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

Jim2007

https://www.boards.ie/discussion/comment/121431915#Comment_121431915

There is nothing particularly surprising about this. On the one hand the parent company has already made is provisions for the dissolution of Ulster Bank and it is now coming up to the end of the financial year, so they need to get it done. On the other hand they also want to give up their Irish banking licese ASAP to avoid having to comply with CB regulations going forward. In the weeks and months ahead we are probably going to see some more similar activities as the pressure to get this done ramps up.

MOD: No more idle speculation on these matters.

paul321123

It says that the gratis payment will be made on or around the 10th January, will this be paid irrespective of returning the documents they ask for or is it a condition that you have to return the documents to receive this,

Cody OHare

Is it taxable as Income?

fliball123

https://www.boards.ie/discussion/comment/121432788#Comment_121432788

No as it is to cover your potential losses from losing out on the offset mortgage facility so your not gaining anything.

preda

Thanks for your reply. There are zero calculations within the letter and no explanation of how they came to this figure. They offered 7,050 and 250 for you to get advice on changing your mortgage to another provider. The 7,050 is a double of the figure (as their goodwill gesture!!) they calculated I was entitled to. So that would be approx 3500 they originally estimated!!. I think they are chancing their arm to begin with. But I will repost to let people know how responsive UB are to review this.

fliball123

https://www.boards.ie/discussion/comment/121432840#Comment_121432840

Preda did you have much of a mortgage or anything in your offset and how long had you left to pay?

fliball123

Just to get an idea of how many people are unhappy with their good will payment could a mod or someone put a pole up a simple yes / no would suffice?

kenif

No one should be happy. Even people who are fully offset. They are getting a payment worked out at 4%(it seems). With no doubling. Which sounds conservative with so much volatility in middle east/Ukraine even Korea now. So unless they treat this as a write down and pay off their mortgage they could loose out massively too

Unfortunately it's not about being happy. Have Ulster Bank applied their terms and conditions correctly?

If so, they could have just closed our accounts, sold our loans n headed off with themselves.

Do get legal advice. Do talk to central bank/regulator. Even ask a question to Q&A in some of the papers. But aside from that make sure they have included all offsets, have got your term correct, calculated it all off the correct loan/facility amount as of 31st of August. Ask them to see that calculation and check or get it checked.

I don't think they have done this without central bank so I believe the dates they set out are fixed. Question everything as we all know how many mistakes they have made in the past!! But do get you affairs in order for the dates they have set.

soap1978

https://www.boards.ie/discussion/comment/121433969#Comment_121433969

How are you working out 4 percent,4 percent of what? And who is saying they are not doubling,people are getting 90 and 70 thousand how does 4 percent work out with that figure?

fliball123

https://www.boards.ie/discussion/comment/121433969#Comment_121433969

I would argue that if a high % of people tell Ulster bank they want to keep the current arrangement as it is better for them financially they cannot break the contact which is what they will be doing without there being serious repercussions remember they just paid 128million in fines to the regulator for the last time they decided to ignore contract law and break a contract with customers. They are also under the gun time wise . So my idea of a poll to see how many people are unhappy is about getting numbers and the the higher the number the stronger the case and it could force a delay for them which will cost more cash. I remember signing for my mortgage and the key phrase for me was that the offset facility will be available for the duration of the mortgage. That is set in stone and there is no amount of wiggle room for them. As you pointed out the fact they have offered these payments is a gambit that a high % will just take it and move on being grateful for a few quid in the back pocket and not looking at the actuarial cost of how much the customer is losing out on with what Ulster bank are doing. I also think the timing of doing it with the ECB rate rises play into this as well.

kenif

It works out with mine. Also works out at about 4% with all the working examples they gave in press release. It's about. If you put your loan/facility as of 31st of August, remaining term and 4% into a interest calculator you will get fairly close to their offer. If you qualify for the max through doubling or whatever. But if you only slightly offset then I think you put in your offset amount instead of loan and double it to get close.

Uatstau

https://www.boards.ie/discussion/comment/121432824#Comment_121432824

This for me is the critical issue. I fear it is taxable. Note they do not call this 'compensation' even though that is effectively what it is. It is an 'ex-gratis payment'. Payment = income = tax. I'd love to be told I'm wrong but I suspect you have to pay tax, which means you only get about half of it. That changes the situation completely. I would be happy with the payment offered if it was tax-free, but not if it isn't. (Note that by having money in the tied account I effectively get the mortgage rate as interest and don't pay additional tax as you would with DIRT in a savings account. Now that benefit will disappear PLUS you probably get hit for tax).

Clarification would be welcome but, of course, don't expect that from Ulsterbank who in the FAQs tell you to 'talk to your tax advisor'.... like I have one... I just PAYE.

kenif

https://www.boards.ie/discussion/comment/121433994#Comment_121433994

What percentage of people have told banks that they didn't want their performing loans sold to a vulture fund. Didn't stop them. I have looked at the T n C on their website but not being a finance or legal person I can't say if they are right or not. Pulling accounts is mentioned though. It is dated Apr 23... How does it stack up to your original booklet? Anyone got that to check the sections they reference.

fliball123

https://www.boards.ie/discussion/comment/121434029#Comment_121434029

If it is taxable I wonder if by just putting the amount off the mortgage amount would avoid taxation. I know that when you sell a house and then buy one your not liable for tax on the profit made on the selling of the house providing it is used for buying the new house.

fliball123

https://www.boards.ie/discussion/comment/121434098#Comment_121434098

Yes but the vulture funds have to adhere to the terms and conditions and a condition in most mortgages is that the bank can sell the mortgage but that the entity buying must adhere to all terms and conditions. its usually when someone's mortgage interest rate increases or/and they default that we hear about how bad the vultures are but those who continue doing what they were previously as in paying away are doing fine. This will be Ulster bank actively breaking the contract by reneging on one of its fundamental conditions and one that made people go for one of these types of mortgages and there will be no where for them to run other than paying another massive fine to the regulator if they try to force this through without due diligence and ponying up the appropriate compensation for breaking the contract

paneur

Hi ..

Never posted before , anywhere , but this has annoyed me so much I feel I must...

I understood terms and conditions could not be changed when loan books were sold...

Does anybody on here have any legal knowledge if this is correct...??

The lead time up to this is just ridiculous . For over a year their advice was to "Do Nothing " until they contacted us. Now they are intending to wrap this up with no consultation whatsoever by early next year. We will give you a lump sum and a good bye letter. No even mention of new provider. Just not good enough...

Several people have mentioned grouping together to challenge this. I am more than willing to take part , but how can we actually make contact with each other .??

fliball123

https://www.boards.ie/discussion/comment/121434920#Comment_121434920

Well as I suggested get a poll going and anyone in the group that is unsatisfied we could get names and start a facebook/X/Whatsapp group and get people to go in there and then construct a letter to Ulster bank warning of legal action that will be coming from this group if they don't come to the table and if they are not willing then its time to go legal.

paneur

https://www.boards.ie/discussion/comment/121435063#Comment_121435063

I fully agree.. As I said this is my first time posting . I assume we can't just post details and phone numbers , so any idea how we can make contact to maybe form a watsapp??

TheAngryTechie

Hi, new on here.

i asked for the offset mortgage terms and conditions over a yr ago, got nothing. Asked again and eventually UB sent me a page of general conditions for my mortgage. Called them & complained that this wasn’t the terms but heard nothing back from them. That was months ago.

Today, got the letter with the UB offset t&c, I have never seen this booklet until today!

letter says they can remove the offset account due to section x of condition y, it’s all very suspect imo.

fliball123

https://www.boards.ie/discussion/comment/121435181#Comment_121435181

They will have to prove this from the original deal with First Active and I am sure that the phrase the offset facility account would be available for the duration of the mortgage was used. They need to show the original docs from what we all signed back with first active. If they cant show that then they have changed the term/condition without consultation.

kenif

Maybe don't wait till you have the group formed.

Give MABS 0818072000 a call. They are more debt service but are free of charge. N must have experience dealing with problem Mortgages and even contract disputes.

See what they think and people can join the group if there is traction or a case.

phormium

MABS will have no role in this I would think, it's not about arrears/debt management or budgeting issues unless one is also in that boat.

I have the original T&C booklet and will have a look tomorrow for comparable paragraphs, the ones issued with letter are obviously reprints as the originals are A4 sized but then they would hardly have thousands of originals hanging around!

fliball123

https://www.boards.ie/discussion/comment/121435181#Comment_121435181

There is no way they could of do this without breaking the contract as they would of done it years ago

fliball123

https://www.boards.ie/discussion/comment/121435280#Comment_121435280

Do you have the one from First Active, if you do it would be great if you could scan it and/or attach it on here for all to read?

aodhan2

I received the same letter and called them today . Got nowhere really and was advised to get financial or legal advice . I would be interested in seeing what others are doing

preda

fliball123 we have about 50k left and have had the mortgage fully offset paying no interest for a few years. For the last 3 months UB said we saved 672 in interest. (which was the most we've saved per quarter because interest rates are so high now) That's about 2600 per year if rates don't go up again. (predicted no possibility to go down until 2025). Yet they have calculated we will only save 3500 for rest of the almost 5 year mortgage!! They doubled this to 7000 as "goodwill". Doesn't come close to the interest we will actually have to pay or compensate for having to find hundreds extra per month and how that will affect our lives. I have phoned the helpline and a specialist is to call me back within 3 days. I am asking for a copy my mortgage history record, a formal written response to my disagreement of their offer and for a new offer to be made. I require this to open a case with the financial ombudsman, go to a solicitor and a mortgage advisor.

DB2023

https://www.boards.ie/discussion/comment/121435425#Comment_121435425

Why would you have to pay interest if you have the mortgage fully offset? The money currently offsetting yoir mortgage can be moved to continue offsetting your mortgage I believe.? And the rate will still be the same tracker rate regardless of who takes over?

kenif

50k at 5.65% for 5 years the maximum amount of interest you would pay is 7,500. If it's a couple of months out or a couple of thousand on loan that figure would change a bit.

They are not using the 5.65 as they predict it to come down so it seems you have maxed out.

phormium

https://www.boards.ie/discussion/comment/121435340#Comment_121435340

Not in a position to scan it at the moment, it's a fine big booklet! Read a few relevant sections and will attach (bad) pics from phone but from my reading it's kind of saying they can change what they like when they like! Remember we had free banking too on the current account but they took that away years ago as well.

FA.jpg

fa1.jpg

Fa2.jpg

phormium

https://www.boards.ie/discussion/comment/121435495#Comment_121435495

That's not entirely clear to me, I initially understood from my reading of the 'pay and redraw' bit that you could just lodge your lump sum funds into the mortgage and continue to save interest but then they say that it cannot exceed your facility limit. If one presently has an available facility of say 10k and lodges 20k directly to the mortgage does the available facility then change to 30k or is it still 10k of available facility and a credit balance of 20k on account. If it's the 30k AF then that's fine, it's like a basic sort of offset account but it would need managing to keep an eye on the natural reducing of the AF amount and to ensure the credit amount doesn't exceed the mortgage balance.

I'd ring and ask for clarification of that point except it doesn't apply to my mortgage as I only have about 18mts left and small balance.