Confidential document lifts lid on bank’s veil of secrecy on mortgage deals
Sinn Féin Finance Spokesperson Pearse Doherty TD has today released a confidential non-disclosure document used by AIB to gag borrowers in the buy-to-let market on mortgage deals with the bank.
Doherty said the document revealed the true extent of the bank’s attempts to keep hidden from the public how it deals with mortgage distress, at a time when people need transparency and action on the issue across all mortgage deals.
Deputy Doherty said:
“This confidential document finally lifts the lid on the bank’s veil of secrecy on mortgage deals within the buy-to-let sector.
“We have been aware for some time that in some instances banks are restructuring mortgages, but that it is arbitrary and they try to keep the details hidden.
“There are 185,882 housholds in mortgage distress, or 23.5% of all domestic mortgages, and many more just on the verge of going into distress. Of them, many of these are having sleepless nights. Many have not been dealt with effectively by the banks and constantly receive late payment notices and repeated phonecalls.
“There are clearly deals being done, but in this instance, for what we have been informed is for the buy-to-let sector, AIB has produced a legal document to prevent any borrowers disclosing that they have even talked to their bank.
“This can be seen in the first clause of the agreement which states the borrower must not… ‘disclose to any third party the fact that negotiations are taking place between the Bank and ourselves and in the event that an agreement is reached between the the Bank and ourselves to restructure our facilities, not to disclose to, or use for the benefit of, any third party the fact that such agreement may have been made nor to make known any details or information in any form…’
"The document contains a lot of threatening language and contains an indefinite clause that prevents the borrower from ever talking about the deal.
“Sinn Féin has been critical of the Personal Insolvency Act because we believe it will do nothing for those in mortgage distress because it keeps the veto with the bank. From what we can see today, leaving the power in the hands of the bank will mean leaving the banks to continue to act behind closed doors so mortgage holders do not know what they are entitled to. The banks are cherry picking who they will deal with and everyone else is left in the dark. It means the crisis limping on at a time when we need transparency and action to solve it.
"This document proves mortgages are being restructured, but that the banks are hoping they can keep it from the rest of the populace. It's sneaky practice and it's time for it to stop.” ENDS
Editor’s note: The confidential non-disclosure document which was provided to us by a source is attached to this press statement.
The within Undertaking is to be printed on the client’s Letterhead and signed by them personally in the presence of their Legal Advisors
PRE-NEGOTIATION NON-DISCLOSURE UNDERTAKING
To: Allied Irish Banks, p.l.c.
Re: Proposed restructuring of our facilities with Allied Irish Banks, P.l.c. (hereinafter referred to as “the Bank”)
In consideration of your willingness to enter into negotiations with us, in connection with a possible restructuring of our facilities we hereby irrevocably undertake and agree as follows:
- Not to disclose to any third party the fact that negotiations are taking place between the Bank and ourselves and in the event that an agreement is reached between the the Bank and ourselves to restructure our facilities, not to disclose to, or use for the benefit of, any third party the fact that such agreement may have been made nor to make known any details or information in any form (whether written, oral, visual or in any electronic form) relating thereto.
- To ensure that disclosure of any information in respect of any and all negotiations taking place between the Bank and ourselves or any prospective agreement between the Bank and ourselves to restructure our facilities is restricted to agents, employees (if any) and partners and/or directors (if any) of our business having the need to know the same and that each such, agent, employee, partner and/or director is bound by confidentiality obligations no less onerous than those contained in this letter and which are evidenced in writing.
- To indemnify the Bank in respect of any loss or liability of any nature whatsoever arising directly or indirectly out of any breach of the terms of this letter by us and/or any of our agents, employees, partners or directors.
- We hereby absolutely acknowledge and accept that damages are not an adequate remedy for any breach by us of the terms of this undertaking and we agree that you will be entitled without proof of special damage to seek the remedy of an injunction together with such other interlocutory or equitable relief for any threatened or actual breach by us or any of our agents, employees, partners or directors of the terms of this undertaking. We further acknowledge that these remedies are in addition and without prejudice to any other rights or remedies which the Bank may have at law.
- We accept that the Bank will not be committed to us in any way, or obliged to enter into any transaction, unless and until a formal agreement is duly executed and delivered and that regardless of any negotiations which may take place, the Bank is not obliged in any way to enter into any such agreement.
- It is agreed that the negotiations between the Bank and ourselves shall be without prejudice (i.e. meaning, without limitation whatsoever, not to be disclosed by either party in any court of law or other dispute resolution forum) unless and until final agreement is entered into between us, duly executed in duplicate by the Bank and ourselves in the presence of our legal advisors and exchanged.
- It is hereby further agreed that nothing herein shall prevent ourselves from disclosing any information as may be required by law, by any court or tribunal, or in accordance with the rules of any stock exchange or regulatory body, provided that we shall give prompt notice to the Bank of such requirement in order to give the Bank a reasonable opportunity to apply for and seek a protective order or other appropriate judicial relief to protect and maintain confidentiality.
- We acknowledge that our obligations under this undertaking are immediately binding legal obligations that will survive the termination of any discussions and negotiations between the Bank and ourselves and will continue indefinitely.
- The within Agreement has been executed by us in the presence of our legal advisor of our own free will and having had the benefit of receiving independent legal advice in respect thereof. We acknowledge and accept that fully understand the meaning and implications of executing the within Agreement.
- If any provision or provisions of this undertaking shall be held to be invalid, illegal, or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
- This undertaking is governed by Irish law.
[to be signed by persons properly
authorised to execute same on behalf
of the Borrower
 In the event that the Borrower is a registered company a resolution of the Company will be required authorising two Directors of the Company to sign the undertaking on behalf of the Company.