Latest: Over 100 properties through the mortgage tracker scandal, reveals Central Bank chief

LATEST: Homeowners and investors have lost more than 100 properties through the mortgage tracker scandal, the Governor of the Central Bank has said.

Latest: Over 100 properties through the mortgage tracker scandal, reveals Central Bank chief

Update 12.45pm: Homeowners and investors have lost more than 100 properties through the mortgage tracker scandal, the Governor of the Central Bank has said.

Philip Lane has told the Oireachtas Finance Committee he suspects that number will increase as mortgage lenders continue their analyses of affected customers.

He also revealed that by the end of September, €120m had been paid out in redress and compensation.

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This is on top of €36.8m paid out by Permanent TSB and €6.2m by Springboard Mortgages Limited pursuant to their Mortgage Redress programme, he said.

Mr Lane told the committee that around 13,000 affected accounts were identified by lenders after the Central Bank ordered them to conduct a review of their mortgage loan books.

Approximately 60% of these cases arose as a result of customers not receiving a tracker product, Mr Lane said.

The remaining 40% related to customers not receiving the correct tracker margin.

He claimed that as of the end of September, lenders had rectified the interest rates applied to approximately 7,700 affected accounts.

"This represents 98% of customers identified by lenders as requiring rate rectification," he added.

Mr Lane was before the committee to answer questions about the mortgage tracker controversy.

His appearance comes a day after the Committee's chairman, John McGuinness, accused the Central Bank of not doing enough to "bring banks to heel" over the scandal.

The Central Bank Governor insisted the probe was "the largest, most complex and significant conduct review" undertaken by the bank to date.

"We recognise the hurt and damage the actions of lenders have caused for many borrowers," he said.

"This is evident in the calls we receive to our helpline and the powerful testimony from the individual borrowers that appeared before this Committee last week.

"We are pushing the limits of our powers to ensure affected customers are remedied appropriately," he insisted.

But he raised concern that two lenders may have failed to identify populations of impacted customers or failed to recognise that certain groups of their customers had been affected by their failures.

"We are of the view that some of these customers have in fact been affected and, accordingly, are entitled to redress and compensation.

"We have challenged the two lenders on these issues and they will report back to us by end of October," Mr Lane added.

He accused "certain lenders" of falling "materially short" of the Bank's expectations in relation to the issue of redress and compensation.

He said they had failed to offer compensation "for certain impacted cohorts of customers or offered unacceptably low offers of compensation".

The Central Bank was liaising with the Garda, Financial Services Ombudsman (FSO) and the Competition and Consumer Protection Commission (CCPC) as part of the examination of the controversy.

Update 11.51am: The Governor of the Central Bank has said that his office has been in contact with the Garda over the tracker mortgage scandal.

Philip Lane has been speaking before a Dáil committee today about measures taken to compensate mortgage holders who were wrongly taken off tracker rates.

The governor says that to date €120m in redress has been paid out to 3,300 customers.

However, he said that some banks are dragging their heels and two enforcement cases are open with a further two are being prepared.

“We expect all relevant lenders to have initiated redress and compensation by the end of 2017 and we are also in liaison with other State agencies including the CCPC, the FSO and An Garda Síochána”.

Update 10am: The governor of the Central Bank Philip Lane is to tell the Oireachtas finance committee today that the tracker scandal has pushed his powers “to their limit”, writes Daniel McConnell and Juno McEnroe .

In his address, seen by the Irish Examiner, he will say he believes the number of those who have lost homes and properties will increase from the 23 homes and 79 buy-to-let properties already confirmed.

However, Mr Lane will stress the bank has been pushed to its limit by the lack of co-operation and progress made by lenders in compensating and amending tracker cases with borrowers.


The Taoiseach has warned the banks they will face tougher new laws should they fail to quickly and adequately compensate tracker mortgage customers.

Leo Varadkar said the failure of the banks to properly address the plight of 13,000 plus customers has “undermined” the State’s rebuilding of the banking system.

Speaking to the Irish Examiner, Mr Varadkar said: “The slow response of lenders has undermined the Government’s efforts to restore trust in the banking system. They need to fess up and fix it. We do not rule out new regulations and new taxes if we don’t see a step change in their response.”

The threat to strengthen the powers of the Central Bank and to sanction the banks is the strongest language to date from the Government in relation to this scandal. The comments come as Fianna Fáil demands the Central Bank examine minutes of bank board meetings and emails to see who was responsible for the scandal.

Mr Varadkar said the Government has “lost patience” with the banks over their maltreatment of 13,000 tracker mortgage customers who were adversely affected, in what Labour leader Brendan Howlin called a “gross betrayal”.

Mr Varadkar said: “We do need a clear timeline for redress and compensation. The two banks who have been found wanting are likely to be named by end of October.

“The Government believes the behaviour of the banks in regard to removing people from tracker mortgages was scandalous,” he said.

Finance Minister Paschal Donohoe is to haul bank CEOs into his office next week to “admonish” them over their failure to resolve the plight of those affected.

“The minister for finance has arranged to meet the CEOs of the main banks, Bank of Ireland, AIB, Ulster Bank, PTSB and KBC, on Monday and Wednesday next week, and he will admonish them for their conduct on behalf of the Government,” he said.

Mr Varadkar and Mr Donohoe held several conversations throughout Tuesday on the tracker mortgage scandal and while Mr Donohoe was due to meet the banks, sources have said the “context has changed significantly” given the Central Bank’s report which confirmed the 13,000 cases.

The failure of the Central Bank to take a tougher stance on the banks has come into focus as the Irish Examiner has also obtained copies of 2014 correspondence sent by former Central Bank governor Patrick Honohan to then Fine Gael backbencher now minister Jim Daly which said the bank felt the amount of customers affected was “zero”.

Separate correspondence sent by Mr Lane to Mr Daly this year said the problem was limited to “a small number of isolated cases”.

Fianna Fáil finance spokesman Michael McGrath said the political will to address the plight of the mortgage customers is there and should be capitalised upon. Speaking to the Irish Examiner, he said: “The Government has finally woken up here to the seriousness of the situation in that thousands of customers remain to be repaid. The Central Bank is being faced down and it is unacceptable.”

He added: “There must be accountability, there is a need to examine if any additional powers are needed. The political will is there.”

This article first appeared on the Irish Examiner.

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