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FOS rule West Brom Tracker Rate Hike is fair Advice, Landlords Stories, Latest Articles, Legal, Mortgage News, Property Investment News, Property118 News, UK Property Forum for Buy to Let Landlords

The FOS (Financial Ombudsman Service) have done it again! FOS rule West Brom Tracker Rate Hike is fair

In the past the FOS have controversially agreed that rate hikes applied by Bank of Ireland, Skipton Building Society (Amber Homeloans) and also the Danske Bank (formerly National Irish Bank) were fair. Therefore, is it really that shocking that FOS would also rule in favour of West Bromwich Mortgage Company?

Following a judicial review in the case of Millar & anor -v- Financial Services Ombudsman [2014] IEIC Mr Justice Garard Hogan recently ruled that the Irish FOS were wrong in their contractual interpretation in a rate hike case that the Millars brought against Danske Bank [source1].

This supports the Property118 members’ lack of confidence in the UK FoS decision making process, and hence the decision for Property118 to raise funds to enable their members legal team to stand toe to toe on 21st January 2015 with the West Brom legal team at the Commercial Courts in the Rolls Building.

Property118 members have raised nearly £500,000 and these funds are set to grow as a result of people who complained to the FOS realising that Property118 were right all along to take a representative action to the Courts.

The National Landlords Association initially recommended its members to pursue the FOS route and await the outcome of that before considering legal action. Many of those who followed this advice are enquiring about joining the representative action organised by Property118 as a result of the FOS finding. **West Brom has indicated through its legal team that it will apply the finding of the Court across the board to all affected borrowers**, so all additional support to ensure the right result is achieved is essential.

The Property118 representative group are happy to welcome all who have received the FOS rejection letter. The same financial commitments to those who joined prior to the deadline will apply, plus a small price for the administration costs associated with Cotswold Barristers applying to the Courts to have the names of the newly represented participants added to the claim. A new deadline of 19th December has been applied, this will definitely be the final deadline for legal reasons.

Newcomers are interested in joining the fight in the full knowledge that sufficient funds have already been raised and that the case will be heard on 21st January 2015.

Each member has paid £1,000 into an escrow account held by BARCO (The Bar Council’s Escrow service) plus a further £500 to Property118 and Cotswold Barristers to cover legal costs and associated running and marketing costs of the campaign for each represented mortgage account. Some members have a dozen or more represented mortgages, most have one or two. In the event of the case being won the majority of funds will be returned, plus of course a refund of any over-payments to West Brom and the satisfaction of their terms being upheld as per the borrowers understanding of the tracker rate mortgage contracts they entered into.

Every newcomer to the Property118 reduces the financial exposure to the funds already raised on the basis that all costs are shared pro-rata to funds committed.

** Beware false promises! **

Back in 2009 the CEO of the Skipton Building Society went on record that they would honour an interest rate cap [source2] just one year before that promise was reneged upon [source3]. However, insufficient funds were raised to take the case to court and borrowers have been left high and dry by the FOS and the FCA who decided the rate hike was fair despite the promises made. Perhaps that’s why West Brom borrowers want the certainty of being represented in the Property118 vs West Brom Court case, whilst it is still such a cost effective option?

If you are affected, and are not already a member of the Representative Action, please complete the form below for more details on how to get involved.

Representative Action Information Request

 


Message from Anthony Wilson of Ashley Wilson Solicitors LLP Ask Me Anything, Buy to Let News, Guest Articles, Landlord News, Landlords Stories, Latest Articles, Legal, Mortgage News, Property Investment News, Property News, The GOOD Landlords Campaign

Anthony Wilson of Ashley Wilson Solicitors LLPMy name is Tony Wilson.

I have today committed £15,000.00 to the fund to enable Mark Alexander and Mark Smith carry on the superb work they are doing on behalf of buy to let landlords who are being (in my view) mistreated by the West Bromwich Mortgage Company.

As a solicitor who has been in private practice for over 25 years and specialising in property throughout that time I am appalled at the way in which West Brom have sought to justify their unilateral action and I believe it is entirely correct that we should pursue a collective representative action in the way advised by Mark Smith which limits the financial risk to all concerned while giving us a voice to remedy this injustice.

I have done my due diligence before parting with any funds and I am fully satisfied that the route suggested by Mark Smith and Mark Alexander with funds protected within the Barco account gives us all maximum financial protection.

I also applaud Mark Alexander for leading this campaign.. which clearly deserves maximum public exposure.

This is not the first time over the last five years when I have been subject to a financial institution taking unilateral action despite the terms of a written agreement on the artificial basis “that it cannot afford it.” This type of action needs to continue to be challenged … the compensation payments having to be made by such institutions are increasing all the time now that the “chickens are coming home to roost”.

I urge everyone who has been affected by the West Broms behaviour to stand up and be counted .. to provide the financial resources to give us the maximum chance of securing a positive result and to ensure that the decision makers at the West Brom who have been arrogant to enough to make this decision unilaterally without first seeking judicial sanction..are accountable to their members for their inappropriate conduct.

I believe that we will win.. but win or lose this behaviour needs to be challenged.

Tony Wilson (Anthony Ashley Wilson)

Follow Up Comment

Thank to everyone for their positive comments about my post…. in a way I actually feel privileged to be part of it when I consider all the hard work and commitment which has been put into this to date by Mark and others..it is encouraging to know that the fund is heading in the right direction.. . if anyone has any doubts.. I am happy to discuss with them direct why I decided to participate.

Editors Note

To read the response comments from other campaign members please click HERE

To view Tony’s member profile please click HERE

To find out how to get involved please complete the form below

The deadline for submission of instructions has now expired, sorry.

 


Property118 Members vs West Bromwich Mortgage Company Advice, Buy to Let News, Cautionary Tales, Favourite Articles, Financial Advice, Landlord News, Landlords Stories, Latest Articles, Legal, Mortgage News, Press, Property Investment News, Property Investment Strategies, Property News, Property118 News, UK Property Forum for Buy to Let Landlords

UPDATE – 31st March 2014

Since publishing this article our campaign has raised over £450,000 and legal action has now commenced. The official closing date for borrowers to be represented in this action was 28th March 2014. However, it may still be possible to be included in the representative action by paying additional fees to cover administration and Court fees to be added to the list of represented claimants. For further details please Contact Carla Morris-Papps at Cotswold Barristers – telephone 01242 639 454 or email carla@cotswoldbarristers.co.uk

West Brom Tracker Mortgages

Property118 Members vs West Bromwich Mortgage Company

Property118 Members vs West Bromwich Mortgage Company

Borrowers representing 84 mortgage accounts affected by the West Bromwich Mortgage Company 1.9% rake hike to their tracker rate mortgage margins attended a secret meeting of paid up campaign members on 27th February 2014. At that meeting it was confirmed that 420 affected mortgages are currently represented by the campaign group.

Property118 had previously created a secure forum for paid up members of the group to discuss various legal strategies, one of which was a proposal to West Brom to consider arbitration as an alternative to Court action. Each member had paid £240 for each affected mortgage plus a contribution to a campaign marketing campaign.

Arbitration was proposed for tactical legal reasons which were explained by the groups advisers, some details of which must remain confidential for legal reasons.

This would have been significantly quicker and cheaper for all concerned and had massive upsides to West Brom in that the outcome would be confidential. In other words, if West Brom had lost the case, nobody would have “officially” known about it other than those who had already paid to be a member of the campaign group. This would have meant the worst case scenario for West Brom would be losing no more than 10% of their reported £19 million of additional annual profits from this rate hike.

West Brom refused!

This refusal now plays very nicely into our hands for litigation purposes as it will be frowned upon by the Courts, especially if we lose our case and end up having to pay costs associated with the David and Goliath battle. 😉

The attendees of the meeting voted unanimously to proceed immediately with litigation on the basis proposed by (Mark Smith – Barrister-At-Law) as explained below. Thanks were offered to Justin Selig and his team at The Law Department for his sterling work to date in helping us get to this position. Without their help our campaign may never have got this far.

Litigation will commence during the week of 31st March 2014 with the service of Court Papers. This provides a final opportunity for any remaining affected borrowers to commit to the action by Friday 28th March.

We already have more than double the necessary funds on account to pay our own legal team. Mark Smith has agreed to represent borrowers for a fixed fee of £120 + VAT per affected mortgage subject to there being at least 250 borrowers committed. Further details in his Terms of Business and Instruction letter which can be downloaded by completing the form at the bottom of this page.

Existing campaign members are also reminded that they MUST complete and return the instruction form  to Mark Smith to act for them and the required additional funds by 28th March 2014.

The deadline for submission of instructions has now expired, sorry.

Costs Funding

The primary concern of existing members that had to be overcome was their potentially unlimited liability to the West Brom’s legal costs in the event of losing the case and the “open cheque book” often associated with legal cases. It was agreed that all fears could be overcome by creating a fund to be held in a BARCO escrow account (BARCO is the Bar Council – the regulators of Barristers). This account will provide evidence to the Courts that we have sufficient funds on account to settle the other sides costs in the event of losing the case and having an adverse costs order awarded against the group.

The first step of the legal action will be a costs hearing, as part of a “Case Management Conference”. This is where both sides must submit their costs budgets for the case to the judge and where the judge decides upon reasonableness. If either side fails to do this then the maximum they can claim for costs against the other side is the Court fee, i.e. £175! It is extremely rare for judges to award costs in excess of the agreed costs budget.

Our estimate is that based on the number of affected mortgages being represented, and the possibility of more people now wishing to be represented at this stage, the BARCO account could contain as much as double the other sides costs budget. This is why we are so confident about costs not exceeding the amount of funds that will be held in escrow. In the extremely unlikely event of the groups funds being insufficient to meet a potential costs order the group would have an opportunity to withdraw their case and settle the other sides costs to date.

If/when we win, the contents of the BARCO account will be rolled over to deal with all of the costs associated with the inevitable appeal case and if/when that is won the funds will be returned to members. If we lose, the contents of the escrow account will be used to pay costs awarded to West Brom and the balance of funds will be returned pro-rata to members.

The case will be fought on the basis of a representative action. This means that the ruling of the Courts will only apply to those borrowers who have paid to be represented in the case. There will be no free rides!

We fully appreciate that some affected borrowers will not be able to raise the necessary funds in time to be part of this action so there is a Plan B. Affected borrowers who are not represented may have another opportunity to make claims in a few years time. In the meantime they will continue to pay the higher rate and will probably be expected to forfeit any refund of overpayments in return for a no-win-no-fee arrangement. This could be a far more expensive option, hence the reason why so many affected borrowers are so keen to be part of the imminent legal action.

The legal strategy and process we are undertaking will be a very simple one. There will be no witnesses called so there will be no surprise twists such as those often seen on TV where a new witness or new evidence appears at the last minute. On this basis, we anticipate the case, including any appeal, to be concluded before Christmas.

We will only be asking the Courts to rule on two things:-

1) Based on the documentation produced by West Brom, do they have the right to increase the tracker margin?

2) Based on the documentation produced by West Brom, do they have the right to call in loans within 28 days without the borrower being in default?

There has been lots of discussion about whether West Brom did or did not provide all of the documentation they are now relying upon. This is not relevant to our case.

There has also been much discussion about Unfair Terms in Consumer Contract Regulations; again this is not relevant to our case.

It has been questioned whether in fact the mortgages issued by West Brom were indeed trackers, this cannot be denied by West Brom as this is the basis they report them to the rating standards agencies – see this link

The agreed level of funds to be deposited into the BARCO account is £1,144 per affected mortgage being represented. For example, somebody wishing to have 10 affected mortgages represented will need to deposit a further £11,440 into the BARCO account. Existing members will receive a refund of unused funds which they paid into the client account of The Law Department. New members will need to pay an additional premium of £356 per mortgage to the Property118 marketing fund to equalise the financial contributions and efforts of the forerunners of the group.

Therefore, the net payment per affected mortgage for members will be:

  • For existing members who have already instructed The Law Department £994 (assuming a refund of £150 per affected mortgage from The Law Department)
  • For new members the total cost per mortgage to be represented will be £1,500

We have created a simple set of instructions explaining how much you need to pay and who you need to pay it to here >>> http://www.property118.com/simplified-payment-instructions-join-west-brom-action/

Remember, if/when we win you will get more than this amount back when you also factor in 100% of the extra 1.9% interest you have been paying which will also be refunded. The worst case scenario is that you will get none of this money back if we lose. If you can live with that you should proceed.

The reason we have chosen this strategy as opposed to buying ATE insurance is that it costs us much less if we win. We are in this to win this. The above strategy means that we all know what we stand to lose and can proceed with our eyes wide open, confident that our liabilities are limited.

If the balance of the BARCO account associated with this action is less than £250,000 by close of business on Friday 28th March 2014 the legal action case will be aborted, funds will be returned to members within 14 days and that will be the end of the line for this campaign for myself and Property118 – at least for 12 months or more anyway. If necessary we will then take another look at Plan B.

UPDATE – 31st March 2014

Since publishing this article our campaign has raised over £450,000 and legal action has now commenced. The official closing date for borrowers to be represented in this action was 28th March 2014. However, it may still be possible to be included in the representative action by paying additional fees to cover administration and Court fees to be added to the list of represented claimants. For further details please Contact Carla Morris-Papps at Cotswold Barristers – telephone 01242 639 454 or email carla@cotswoldbarristers.co.uk


Campaigns Against Tracker Mortgage Rate Hikes Reach Parliament Latest Articles

David Morris MP and Mark Alexander considering an Early Day Motion at the Houses of Parliament 21-01-2014

David Morris MP and Mark Alexander considering an Early Day Motion at the Houses of Parliament 21-01-2014

The campaigns organised by members of Property118 against hikes to tracker rate mortgage margins moved up a gear yesterday when I was invited to meet with David Morris MP and his aide Andre Walker at The Houses of Parliament. I spent 90 minutes with them in total. I also managed to get a very quick 5 minute meeting in between parliamentary debates with Jason McCartney MP (Colne Valley) who has been very supportive of our campaign in terms of meeting his locally affected constituents and lobbying fellow MPs.

Over 20 MPs have expressed concerns and support for their  constituents affected by the actions of West Brom Building Society and Bank of Ireland. A debate in the House of Commons has already been applied for by two MPs.

Campaigners have been lobbying their MPs over the last few months and much support has been pledged. Many of the MPs wrote to John Westhoff, CEO of the West Brom, but all were fobbed off by similar letters claiming that their rate hikes were legal and necessary to subsidise other areas of there business which have performed badly in recent years. Senior banking barristers and an eminent banking QC have poured over the Terms and Conditions and believe what these lenders are doing to increase their profits is an illegal breach of contracts. In both cases the terms of the mortgage offer letters contractually and legally take precedent over conditions specified in the lenders mortgage conditions booklets which are generic to fixed, standard variable and tracker rate mortgages. It is terms in the more generic booklet that West Brom and Bank of Ireland are ‘hanging their hat on’ in respect of their hikes to the margins being charged to their borrowers over the Bank of England base rate.

Campaigners feel that the mortgage lenders are attempting to use their financial muscle and the disincentive in respect of huge costs to litigate to evade justice but the strategy of these lenders does not appear to be working.

To date, over £100,000 has been raised and lodged with Solicitor Justin Selig which is enough to commence legal action. More will be required to fight a case at appeal which is highly likely as a strategy from the lenders if/when the campaigners win the first round of litigation in the lower Courts. With this in mind, alternative strategies to litigation are being considered to settle the argument out of court in the short term because the MPs cannot progress matters once the judiciary are involved.

As fortune would have it, whilst I was at the meeting David Morris MP was invited to submit a question to Chancellor George Osbourne on Tuesday 28th. Mr Morris seized the opportunity and immediately submitted a question relating to the conduct of mortgage lenders. We should find out later this week whether it is approved.

As if that wasn’t enough from my first visit, I was also introduced to several other MPs between debates. These were only quick introductions but many of them are aware of the campaign due to the excellent lobbying of Property118 members.

The icing on the cake was helping to draft an EDM “Early Day Motion”, which has now been submitted by David Morris MP, which will be publicly available and no doubt of much interest to the press. The more MPs that sign up to support this EDM the more likely it is for the debate to take place and for the motion to be passed. We also prepared a very short briefing note to be distributed to other MPs showing an interest. There is a LOT more to be done on our side too. I need all campaign members, whether directly affected or not, to contact your MP again and to ask them to add their support to Early Day Motion number 976.

I strongly recommend following up any electronic correspondence with a telephone call because MPs are bombarded with thousands of emails every day and they can very easily be overlooked.

To contact your MP please click here, then copy and paste the text below:-

Dear ……

As one of your constituents I am asking you please to add your support to Early Day Motion number 976 as submitted by David Morris MP. Below is the content of the EDM and some background notes for you to consider. Given the importance of this matter I would also request you to apply for a debate. If a telephone call or meeting would help, either with me or the campaign organiser please let me know.

SUBJECT – Conduct of Mortgage Lenders – EDM number 976 

That this house condemns mortgage lenders breaching tracker rate mortgage contracts by unilaterally increasing the margin they charge over the Bank of England base rate in order to increase their profit margins and deliberately targeting borrowers where consumer protection law is ambiguous; and calls on the Government to investigate alleged associated recent activities of the Bank of Ireland and West Bromwich Building Society.

Additional Notes

There are believed to be 2.5 million tracker rate mortgages, i.e. mortgages which track the Bank of England base rate at a fixed margin for a defined period

137,000 readers are following a campaign to expose this scam via the Property118 internet forum as concern that other mortgage lenders will follow suit is increasing

Alleged examples of deliberate misuse of ambiguous consumer protection laws include ….

  • 12,200 Bank of Ireland mortgage accounts whereby a mixture of homeowner mortgages and buy to let mortgage borrowers were targeted – all of which pre-dated the Oct 2008 mortgage regulations
  • 6,700 West Brom Building Society mortgage accounts whereby landlords with 3 or more properties have been targeted – there is no case law to define what would constitute a consumer landlord although there is case law to acknowledge that landlords can be consumers. Therefore, Unfair Consumer Contract Terms legislation may or may not apply and it would appear that the WBBS are relying on affected borrowers not being able to raise sufficient funds to challenge this or litigate other points of contract law.

All comments via the main forums please.

Link to Bank of Ireland forum

Link to West Brom forum

David Morris MP commented “I’m extremely concerned about the fact that mortgage lenders are increasing the margin they make on tracker mortgages. This practise is damaging to the economy, immoral and may even be illegal. The Financial Conduct Authority must investigate this urgently.”

REQUEST FOR HELP!

I expect to be called to London to provide further briefings to both MPs and and the media and intend to use the campaign marketing fund to pay for my travel expenses, wining and dining key contacts and loss of *fee-earning time from other consultancy work, (*capped at a maximum of £500 per day). We need to top this fund up and I am highly reliant on your generosity for this as the people I will be meeting will not be too impressed if the lunch budget only extends to a McDonalds or a Subway! Please donate HERE.

If you haven’t already signed up please complete the form below.

The deadline for submission of instructions has now expired. However, it may still be possible to join the representative action subject to paying Court fees and an additional cost to cover associated administration. For details please email : carla@cotswoldbarristers.co.uk


Complaint to ASA re West Brom Tracker Mortgages Website Advertising Latest Articles

COMPLAINT TO ADVERTISING STANDARDS AGENCY

I have just completed my online complaint to the ASA. It is a five step process. The basis of my complaint was targeted only at the statement of the West Brom website. My thinking is that if we over-complicate matters for the ASA they might decide to refer the complaint to the Financial Ombudsman or the FCA and we know know what a black hole those organisations can be. Therefore, focussing purely of the website advertising, and what I beleive to be a smoking gun case, will hopefully be useful for us to use as evidence in our main legal battle. Needless to say, it will also be a great annoyance to West Brom and very embarrassing for them if/when complaints are upheld.

If you want to do something similar and make a complaint of your own this is the link you will need to get you started >>> http://www.asa.org.uk/Consumers/How-to-complain.aspx

The first 4 steps of the complaint process are very simple to complete, it’s just your details and a few questions to answer regarding the basis of your complaint.

Step 5 of the complaint process is the meaty bit, i.e. the basis of complaint. Below (in this dark blue colour) is what I wrote …..

The West Bromwich Building Society website said

“Tracker mortgages give you the certainly of knowing that the rate you pay will move in line with Bank Base Rates”

I took this at face value, as it would appear 6,700 people who purchased this product did.

Bank Base Rates have not moved for nearly 5 years but West Bromwich Building Society have decided to increase the interest rate on my buy to let tracker mortgage by 1.9% as of 1st December 2013. Therefore, my complaint is the statement on the West Bromwich Building Society website was misleading. This is the sole purpose of my complaint to ASA at this stage.

For further information …..

West Bromwich Building Society are pointing to small print in their Mortgage Conditions to justify this increase and I am taking legal advice together with a large group of other affected borrowers about this. I also believe their mortgage documentation was misleading and that their hike in interest rates is not legal but that’s another story.

You may also wish to note that West Bromwich Building Society also believe they have the right to call in these mortgages within 28 days, even if their customer isn’t in default. They are actually using this as a veiled threat in response to complaints from their customers about the interest rate hike. The legal action group I am part of are also taking Counsels advice on this point as this appears to be out of sync with the rest of the mortgage market. Again there was not mention of this on their website or on their offer documentation. It was another clause buried into their mortgage conditions brochure.

I backed this up with the following link with an explanation that I took this screen shot from the West Brom website and now host the screen shot on my website as evidence for all to see. Link here >>> http://www.property118.com/wp-content/uploads/2013/09/West-Brom-Screen-Shot-21.png Complaint to ASA re West Brom Tracker Mortgages Website Advertising

Since making my complaint to the ASA I have gathered further evidence of the West Brom’s misleading financial promotions for their tracker rate mortgages which appeared on their website back in January 2008. This evidence was obtained via the “Wayback Machine” – see >>> http://web.archive.org/web/20070701010120/http://www.westbrom.co.uk/westbrom/mortgages.category?id=26

All comments via THE MAIN DISCUSSION THREAD PLEASE


Tracker Rate Class Actions Updates Buy to Let News, Commercial Finance Broker Blog, Landlord News, Latest Articles, Mortgage News, Property Investment News, Property News, UK Property Forum for Buy to Let Landlords

Over 1,000 people have registered an interest in the Class Action groups challenging the legality of the increases to tracker mortgage interest rate margins proposed/implemented by West Bromwich and Bank of Ireland. Many of the people who have registered are not affected at this time but are sufficiently concerned about the potential knock on effects to the attitudes of other lenders to make a donation to the Class Action Marketing Fund. We must spread the word to ensure that we win these cases in order to to discourage other mortgage lenders from following suit. Tracker Rate Class Actions Updates

Funds raised towards the legal fighting fund are being held in a solicitors client account which complies fully with The Law Society rules and is protected by client money protection insurance  and the solicitors compensation fund until they are billed.  The objective is to raise sufficient money to be in a position to fund group action court cases and associated legal expenses insurance. No court cases will begin until such time as sufficient funds are raised to protect and limit the liabilities of all participants to the amount of funds contributed up front. If Court cases are not required or are not affordable then any surplus funds held on account will be returned pro-rata to the members of each group.

Latest media coverage in which our campaigns are named/linked

BBC Website

BBC TV News Channel “Your Money” (10 minutes and 18 seconds into the programme)

The Telegraph

iDoStuff

Guild of Residential Landlords

What Sam Saw Today – part One

What Sam Saw Today – part Two

House Selling Advice

Chesterfield Post

Tracker Rate Class Actions Updates

Existing supporters of the Class Action campaign are to be congratulated for their efforts to date.

If you wish to get involved please see the To-Do list below.

  • Complete the Class Action Expression of Interest Form – Link here You will then receive emails advising you what to do next.
  • Please make a donation to the marketing fund to help spread the word – Link here
  • Complain to your lenders and copy in the Financial Ombudsman Service – letter template here
  • email watchdog@bbc.co.uk
  • Write to your local MP – find your local MP via this link several MP’s have already referred this matter to the chancellor of the exchequer or the chairman of the treasury select committee. The more support the better so we need everybody to write.
  • Contact your local newspapers – use this Press Release as a base and add your personal story as the media love case studies with local interest
  • Post articles linking back to Property118 on websites/blogs and post links in Facebook Groups and other online forums

West Bromwich BS Class Action Update

The reasons we started this campaign are very simple:-

1) We believe the actions of West Brom are immoral

2) We believe the actions of West Brom are unlawful, i.e. they have no legal grounds to increase their tracker rate margins

3) We have no wish to subsidise other areas of the West Bromwich Building Society business model

4) We are fearful of other lenders following suit if West Brom are allowed to get away with this

On these grounds we have raised more than enough money to cover the initial legal work and the costs of obtaining Counsels opinion. In fact, after taking these costs out of the funds raised to date we are 27% towards our minimum target fund raising to commence litigation. Now I don’t know about you but if Counsels opinion is that we have a VERY strong case I would definitely consider paying a lot more than I’ve paid already to take this all the way. £240 a case is a tiny fraction of what we all stand to lose, not just in terms of this lender but possibly others too.

In a months time we will have Counsels opinion. These are the scenario’s I have considered.

1) Worst case scenario is that we will be advised that we do not have a case. If that happens, costs to date will be taken from the funds raised and we will all get a refund pro-rata.

2) We are advised that we have a good case but we do not have enough money in the pot to fight it. We will then have to set a closing date for the fund and have a vote amongst members on how much they are prepared to pay if necessary. I suggest a pledge of up to one years worth of savings because if we start trying to set amounts we could be going back and forth forever more if people decide they are are in at one level and out at another. If we still don’t have enough money pledged at the end of such an exercise then it’s possibly game over, i.e. contributions are refunded net of expenses to all named borrowers.

3) We have enough money in the pot and counsels opinion is that we should fight.

We will NOT settle on any basis.

In our opinion, we are more likely to raise the required funds on this basis.

We have a moral duty to do what is right for those who support the values upon which we started this campaign in the first place. Our promise to all who support these values is that we will not sell out on you at any price. We will continue to fight this injustice and we will fight any other lender who tries to follow suit.

Who’s with me?

West Bromwich Legal Action So Far

Tracker Rate Mortgage Class Actions UpdatesWe appointed solicitors to consider the actions of the West Bromwich BS tracker mortgage hike in interest rate margins at the beginning of October. Well over 100 affected borrowers have sent their papers and fees to the solicitor representing the group.

The solicitor acting for the group has been asked NOT to commit chargeable time to respond to individual telephone calls and emails from affected borrowers, this is to preserve funds. All questions should be raised via the Property118 forums to prevent duplication of efforts.

Around £15,000 of the funds raised to date will be used to complete the following steps. The balance will be held towards a Court action fighting fund, the target for which is £100,000 plus.

  1. To seek counsels opinion on the legality of the actions of West Bromwich and to seek advice on the most direct legal options to pursue. The solicitor acting for the group has appointed one of the UK’s leading banking barristers at Stone Buildings London
  2. The solicitor acting will provide template letters for all paid up members to send to the solicitors who acted in the transaction. This letter will advise the solicitors to put their PI insurers on notice and also ask the solicitors to comment on why they did not offer advice on the clauses now being used by West Bromwich BS.
  3. A further template letter for affected borrowers to submit as a follow up to initial complaints to the Financial Ombudsman service will also be prepared by the solicitors acting for the group and will be based on counsels opinion. There is no rush to do this, we have up to six months, hence the decision to await Counsels opinion in respect of the best possible legal arguments to present.
  4. The solicitor acting on behalf of the group has already sent  a letter to Andrew Tyrie MP, Chairman of the Treasury Select Committee. A response is awaited.
  5. The solicitor acting on behalf of the group will submit formal complaints to the Financial Conduct Authority and the Financial Ombudsman Service once Counsels opinion has been received. A further complaint may be submitted to the Advertising Standards Authority dependent upon counsels advice.

Bank of Ireland Class Action Update

More pressure needs to be put on the Financial Conduct Authority to obtain their own independent advice as to the legality of the actions already implemented by the Bank of Ireland.  They received our barristers opinion, sent it to BoI who obtained comment from their QC and then decided to do nothing further. Our solicitor is of the opinion that the FCA response was a “whitewash” as they did not seek their own independent advice prior to making a decision. The more noise we can make about this the better as we need them to reconsider their position. Pressure is intensifying from the Treasury Select committee to lean on the FCA as more MP’s get embroiled in the debate following complaints from their constituents. Fundraising will recommence in due course, in the meantime, a QC working at the same chambers as the barrister we instructed has volunteered to review the opinion of our barrister and the responses from the FCA and the Bank of Ireland.

Fees applicable to the Bank of Ireland Class action are likely to be £240 per property, less any fees paid to date. We will advise you when the fundraising re-commences. Our objective is to significantly increase the numbers of interested parties before fund raising recommences. We are quietly confident that the promotional activities described in this update article will increase the numbers of interested participants.

The Financial Ombudsman Service are yet to make a decision based on the formal complaint regarding the actions of Bank of Ireland. It has been 7 months now since the FOS opened this case and their are still pontificating how to deal with it. If you believe this is an unacceptable delay the address to write to is The Financial Ombudsman Service, South Quay Plaza, 183 Marsh Wall, London E14 9SR.

In both cases

Preference remains to persuade a regulator to take the cases to Court as this will significantly reduce costs to affected borrowers.

Disclosure – in group legal action cases it is normal for both sides to be aware of each others legal arguments before a Court case commences. Therefore, there is no risk to debating legal points in open forum. There is, however, a positive upside in that it continues to provide media with new stories and people to contact for case studies. Exposure is what we need to build the group.

The Marketing Fund

The purpose of the marketing fund is to increase awareness of the campaign. This fund is held separately to the Class Action legal fighting fund which is held in a solicitors client account protected by client money protection insurance. The marketing fund is administered by Innovative Landlord Solutions LLP which is the owner of Property118.com.

Initiatives funded so far include sending letters to a database of mortgage brokers and financial advisers. The database was rented from Equifax and we chose to send letters as opposed to emails in order to guarantee delivery. We have also completed significant Search Engine Optimisation to make it easier for people surfing the internet to learn about our campaigns.

A Press Conference, open to paid up members of the Class action Group, and those who have contributed to the marketing fund, will be organised shortly after we have receive Counsels opinion on the West Brom case and the QC’s opinion in respect of our submission of the BoI case to the FCA, their response and the BoI’s QC’s response to the FCA. All responses are anticipated to be received towards the end of November with the Press Conference being held in London shortly thereafter. Surplus funds in the marketing fund, which are still continuing to flow in nicely, are being held towards this event. Funds raised since our first call for donations to a Marketing Fund on 3rd October are now approaching £4,000 of which £3,375 has been utilised to date.

Facebook Marketing

We have done some research and we are able to contact in the region of 230,000 to 420,000 people via Facebook for a budget of £800. These will be friends of friends of people who have “Liked” the Property118 Facebook page. On the basis that people socialise with like minded people this could be an excellent target audience.

Details via this link >>> http://www.property118.com/wp-content/uploads/2013/10/Facebook-Promo.png

The beauty of this type of advertising is that we can add credit to reach more people as and when we receive donations.

If you wish to donate to the the fund please see >>> http://www.property118.com/much-appreciated/ and send us an email to let us know that you wish the funds you have donated to be used to fund Facebook marketing. The email address to write to is mark@property118.com

All comments via the main discussion threads please.

Bank of Ireland

West Bromwich Building Society

If you haven’t already signed up please completed the form below.

The deadline for submission of instructions has now expired. However, it may still be possible to join the representative action subject to paying Court fees and an additional cost to cover associated administration. For details please email : carla@cotswoldbarristers.co.uk


Contra proferentem mortgage conditions Advice, Buy to Let News, Cautionary Tales, Commercial Finance, Financial Advice, Landlord News, Landlords Stories, Latest Articles, Mortgage News, Property Investment News, Property Investment Strategies, Property News, UK Property Forum for Buy to Let Landlords

Unless you are a qualified contracts lawyer who has also studied Latin you will probably not have a clue as to how contra proferentem mortgage conditions affect you. I have spent the last two weeks getting my head around it as it was a key point in the barristers opinion for the Bank of Ireland Tracker Mortgage Class Action which has stalled due to all funds raised for that campaign having been exhausted. Therefore, for the benefit of everybody with a tracker mortgage who may be affected by a hike in their tracker mortgage margin at some point, and in particular to those affected by the decisions of West Bromwich Mortgage Company and the Bank of Ireland I offer this laymans interpretation and my thoughts on how we should progress.

Very simply, the contra proferentum law is created to enable judges to decide which conditions apply if contractual conditions are in conflict. In other words, if the contract has two or more conditions and they don’t all say the same thing one of the conditions will apply and the others will not.

The relevance of this is that West Bromwich and Bank of Ireland have conditions in their mortgage documentation and some conditions contradict others.

The law goes on to say that the judges interpretation of what the contract means will be the condition(s) which are in favour of the person to whom the contract was presented. To put it another way, if your mortgage conditions were presented by West Bromwich or Bank of Ireland the judge will rule against them because they wrote the contract and the most favourable of the conditions will be applied to you. 🙂

There are, of course, several more legal arguments our lawyers could throw at the enemy, however, in my opinion the contra preferentem argument is without any shadow of doubt our best shot

Other legal arguments will only suit some of our Class Action Group. For example, there appears to be no legal definitions of a sophisticated landlord but West Bromwich think it is anybody with more than three properties. Let’s say we win that battle and the Court decides it’s six – anybody with seven or more isn’t going be too happy are they? I will be one of them! Also, what good would that do for those affected by Bank of Ireland or by any other lender who tries this on? Remember, Bank of Ireland has a different criteria and is not using the sophisticated borrower argument. Other lenders will no doubt make up their own excuses too. What we need is a win which will affect ALL mortgage lenders.

Many people are arguing that they didn’t receive the Mortgage Conditions from their lenders. Well sorry folks, maybe you did, maybe you didn’t, but I can assure you that you signed a piece of paper before your mortgage completed to say that you did. The Mortgage Deed I signed for my West Bromwich mortgage states “By signing this Mortgage you confirm the terms of the Standard Conditions of Offer, the Special Conditions and the Mortgage Conditions”.

There are many more arguments which I could play devils advocate with which have been raised on our forums. With a bit of thought I reckon I could win most of the arguments and I’m not even a qualified solicitor. I am, however, in the same boat as you so please don’t shoot the messenger. I’m also affected by these increases and I’m doing everything I can to make sure we win this fight. In my case that’s been 18 hour working days for the last three weeks and a lot more time on the Bank of Ireland case since it reared its ugly head earlier this year.

That’s why I would like Justin and the barrister to lead with what I believe is our best shot – contra proferentem mortgage conditions.

If we ask our lawyers to look into every legal argument we have presented on our forums we will run out of money before we get to first base. What I would prefer is that we fight the one universal truth which is that our mortgage terms are contra proferentem. If we lose and we still have some money left there’s nothing to stop us appealing on other grounds as well.

For the above reasons, do you agree that we should ask our legal advisers to focus on contra proferentem mortgage conditions?

There are lots of other things we can do as a group to be a thorn in the side of these lenders in the meantime. For example, I love the PR campaigns and lobbying we are sharing ideas on. We must continue to win the hearts and minds of the media and every centre of influence we can think of. I also applaud the tactics being used to make these lenders lives a misery, for example the Subject Access Requests. Perhaps the most important thing we can do whilst we wait for the legal bods to advise us is to spread the word. We need to get every borrower we can find with a tracker mortgage to sign up. There are also plenty of other landlord groups who can help us to do this and it’s in all of our interests to put as much pressure on them as possible to get involved and spread the word amongst their members.

Contra proferentum mortgage conditions as I see it

I owned a substantial number of buy to let properties at the time of my mortgage application and still do. The chances of me proving that I was not a sophisticated landlord are very slim but I do have an argument to suggest that property investment was not my line of business at the time I took the mortgage. All of my properties were professionally managed in order to allow me to focus on my career as a commercial finance broker. I did not consider myself to be a professional investor at the time I took out this mortgage, the purpose of investing into a property portfolio was to provide for my retirement. I don’t want Justin or the barrister to push that angle though, I think it’s a waste of money as everybody’s situation will be very different.

Neither my mortgage broker nor my solicitor were aware of the rights of West Bromwich Mortgage Company to increase the premium they charge on my tracker mortgage rate. I did read the Mortgage Conditions brochure at the time  and at the time I sincerely believed that section 5 of the Mortgage Conditions was not applicable. Note that I am also a qualified mortgage adviser and IFA. I believed that section 5 of the mortgage conditions booklet was only relevant to mortgages written on the building society’s standard variable rates, which do not track the Bank of England base rate. This was supported by the marketing materials being used by the West Bromwich to promote their tracker mortgages. Also, there was no mention of such a vital clause in either their KFI document or their offer letter. Clearly my solicitor was mislead too. I suspect everybody who was affected by the Bank of Ireland rate hike would also say the same thing.Contra proferentem mortgage conditions

So having established that I read the booklet and I signed to agree to all of their terms, including those in their Mortgage Condition booklet, what makes me believe West Bromwich are still in the wrong?

  1. Their website said, and to this day still continues to say “Tracker mortgages give you the certainty of knowing that the rate you pay will move in line with Bank Base Rates.”
  2. My offer letters states “After 30th June 2010 your loan reverts to a variable rate which is the same as the Bank of England Base Rate, currently 5%, with a premium of 1.99%, until the term end”

Logic tells me the above are in conflict with Section 5 of the Mortgage Conditions booklet which I signed and received. On the basis that West Bromwich produced the booklet, their website, and the Mortgage Deed I believe there is a clear case of conflicting conditions and ambiguity, hence the conditions they are relying upon are contra proferentem. On that basis, a judge MUST rule against West Bromwich as they are the originators of the documentation. It’s not like we are asking for the mortgages to be written off, all we want is the terms and conditions we believed we had signed up for.

We MUST win a Court Case before even more lenders follow suit.

The deadline for submission of instructions has now expired. However, it may still be possible to join the representative action subject to paying Court fees and an additional cost to cover associated administration. For details please email : carla@cotswoldbarristers.co.uk


Now I’m worried Birmingham Midshires will raise their Tracker margins Latest Articles, UK Property Forum for Buy to Let Landlords

I’ve been following the news on this site concerning West Bromwich Building Society’s increase in Tracker margins and the Class Action. I thought I would check through our ‘Lifetime Tracker’ mortgage offer from Birmingham Midshires. I was in for a shock.

We’ve loved our trackers from Birmingham Midshires (BM) and have been enjoying rates less than 0.5% above the Bank of England Base Rate, which the ‘Illustration’ document reported would last ‘For Term’. Of course, we paid a handsome arrangement fee to secure the rate. The tracker margin seemed unchangeable, but West Bromwich Building Society’s move to increase their tracker rates suggests that anything is possible. Birmingham Midshires BM Solutions

The mortgage offer from BM in October 2006 does say “The mortgage will be charged interest at: a variable rate which is 0.4% above the Bank of England Base rate, currently 4.75%, for the term of the loan..” The accompanying Special Conditions do not seem to mention interest rates. It was the Standard Offer of Advance Conditions (2004) that contained the shock. Under the section ‘Interest’ it states that

“Unless you have a fixed rate mortgage …… we may change the interest rate payable on your loan at any time for any of the following reasons:
(1) to reflect changes in market conditions outside our control
(2) to reflect changes in the cost to us of raising the money we lend to customers:
(3) to reflect changes in general lending practice by other major lenders (including the terms on which mortgages are offered by them);
(4) to maintain or improve the general market position of our products in all areas of our business;
(5) ……….”

So BM can change the interest rate almost at their whim? In particular reason (3) is scary if West Bromwich and the Bank of Ireland get away with changing their tracker margins to BTL customers.

The text seems strange to me to describe their freedom to change a tracker margin. It seems to be the considerations for changing a traditional Standard Variable Rate of a mortgage. If it related to a Tracker margin I would expect phrases like ‘exceptional circumstances’ to be used. Also why does it refer to the interest rate rather than the more relevant tracker margin? The obvious reason to change the actual interest rate is to track a BoE base rate change, but this is not included. Why?

(The accompanying General Mortgage Conditions 2004 booklet merely refers to the ‘offer document’ on changing interest rate.)

A further confusion arises because there is no text that I could find which explains which of the various documents take precedence. The odious Standard Offer of Advance Conditions started with the instruction to “read them in conjunction with ..” the other documents and then the statement “Together these form the offer letter ..”.

Other Property118 posts suggest that West Bromwich had an even more messy set of documentation for the tracker offers which are now being changed. For example, they didn’t refer to their special conditions booklet, which BM got right in my case.

So I’d guess BM are waiting and watching on the outcome of the West Bromwich’s move.

Are you worried as well? I have contributed to the funding of the Class Action campaign despite not having any West Bromwich or Bank of Ireland mortgages.

The deadline for submission of instructions has now expired. However, it may still be possible to join the representative action subject to paying Court fees and an additional cost to cover associated administration. For details please email : carla@cotswoldbarristers.co.uk


Marketing Fund for our Class Actions against tracker mortgage margin increases Buy to Let News, Landlord News, Latest Articles, Mortgage News, Property Investment News, UK Property Forum for Buy to Let Landlords

Several people have left comments on our forums or emailed me personally to say that they are not affected by any of the tracker mortgage rate rises at the moment but want to contribute to a fund to help discourage other lenders from following suit.

I am concerned that the Class Action against BoI appears to have stalled and I am keen to get this re-started at the earliest possible opportunity.

The starting point for this is to promote what we are trying to achieve in order to reach the remaining 12,300 borrowers affected by the BoI increases.

We need to put a lot more pressure on the FCA to seek their own advice based on our barristers opinion and the defence presented to them by the BoI.

We believe the FCA’s response was a whitewash.  They have simply used the BoI response to our case as a reason not to pursue it.  They have not obtained their own independent advice so the FCA is not acting as an independent arbitrator.  The BoI response is a note from their barrister who they asked to find ways round our argument.  It is not an independent review of the actions of BOI. The FCA has not given us a chance to respond to the BOI arguments. They have simply taken their version and gone with it.  Much of their arguments are shaky to say the least.

I am confident the announcements from West Bromwich Building Society and the outrage from borrowers and associated press coverage will strengthen our case to FCA to reconsider their position but I also feel we must press on with matters ourselves and recruit more support from the industry by reaching out to more affected BoI borrowers.

To raise the game I would like to post a letter to every mortgage broker in the UK to let them know about our Class Action campaigns against West Bromwich Building Society and the Bank of Ireland. I can rent a database mailing list of all their names and addresses from Experian or Equifax and I have an established relationship with a company which will mail-merge and print the letters, put them into envelopes and post them for 39 pence each including postage. There are thousands of brokers, I will find out exactly how many tomorrow when I hear back from Experian/Equifax.

Most mortgage brokers will have received telephone calls from concerned clients but may not know about our Class Action campaigns. The best most of them will have been able to do is advise their clients on the viability of remortgaging and in most cases this will not be justifiable even with the rate hike to the tracker margins.

Having been a mortgage broker myself I know the value of being helpful to clients in distress as it results in goodwill and referrals. Brokers will also be concerned about loss of credibility and the potential of losing business and income if they are not seen to be able to help. If brokers know about our campaigns they will refer their clients to us.PR Fighting Fund for our Class Actions against tracker mortgage margin increases

Once we have a lot more people signed up a new plan of action will be formulated and details of costs to take part will be distributed. The Class Action funding for the West Brom case has been costed out to £240 per property. To keep things fair to all those who have contributed so far, existing contributions will be deducted from the amount due at the next round of fund-raising.

Ideally I’m hoping that you will donate £50 to the marketing fund mentioned above, less is fine if you can’t stretch to that, more is obviously much better.

Would you be prepared to help fund this?

If so please PLEASE CLICK HERE


Legal Advice – West Bromwich Building Society Class Action Advice, Landlord Action, Latest Articles, Legal, Property118 News, UK Property Forum for Buy to Let Landlords

As you will be aware, we are actively looking for a suitable course of action to oppose the planned increase in the interest rate charged on your mortgage by West Bromwich Building Society (WBBS).

I would like to set out our plan below as to how we intend to take this forward:-

  1. We need to establish the exact conditions and legal arguments WBBS is using to justify the increase. The first thing we are doing is writing a letter on behalf of everyone who has contacted us to ask WBBS this question.  In particular, whilst we have seen a sample offer letter which of course makes no reference to the ability to increase the interest rate in the manner they are proposing to do, we have seen their terms and conditions which does include this term (however vague it may be).  We need to understand the basis under which WBBS believes those terms are incorporated into the mortgage contract.
  2. We also need a complete set of documentation which would include any promotional material you may have from WBBS, the completed application form, the key features document, the mortgage offer letter and any other document you have received on the grant of the mortgage.  We would also like to know how many investment properties you owned at the time you took out your mortgage.  This may be helpful in countering any arguments regarding your status as a consumer or professional borrower. If you have not retained copies of all of this documentation please send us copies of everything you have.
  3. Once we have this response from WBBS and a full set of documentation, we will instruct a barrister to provide us with a legal opinion on the merits of pursuing a legal action against WBBS to prevent them from imposing this increase.  There are a number of legal remedies available and we will identify the most suitable ones to pursue.  We are also considering the merits of providing a template claim form and particulars of claim to allow you a cost effective way of bringing a claim against WBBS in the small claims court.
  4. At the same time, we will prepare a template letter for you to send to your solicitor who acted for you on the loan.  At the time you took out your loan, your solicitor would have had a duty to report a term as significant as the one WBBS is relying upon to you and you may have a negligence claim against them.  The letter will ask them to put their insurers on notice with regards to the potential claim.  We will also provide you with  a template complaint form to lodge your complaint with the Financial Ombudsman Service.
  5. Following receipt of the advice from the barrister we will start the appropriate action.

Obviously all of the above costs money.  Our budget for steps 1 – 4 above will be in the region of £15,000.  We will therefore be seeking a payment from you of £240 to cover steps 1 – 4.  Any excess funds received will be used to fund Step 5. If you have more than one loan from WBBS then this sum is payable per loan.

We will have a better idea of the cost of step 5 once we have received the barrister’s advice.  The cost to you will depend on how many people sign up – obviously the more there are, the less it will cost each of you. Legal Advice - West Bromwich Building Society Class Action

In order to move forward, please will you therefore do the following:-

  1. Send your documentation to (outlined in 2 above) to: West Bromwich Action Group, The Law Department, 7a Wellington Road, London NW10 5LJ
  2. Complete and return our instruction form (download here) together with copies of two pieces of identification for you.
  3. Pay the sum of £240 into our client account. Details as follows: Account Name: The Law Department Client Account,  Account Number: 06658997, Sort Code: 12 24 82. Alternatively, you may also send a cheque accompanying the papers referred to above. Cheques should be payable to The Law Department Client Account.

Upon receipt of all of the above, you will receive an acknowledgement from us and the template letters.  We will update the Property118 forum regularly with timelines as to when we expect to receive the advice from the barrister.

Regards

 

Justin Selig

The Law Department

7A Wellington Road London NW10 5LJ

The Law Department is regulated by the Solicitors Regulation Authority (SRA number 441085).  The Principal is Justin Selig who is a solicitor regulated by the Solicitors Regulation Authority. 

 


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