Numbers hit by tracker mortgage scandal rise to 38,400

Numbers hit by tracker mortgage scandal rise to 38,400

The numbers affected by the tracker mortgage scandal have risen yet again to 38,400, the Central Bank governor Philip Lane will reveal today.

In a devastating attack on the continuing sharp practices in the five domestic banks, Mr Lane will say his examination of the tracker scandal revealed bank executives are behaving in ways which are “remnant of the crisis.”

Previously, Finance Minister Paschal Donohoe said he believed the number would level off around 30,000 but the numbers have continued to escalate.

The banks attacked by the governor are AIB, Bank of Ireland, Permanent TSB, Ulster Bank and KBC.

“We saw too much focus on short-term and legacy issues, with insufficient attention paid to consumer interests. We discovered some reversion to ‘command and control’ in leadership styles,” he will say.

The five banks which caused the tracker mortgage scandal are still being “overly obstructive” and legalistic with affected customers, he will tell the Oireachtas Finance Committee, chaired by Fianna Fáil TD John McGuinness.

“The examination exposed a clear lack of a consumer-centred culture in lenders,” he will tell committee members. It is clear that consumer-focused cultures in the banks remain under-developed and will only be embedded successfully if banks work to overcome obstructive patterns of behaviour,” he said.

Mr Lane will detail that as a result of the escalating crisis, so far €580m in redress and compensation has been paid by the five domestic banks to affected customers.

 “As of August 31, lenders have identified circa 38,400 affected customers (including cases resolved pre-examination following Central Bank intervention), and paid €580m in redress and compensation,” he will say.

Mr Lane will say that while the numbers involved give a sense of the scale of the examination, statistics cannot give the full picture of the detrimental, and in some cases, devastating effect that the failures of lenders have had on customers, up to and including the loss of homes and properties.

“For instance, we found some banks adopted a narrowly legalistic approach in conducting the examination rather than embracing a customer-focused perspective, with some offering initial compensation proposals that fell well short of our expectations.”

In terms of the housing crisis, he will say a substantial expansion in supply is required if the high demand to own and rent homes is to be satisfied. 

He will also say that of the 66,479 private dwelling home loans in arrears, 28,237 or 42%, have “very deep arrears” with arrear balances of more than 720 days past due.

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