10:27 AM, 29th April 2016, About 7 years ago 67
Our legal team from Cotswold Barristers and Michael Ashcroft QC were superb at The Court of Appeal. Three judges sat on the panel to hear our case, two Lords Justices of Appeal and one Lady Justice, the most eminent being the Rt Hon Lord Justice Leveson, President of the Queen’s Bench Division and third most senior Judge in the UK
For those who don’t know, with the backing of over 400 other landlords I took up a legal battle with the West Bromwich Mortgage Company.
The background to the case is that the mortgage lender provided me with a fixed rate mortgage which reverted after an initial fixed rate period to a tracker rate mortgage at bank base rate plus 1.99% to the term end. The loan term was 25 years.
In September 2013, along with thousands of other borrowers who had similar mortgages, I received a letter stating that my mortgage lender was varying my interest rate despite there being no change to the base rate. As if that wasn’t enough to make me furious, their letter carried a veiled threat, stating they had to increase the rate for their own commercial purposes, failing which they would have to consider calling in the loan. Note that my loan wasn’t and has never been in default.
Thankfully, enough other landlords were equally furious and we found each other via Property118. Without their financial support I would not have been able to mount a legal battle of this nature.
The rate rise only affected me to the tune of just over £100 a month but that wasn’t the point. It was about the principle.
Over £500,000 has been raised to fight this case!
We knew the West Brom would play dirty and do all they could to run up legal bills in the hope that we would drop our case. Before this move the Building Society was losing millions every year. This rate rise secured their solvency and returned their failing business back into a profitable position.
Needless to say, they underestimated our resolve.
We should have a verdict in a few weeks time, we are not sure exactly when.
Win or lose, I am incredibly proud that landlords were able to come together to show the world that big financial institutions must not assume that just because they have deeper pockets than their customers they are always in the right. Our group has achieved something that the landlord associations refused to entertain. We fought back!
Even if the Appeal Court Judges were to decide that technically the West Brom contract is how the West Brom lawyers perceive it, this case has shown the world the true colours of this building society. If the lender had made it clear to any of the affected borrowers that their contracts were intended to enable them to vary tracker mortgage margins, or to call in a 25 year loan with just 30 days notice without it being in default, I very much doubt that any borrower, or indeed broker, would have given them their business.
All who attended the Appeal today are as confident as I am that justice will prevail. The prior preparation and planning and the level of detail and the commitment to research undertaken by the team at Cotswold Barristers was admirably extensive and could not have been better presented by Michael Ashcroft QC.
We all felt the three Appeal Judges were able to see through the ludicrous excuses made by the mortgage lender and the unfairness of what they’ve done. It could of course simply be that the judges were “playing to the gallery” but their cutting remarks to the QC representing West Brom seemed very genuine to all in the room.
The Court room was packed!
We live in hope that landlords will continue to come together and fight injustice, whether that comes from mortgage lenders, government policy or elsewhere.
The landlords associations continually fail to represent landlords when it really counts, this case is just one example, there have been far too many others. It is down to all is to fight injustices, of which there are many, #tenanttax being the hot topic of late.
Please share this message with as many landlords as you know.
If we do win this case, we would like to think it will inspire other landlords to unite, raise funds and fight similar cases where we know we are in the right.
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21:10 PM, 29th April 2016, About 7 years ago
Is a possible outcome that West Bromwich has to pay back the additional interest collected, but immediately activates the '30 days to repay in full please clause'
Are similar deals available on the market for those affected if that happens?
Mark Alexander - Founder of Property118
21:36 PM, 29th April 2016, About 7 years ago
Reply to the comment left by "Jon Pipllman" at "29/04/2016 - 21:10":
Yes that is a risk we've all factored in.
However, logic suggests that both clauses are equally unenforceable. You'd have had to follow the detail of the case to fully appreciate exactly why. It's all on other threads here, 100's of pages of it which I'm not going to attempt to repeat but by all means read them fully and your question will be answered fully.
9:51 AM, 30th April 2016, About 7 years ago
I note with interest your comments regarding the failure of the main landlord associations to act on our behalf where it matters. Having been a member of one of these organisations for many years, I have come to the conclusion that they are just revenue generating organisations, with their main aim being to sell the services they offer, and entering into partnerships with preferred suppliers.
We need an alternative, and Property118 Landlord Association sounds like a nice title. You have proved yourself to be an excellent organiser fully capable of setting up something like this, which I am sure many landlords would appreciate, and contribute to. We would then really have a voice that could be heard.
10:12 AM, 30th April 2016, About 7 years ago
It's quite ironic that such deals were offered in good faith and now the banks complain about their margins being squeezed on tracker products but the reason BOE rates are so low is down to the banks behaviour which caused a global recession. Businesses failed, people lost jobs, food banks boomed. The banks are still here and moaning about their margins.....Do me a favour, I would like to squeeze more than a bankers margins. On a selfish note, I have 4 lifetime buy to let tracker mortgages on base rate + 0.5%, so I really do hope you win your case. My concern is that if you lose, it will be seen as a green light to all other financial institutions to basically default and increase their tracker rate mortgages.....I would imagine that the judges will consider this scenario very seriously. So in a way all Landlords with tracker mortgages are on your side and weighing on the judges minds in their decision.....do they want the floodgates to open? Good Luck and congratulations on your fight so far.
10:15 AM, 30th April 2016, About 7 years ago
Wow, what amazing course of events.
Btw great idea by Bill Williams regarding an alternative Landlord organisation!
I am obviously hoping that the outcome is a positive one for Property 118 and the group of Landlords that have taken this action. All other lenders will be halted in their tracks should they be eyeing up the opportunity of increasing the rates at whim.
Of course it does also mean that new loans will probably have a get out clause skilfully written in to Btl products that will allow some kind of overriding manoeuvre. We shall see.
May I ask, when the lender increased the rates in 2013 did all of the landlords pay the additional amount pending the outcome of the court case?
Or did everyone refuse to pay?
I sincerely hope that all of the other lenders involved are forced to pay back the "overcharge" along with the appropriate interest too.
Could it be that the appointed QC representing the landlords of West Brom could mount a charge against the other lenders? It could be a fabulous PPI type debacle!
Would be so appropriate and rewarding to " kick butt" as our American cousins would say and win win situation for all except for the Lenders of course 🙂
Well done Mark Alexander and the legal team and of course each and every Landlord that contributed to make our collective voices heard. Thank you so much.
10:16 AM, 30th April 2016, About 7 years ago
Mark found this >> http://www.independent.ie/business/personal-finance/property-mortgages/enforcement-action-taken-against-ulster-bank-over-trackers-34672938.html
Ulster Bank has admitted that the Central Bank is taking enforcement action against it over customers losing tracker mortgages.
And he says " Clearly the Irish Banksters are no better, but we already know that and we haven't forgotten what Bank of Ireland did to their Tracker rate customers here in the UK !!!!
10:33 AM, 30th April 2016, About 7 years ago
Well done guys. Hopefully justice will prevail. It is a shame that some of us have had to change our mortgages out of West Bromwich because of the increase. I hope you win.
15:27 PM, 30th April 2016, About 7 years ago
Brilliant news for u & us Landlords so far.
Let's hope the news comes good your way.
Then the next case of the ludicrous Clause 24.
17:46 PM, 30th April 2016, About 7 years ago
don't want to jinx it but if we win, what happens then?
do we get a cheque from West Brom for all our overpayments, plus legal costs, plus a little extra for loss of interest to us?
problem with that is many of us will then have to pay 40% tax on our money back.
myself? I'd prefer if West Brom would reduce my mortgage a bit.....well, more than a bit, a substantial bit. Negotiation over the amount the mortgage is reduced may well suit West Brom. Who knows, they could struggle to produce all the money due immediately.
Mark Alexander - Founder of Property118
14:03 PM, 4th May 2016, About 7 years ago
Headline in the Irish Times: BofI appoints Robert Sharpe as chairman of UK board
"His 35-year career in financial services has also involved leading the transformation and turnaround at West Bromwich Building Society"
Birds of a feather flock together?
Check this out >>> http://www.irishtimes.com/business/financial-services/bofi-appoints-robert-sharpe-as-chairman-of-uk-board-1.2634421