Central Bank of Ireland probes tracker mortgages

The Central Bank of Ireland has initiated an investigation of tracker mortgages issued during the property boom and has written to all lenders that offered tracker mortgages on family homes and investment properties. The probe will cover offers made up to the end of this year and includes  AIB, Bank of Ireland, Ulster Bank, KBC Bank Ireland and ACC as well as  banks that have left the market or gone out of business  including Danske, Bank of Scotland, Start and Irish Nationwide. The Central Bank will provide an update on the probe in April.

The Central Bank is to investigate all lenders that offered tracker mortgages during the boom

The Central Bank has decided to investigate all lenders that offered tracker mortgages during the boom to see if customers' rights to keep them have been fully honoured.

Letters went yesterday to all lenders that offered trackers, both for family homes and investment properties. The probe covers the time they started to offer trackers up to the end of this year.

It will include AIB, Bank of Ireland, Ulster Bank, KBC Bank Ireland and ACC. It will also cover banks that have left the market or gone out of business, including Danske, Bank of Scotland, Start and Irish Nationwide, and the service companies now managing these mortgages on behalf of vulture fund owners, such as Pepper Asset Servicing.

Lenders have to appoint third parties to oversee their examinations of tracker-loss cases. The Central Bank will provide an update on the probe in April.

Meanwhile, there has been another fall in the numbers of people approved for a mortgage, with Central Bank lending restrictions being blamed.

Approved

Almost 500 fewer mortgages were approved last month, figures from all the banks show.

A total of 2,454 potential buyers were approved for a mortgage in November, according to the Banking and Payments Federation. This compares with close to 3,000 approvals in the same month last year.

Brokers claim the lending rules were leading to a situation where only the sons and daughters of rich parents were able to afford a deposit to get mortgage approval. A new academic report from the Central Bank has defended the policy of imposing lending limits.