wait. If it hasn't happened when they say it will, ring again, and again. The mortgage is not meant to go for 2 months at least so it is still up to Ulster Bank to do this for you.

Cooker1

So I have more in my Offset account than I owe on my mortgage - 100k. My house has defective concrete blocks, is demolished and is worth site value/zero until it’s rebuilt. Ulster wont make a deal, so is this the time to ring Dilosk and check they are aware they are being sold a hole in the ground and see what they will take?

kenif

Sorry to hear that, a lot of stress and hassle. Are you part of the redress scheme? I can't see how that would stop a bank from letting you pay down the mortgage. Would they not jump at that.

The concern is the redraw. You have to have valid home insurance. Could that be an issue? Will the rebuild be completed before you intend to redraw?

Cooker1

Yes, part of scheme but the Redress is a long way short of 💯 so I’ll need to use a lot of what’s Offset. I’d asked for a figure from Ulster to get rid of me, nothing forthcoming. Want to reduce exposure to interest with Pay/Redraw.
I didn't know about the home insurance element. I’m worn out with the stress of it all.

phormium

Is the house insurance requirement new? I was never asked for that in the past when drawing down some of the facility, life insurance yes but not house insurance. Mind you I had it obviously but they didn't ask anything about it.

kenif

Good on ye phormium. I could of mixed them two up. Sorry for adding to your stress Cooker.

Q&A

https://www.boards.ie/discussion/comment/122119756#Comment_122119756

Deals are usually provided in situations where the borrower really has no hope of repaying the loan. Usually you'll be deep in arrears at that stage. Then they'd ask you to provide details of your financial position. It'll be clear very early on that you have the means to pay off your debt. In short, why wouldn't they want your debt?

Given the above, the fact the collateral has depreciated really won't come in to it. The only way to make that a factor would be a strategic default. Very correctly you've not suggested doing this. You'd end up still owing the money, you'd have wrecked your credit history and would not being able to borrow in Ireland for at least five years.

paul321123

Just noticed that I can not access my ulster bank account on line, only had a couple of euro left in there, anyone else notice this,

aoraki

If you had accounts that you were using to Offset against your mortgage, the deadline for getting them closed was the 23rd of May. If you had any money left in an account that was closed you’ll probably get a cheque in the post

McSween

anybody who is keeping the mortgage. Youd imagine our direct debit to UB will carry through to Dilosk. We lose the UB app and online banking Monday 22nd July.

aoraki

@McSween Are Ulster Bank switching off the App and Online banking next week? Was that communicated to customers?

Is your mortgage transferring to Dilosk on the 22nd?

McSween

https://www.boards.ie/discussion/comment/122384173#Comment_122384173

yes re the app. Not sure exactly for mortgage transfer. Possibly end of august, not sure.

aoraki

Thanks for the info @McSween. Will be curious if this applies to all customers. My mortgage is not being sold to Dilosk and is staying with UB, but I’ve heard nothing about the app or online banking being discontinued.

I guess I’ll find out next week 😂

kenif

https://www.boards.ie/discussion/comment/122385037#Comment_122385037

Just curious, but how is it your mortgage is staying with UB?

rameire

Some people never signed specific documents are loan stage which means they can't be sold on.

They Would in theory stay with the residual bank unless agreement is reached.

But as Ulster are getting rid of their banking license, the options open for a remaining customer will be very limited. They will continue to pay their mortgage have full regulatory cover and rules but won't have the availability of extra lending or apps or websites to guide them.

kenif

Out of ignorance how does that work when a bank no longer has a licence. Have they still got the authority to collect repayments?

aoraki

Yeah, that’s a good question kenif. Remains to be seen how it’s going to be implemented, they still haven’t provided any details to these customers other than “the mortgage is staying with Ulster Bank”. I have no clue about banking licenses and if they will need one to service a residual loan book.

Q&A

https://www.boards.ie/discussion/comment/122473068#Comment_122473068

You don't have to be a bank to collect repayments. You do have to be a bank to take deposits. It's the latter part and the unique nature of the offset mortgage account that was the issue for Ulster.

If the deposit facility is withdrawn then you're mortgage can be owned by a broader set of institutions. So Ulster can either sell it or they can keep the loan and hand back the licence -assuming there are no further offset mortgages or deposits on their balance sheet.

kenif

Thanks for that. The pay and withdraw then.… Will someone left with Ulster Bank still be able to withdraw funds. That feature(T&C) was separate to deposit accounts. As a non licensed lender will they still have to honour all that.

I'm actually redeemed, am just curious for the few left in this position.

aoraki

Hi Kenif, the only thing that you can’t do by remaining with Ulster is avail of top-up lending. Everything else is the same, you can use the pay and redraw feature, move the mortgage to another property, keep the tracker and it’s margin etc.