Homeowners could be entitled to compensation for mis-sold mortgages
Based on the UK approach, compensation could range from 10% to 20% of the original amount borrowed, plus an additional amount for the stress and the threat of losing one’s family home over the years," according to Mr Hoey.
An Irish mortgage expert has said that hundreds of homeowners in Cavan could be in line for substantial compensation due to their mortgage being mis-sold by the banks during the Celtic Tiger years.
According to Ben Hoey, a chartered certified accountant and former investment banker, this compensation could be as much as €40,000 per mortgage. This figure based on a national average mortgage of €270,000 at the time.
A mis-sold mortgage is one where the bank took no proper consideration of the suitability of the loan for the borrower and no assessment of their ability to repay. Characteristics of a mis-sold mortgage include:
- A mortgage ending after retirement age;
- No proof of income requested (also known as self-certification);
- No evidence of ability to pay;
- Interest only payments with no plan for the repayment of the capital sum borrowed.
Mr Hoey said: "A substantial number of mortgages sold between 2002-2010 in Cavan were totally unsuitable for the consumers and the issuing banks did not follow the rules and principles set out under the various Consumer Protection Codes, Codes of Practice, internal handbooks and Central Bank guidelines. From my experience, mis-selling was widespread before 2010, but particularly in the years 2005 to and 2008. The mis-selling of mortgages is well established in the UK where compensation for consumers has been obtained through the UK Financial Services Ombudsman.’’
Based on the UK approach, compensation could range from 10% to 20% of the original amount borrowed, plus an additional amount for the stress and the threat of losing one’s family home over the years," according to Mr Hoey.
Potential victims in Cavan of mis-selling are advised to request a free review of their mortgage on Misselling.ie where they will receive guidance on whether they have a basis for a complaint to the credit institution and/or the Financial Services Ombudsman.