# Emirates NBD changing mortgage rates witouht legal ground



## tturut (Jul 12, 2010)

Dear All,

I have a mortgage loan with Emirates NBD which I am paying for the last 4 years.
My agreement with them is based on floating base rate linked to EIBOR plus a fixed margin. 

I have received a letter from them on 9th of July 2010 stating "This is to advise you that we are updating our pricing mechanism whereby the EIBOR (Emirates Inter Bank Offer Rate) is being replaced with the Consumer Base Rate (CBR)"

The letter does not clearly state who decides this CBR but it is clear that it is decided by the bank itself. 

They say that CBR will be 3.5% starting from 1st of August 2010 which is clearly 1% higher that the EIBOR rate. 

This sudden change will reflect as a 25~28% increase in my monthly payments.

There is no legal ground to this action of EmiratesNBD bank.

I am quite sure that there are a lot of unfortunate EmiratesNBD customers out there. Could you please spread the word? I do believe we (consumers) have to raise this issue all together to get our rights back.

Please let me know if there is anyone who is willing to take legal action jointly with all other effected EmiratesNBD customers.

Kind Regards 

TT


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## Elphaba (Jan 24, 2008)

Before you jump, have you properly checked your mortgage contract?

-


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## tturut (Jul 12, 2010)

Elphaba said:


> Before you jump, have you properly checked your mortgage contract?
> 
> -


I have, and couldn't find anything about replacing the six-month EIBOR plus the fixed rate to something else.
Basically the contract is allowing the floating base rate to be reviewed and revised every six months according to six-month EIBOR flactuations. And there is no other clause about changing EIBOR pricing mechanism.


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## double u (Jul 12, 2010)

i got the same notice today. The bank has no right to change the interest rate in such an arbitrary way. the website does not explain the basis for the CBR. clearly they are changing their loans are drying out and they want to maintain the same profit margins.


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## mojo1395 (Jul 13, 2010)

*No surprise here !*

Yes of course, they are doing this to maintain their profit margins.
I have an Emirates NBD mortgage too and have been aware for some time that some other UAE banks had revised their interest rates for customers with existing 
mortagages so it was no surprise to me when I got the letter from ENBD advising me of their following suit.

As a first step, I am going to write to the bank advising them that I reject their unilateral decision to revise the basis for the interest rate for my home loan 
without specifying the reason for replacing the 6m EIBOR with the CBR.
I will also ask for more information on what the CBR is, how it is calculated and if it is calulated by an impartial 3rd party authority.
I do not expect to get any joy but it will serve notice to them that I will not just roll over and pay up. I also intend to take a legal opinion on this matter and also write to the UAE Central Bank as well. Let me know if any of you want to make this a jont / collective effort.

The bottom line being that if ENBD are not willing to discuss this matter, I will try and transfer the mortgage to a multinational / foreign bank (HSBC / Stanchart) without paying any early settlement charge to ENBD.


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## mojo1395 (Jul 13, 2010)

*Mashreq sued over mortgage payments*

Found something on the same subject on the internet concerning a similar move by Mashreq. As a new member am not yet allowed to post the url to the article whic appeared in The National on June 09 this year but you can google the article using the subject of this post.
Don't be fooled by Mashreq's stance on this bank is no stranger to litigation, both within the UAE as well as outside. They have no other option but to look confident to their shareholders but what is disturbing is the lack of any response from the Central Bank.


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## dubaiPassion (Jul 15, 2010)

*Not Surpising*

What do you expect from a bank that is selling its assets to meet salaries and bonuses of its top management?! Referring to Network International.

It wasn't enough that Central Bank has injected a couple of Billion Dollars on what was called as Second Capital, and the fact that they forced over a 1,100 of ex-NBD staff from higher management to customer service agents to resign and they were the ones who knew banking and how to handle customers; it focuses now on whomever is left of its customers to clean their pockets.

Check this also: search google: EmiratesNBD The Failing Story


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## shahidns (Jul 29, 2010)

mojo1395 said:


> Yes of course, they are doing this to maintain their profit margins.
> I have an Emirates NBD mortgage too and have been aware for some time that some other UAE banks had revised their interest rates for customers with existing
> mortagages so it was no surprise to me when I got the letter from ENBD advising me of their following suit.
> 
> ...


Hey Mojo,
I too am one of those unforunate expats who have been affected by this. I raised a concern with ENBD, but they came saying that the contract allowed them to change the way my percentage is calculated as they wished. to which I stressed, YES YOU CAN, as long as it is tied to the EIBOR. Unfortunately, that is how the banking system is here and unless until the Central Bank intervenes, we have no choice but to go for legal action.

Did you send an email to ENDB from your side and did you get any legal advice on this. Any information to avert this injustice will be helpful.

Cheers mate.


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## shahidns (Jul 29, 2010)

shahidns said:


> Hey Mojo,
> I too am one of those unforunate expats who have been affected by this. I raised a concern with ENBD, but they came saying that the contract allowed them to change the way my percentage is calculated as they wished. to which I stressed, YES YOU CAN, as long as it is tied to the EIBOR. Unfortunately, that is how the banking system is here and unless until the Central Bank intervenes, we have no choice but to go for legal action.
> 
> Did you send an email to ENDB from your side and did you get any legal advice on this. Any information to avert this injustice will be helpful.
> ...



Anyone had any luck with this?


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## mojo1395 (Jul 13, 2010)

*Latest Update*



shahidns said:


> Anyone had any luck with this?


Had taken legal advice from two law firms and both only confirmed what you have said; that the agreement allows them to change the rate if the changes are linked to changes in Eibor but does not allow them to change the base rate for the interest.

Have not paid the new installment and am sticking to the old amount. Subsequently, had an interesting phone call from their collections dept. , this person started making threats and after giving him some free advice on what he could do with himself, hung up on him. Have not had any more calls since but I could do with some entertainment during these slow summer days.
Have also obtained quotes from two international banks, with whom I have a premier banking relationship. They are keen to take over the mortagage at better rates and terms and intend moving my loan to one of these. 
Would suggest you also do the same and leave ENBD to stew in their own juice.


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## mssharei (Jul 24, 2011)

*Emirates NBD Mortgage*

Hi folks. What is your latest feedbak on the EmiratesNBD unjust and unilateral changing of the interest rate calculation?

I realized this change has affected me since 2011 and I am also paying at least 1 to 1.5% interest higher than the EIBOR based calculation. Further, the RERA published law on mortgages in 2008 mentions that the banks have to go by their contract (rather than arbitrarily change them). Further, that same law says that they cannot resort to other sources (I assume check guarantees) before, first settling their claims against the mortgage property.

If there is still any interest in a joint (class action) legal suit, I am interested and will participate.

M. Sharei




tturut said:


> Dear All,
> 
> I have a mortgage loan with Emirates NBD which I am paying for the last 4 years.
> My agreement with them is based on floating base rate linked to EIBOR plus a fixed margin.
> ...


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## mojo1395 (Jul 13, 2010)

mssharei said:


> Hi folks. What is your latest feedbak on the EmiratesNBD unjust and unilateral changing of the interest rate calculation?
> 
> I realized this change has affected me since 2011 and I am also paying at least 1 to 1.5% interest higher than the EIBOR based calculation. Further, the RERA published law on mortgages in 2008 mentions that the banks have to go by their contract (rather than arbitrarily change them). Further, that same law says that they cannot resort to other sources (I assume check guarantees) before, first settling their claims against the mortgage property.
> 
> ...


I have refused to pay the monthly instalments as per the Bank's revised interest rate and have continued to make my payments based on the 6m EIBOR posted on the Central Bank's web site as the base rate. I have notified the Bank that the agreement that I have signed with them does not give them any legal basis for what they are trying to do and if they want to take legal action, they are free to do so. They have not responded so far and it has now been over a year. 
That should tell you how confident they are about their legal position.......
I would not bother wasting time on legal action and suggest responding only when they decide to take the matter to the courts


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## ehaghighi (Oct 18, 2011)

Hello there, it has been a year now since Emirates NBD has applied their ridiculous CBR rate. I concur with all the discussions on this forum. As far as I am concerned, I have the same issue with a mortgage that has an unpredictable cost, and a premium of 35% over the market. 

This is just unacceptable, and Emirates NBD has no legal ground.

More impacting that the arbitration in court would be the reputation damage that the complaints can do.

I am going to open a facebook, twitter and google+ page for Emirates NBD customers, please join, and I am going to contact the press about this complaint. If you wish to join the petitiom, please contact me via the social media sites.


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## ehaghighi (Oct 18, 2011)

By the way, if you want to call and complaint, you can use the following number: 04 2016102, Ms. Prabha or Ms. Wendy.


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## Canuck_Sens (Nov 16, 2010)

This is not something new and has been happening for a long time. 

You have couple of options:

a) Lodge a complaint @ the Central Bank of the UAE website, attach all the documents (REALLY all documents and explain very well your case). They will issue a recommendation to you.

b) This one is tricky, but there are several customers that sought legal action, look for lawyers who are representing customers in mortgage rates battles.

Good luck


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## ehaghighi (Oct 18, 2011)

Hi, thanks very much for the tip. I sent an email to the Central Bank with a cover letter and all the documents in exhibits, unfortunately, at this stage they did not reply, and their phone does not pick up.

Could you guide further? What can I expect from the Central Bank's recommendation?

Many thanks.




Canuck_Sens said:


> This is not something new and has been happening for a long time.
> 
> You have couple of options:
> 
> ...


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## Canuck_Sens (Nov 16, 2010)

ehaghighi said:


> Hi, thanks very much for the tip. I sent an email to the Central Bank with a cover letter and all the documents in exhibits, unfortunately, at this stage they did not reply, and their phone does not pick up.
> 
> Could you guide further? What can I expect from the Central Bank's recommendation?
> 
> Many thanks.


You are certainly most welcome !

Remember you are not the only one, though. There is a queue ....but check the 2nd tip I offered.....might help

Well there is another tip for you kindah clicked while writing .... how about you read your mortgage contract and see who is in charge to settle disputes. you should as well engage the mediator...it is supposed to be written in your contract.


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## Canuck_Sens (Nov 16, 2010)

Hi There is another piece of info that I overlooked when you asked your question. 

Do not have any kind of expectations that the Central Bank will solve your problem with the Bank. They will recommend a course of action to you.


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## harveyellis (Apr 20, 2012)

*Emirates NBD*

Hi Everyone, 

It looks like I came late to the party here!!

I never even got a notice from ENBD of the change from EIBOR to Base Rate in 2010 and never really paid much attention at the time in the media....I only noticed I was being totaly shafted on discovering that I've been paying the same rate for the last 14 months @ 7.5%.

I've realised that I should be paying more like 5% according to EIBOR (2% + 3%) as per my contract signed in 2005.

I approached the bank with this argument and they simply said we can do what we want and change the terms of the contract when we want. This really defeats the whole point of a contract but of course in reality we know the banks are screwing us over time and time again, the world over.

Are there any action groups and legal groups formed to fight this action from ENBD?


Best Regards,



Harvey


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## Canuck_Sens (Nov 16, 2010)

I am sure there is but I do not think you will find here the names of lawyers or people unless there are some on the same boat with ENBD.

On a second note, I am really surprised that people are still buying (having a mortgage) knowing about the fact that banks have been acting with great abuse. 




harveyellis said:


> Hi Everyone,
> 
> 
> Are there any action groups and legal groups formed to fight this action from ENBD?
> ...


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## harveyellis (Apr 20, 2012)

Hi M. Sharei,

Did you find any join action groups against ENBD?
Any idea of the status of the Masreq Group action?


Best,


Harvey


QUOTE=mssharei;572082]Hi folks. What is your latest feedbak on the EmiratesNBD unjust and unilateral changing of the interest rate calculation?

I realized this change has affected me since 2011 and I am also paying at least 1 to 1.5% interest higher than the EIBOR based calculation. Further, the RERA published law on mortgages in 2008 mentions that the banks have to go by their contract (rather than arbitrarily change them). Further, that same law says that they cannot resort to other sources (I assume check guarantees) before, first settling their claims against the mortgage property.

If there is still any interest in a joint (class action) legal suit, I am interested and will participate.

M. Sharei[/QUOTE]


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## harveyellis (Apr 20, 2012)

Hi haghighi, 

Is there any news on thre Emirate NBD case and action?

Best, Harvey



ehaghighi said:


> Hello there, it has been a year now since Emirates NBD has applied their ridiculous CBR rate. I concur with all the discussions on this forum. As far as I am concerned, I have the same issue with a mortgage that has an unpredictable cost, and a premium of 35% over the market.
> 
> This is just unacceptable, and Emirates NBD has no legal ground.
> 
> ...


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