A MORTGAGE lender has asked the High Court to overturn a decision of the Financial Services Ombudsman requiring it to allow a couple to revert to a tracker mortgage for the remainder of their 35-year mortgage.
The ombudsman made the order against Irish Life and Permanent, trading as Permanent TSB, after finding the lender should have made clear, and in writing, to the couple they would lose their right to revert to a tracker mortgage if they opted out of their fixed-rate term early.
The couple, who changed from their fixed-rate term to a variable rate in January 2009 after one of them became unemployed, had complained to the ombudsman the consequences of switching were not clearly explained by the lender.
The ombudsman upheld their complaint in February last and the lender has challenged that decision in proceedings which opened yesterday before Mr Justice Michael White. Permanent TSB claims there were “significant errors” in the ombudsman’s findings, including his finding that the bank had a “fiduciary relationship” with the couple.
The court heard the couple took out a mortgage for €395,000 with the lender in 2007 with the interest rate fixed for the first three years, after which the rate would revert to a tracker rate following ECB rates.
In January 2009, they contacted Permanent TSB’s Lucan branch concerning whether there was an exit fee for the fixed-rate mortgage. They said they were told there was “no penalty” and the couple then switched rates.