Tag Archives: mortgage

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

 


Remember our background is in BuytoLet and Commercial finance Buy to Let News, Commercial Finance, Latest Articles

PartnersRemember our background is in BuytoLet and Commercial finance Mark, Mike and I met through the common background of BuytoLet and Commercial Finance. Over the years through The Money Centre and now Property118 we have literally helped 10s of thousands of Landlords, developers and investors start and grow their property businesses.

Unfortunately we are now old enough to have seen, done and bought the t-shirt for most things in the property finance industry including Mark and Mike being founder members of the NACFB (National Association of Commercial Finance Brokers) and working with Nationwide Building Society and Paragon Mortgages on the concept of Forward Buying Facilities.

We have been sharing our experiences and strategies for property finance as much as we can with readers, but there is always a time when you just need some help.

To start with we have our own BuytoLet mortgage sourcing system and calculator, which we designed ourselves and I keep updated. This will help you see how much you could borrow, what the costs would be and which are the most popular Lenders and Products.

We have a team of highly experienced NACFB member commercial finance Brokers who can advise you on and source the best Commercial, Development finance and BuytoLet deals.

If you need help with…

Buy to Let mortgages  : info@property118.com

Commercial Mortgages CLICK HERE

Development Finance CLICK HERE

Bridging Finance CLICK HERE

…. or guidance regarding property finance you can email us on : info@property118.com Call Property118 on: 01603 489118

Or contact me directly on npatterson@property118.com.


Skipton Building Society Legal Action Advice, Buy to Let News, Cautionary Tales, Financial Advice, Latest Articles, Legal, Mortgage News, Property Investment News, UK Property Forum for Buy to Let Landlords

In 2010 the Skipton Building Society broke a promise to over 60,000 mortgage account holders. 

The basis of that promise was that their mortgage rate would never exceed 3% over the Bank of England base rate – it did – CONSIDERABLY!Skipton Building Society Legal Action

The hike in monthly payments for a person with a £150,000 interest only mortgage has been around £181.25 per month!

Affected borrowers include both home-owners and buy to let landlords.

At the time a small group sought legal advice but insufficient funds were raised to challenge the matter in Court. Looking back at what happened I can only assume this was due to lack of marketing expertise within the campaign group which set out to challenge Skipton.

Given that the rate hike occurred over four years ago the Skipton probably think they have got away with this and are home and dry. Several borrowers have sold their properties or refinanced onto different deals but this makes no difference, they all have a potential claim for compensation.

Saqib Mahmood

Saqib Mahmood – affected borrower

Saqib Mahmood, a non-practising Barrister was affected by the rate hike to his personal mortgage and another on a buy to let deal. Mr Mahmood was part of the initial campaign group and admits “the campaign got nowhere due to lack of marketing expertise. The case we had was strong and Skipton have already capitulated for one borrower to avoid Court Action. I am delighted that Mark Alexander and his team at Property118.com have picked up the gauntlet on this one. I am also affected by the West Brom rate hike”.

Mr Mahmood was also keen to point out what he refers to as ‘the Gerald Ratner moment of the Skipton CEO’. This dates back to 5th March 2009 when the Bank of England base rate fell to 1%. At the time the Skipton chief executive David Cutter told FT Adviser “We have pledged our residential SVR will never be more than 3 per cent above base rate and, even with this at its lowest level for 315 years, we will honour our promise.” – LINK

The Legal Action Campaign Against Skipton Building Society

On the back of organising a successful campaign which raised over £450,000 to mount a legal challenge against the West Bromwich Mortgage Company (whose borrowers are affected by a similar issue) Property118.com has sought Counsels opinion on the conduct of Skipton Building Society. Counsel is so confident that he can get the Skipton’s decision reversed if the matter goes to Court that he is willing to work on a “no-win-no-fee” basis to achieve this. His objective will be to get the terms enforced and claim compensation backdated to the date of the increase. However, this will be subject to recruiting borrowers with a minimum combined total of 500 affected mortgage accounts.

NOTE – No-win-no-fee agreements are also known as a CFA (Conditional Fee Agreement) or a DBA (Damages Based Agreement).

The case will be run on similar terms to the legal action against West Bromwich Mortgage Company, i.e. one borrower will represent all those who instruct Counsel to challenge the legality of the rate hike. Any Court order will only apply to the mortgage accounts represented by the legal action. In other words, there will be no free rides.

There will be two representative legal challenges, one on behalf of consumers (i.e. homeowners and landlords with only one buy to let mortgage) and the other on behalf of landlords with two or more buy to let mortgages.

The Barrister we have engaged is Mark Smith of Cotswold Barristers. This is due to his experience in these matters having taken on the UK’s largest ever direct access barristers case against the West Bromwich Mortgage Company.

Costs and mitigation of risk

Cotswold Barristers will administer the action, Innovative Landlord Solutions LLP (the owners of Property118.com) will be responsible for driving the campaign and associated marketing.

We are not asking anybody to part with any money at this stage. However, to fund the campaign, at some point, we will need to begin fundraising to pay for administration and marketing. We will let you know more about this in due course.

Once an initial target of 500 instructions has been obtained, pre-action protocol proceedings will be initiated and papers will be served to the Courts 90 days thereafter. This 90 day period will be known as the Countdown period.

Mark Smith (Barrister-At-Law) will earn nothing unless he wins the case or arranges a settlement for the clients he is representing.

Skipton No Win No Fee

During the Countdown period Counsel will also organise ATE insurance or litigation funding to protect claimants against adverse costs in the event of the legal action failing and the others sides legal costs being ordered to be paid by the group. The case will not proceed if this risk cannot be mitigated, either by these routes or by self-insurance, a model that has worked with great success in the West Brom case.

Legal Action Objective

The objective of the legal action is for the 3% interest rate cap to be Court ordered and backdated to the commencement of the affected mortgages. In other words, those who sign up to this action could receive a lump sum refund (less costs) and lower mortgage payments moving forwards. If the barrister fails to achieve this objective he will be paid nothing for his efforts. If the case succeeds a percentage of the overpayment will be retained to pay ATE insurance, other expenses, and Counsels fee.

For more details please search Google for “Property118 Skipton Building Society Legal Action”

To register your interest please complete the form below.

Legal Action - Expression of interest form

You will not be committing to anything by completing this form but please only do so if you are an affected borrower, or were previously affected if your mortgage with Skipton building Society has been redeemed.

 


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


Bank of Ireland Tracker Rate Legal Campaign Fundraising re-launched Latest Articles

The Bank of Ireland Tracker Rate Legal Campaign began in March 2013.

History to date

100 affected BoI borrowers each paid £150 plus VAT into an initial legal fees fighting fund and instructed Justin Selig of The Law Department to obtain Counsels opinion on the merits of our case.

Consensus of legal opinions was that regulators should fight the case on several bases including Unfair Terms in Consumer Contract Regulations.

Detailed complaint letters were prepared by The Law Department with assistance of Counsel and submitted to the OFT, FOS and the FCA.

The OFT immediately passed their case over to the FCA.

The FCA sought our permission to send our complaint to the Bank of Ireland on the understanding that we would be copied into their response. BoI employed a QC to respond to the FCA and our legal team duly received a copy which was “wishy washy” to say the least. Nevertheless, the FCA felt they had concluded their duties and didn’t consider our case any further.

The FOS are still prevaricating after 10 months!

The complexities of the case lead us to believe, at the time, that it was unlikely that we would be able to raise sufficient funds to progress to Court. Therefore, fundraising was suspended whilst we re-grouped to consider our options. Nevertheless, the PR battle has progressed well on the back of a very similar case affecting borrowers of the West Brom Mortgage Company. A few hundred additional borrowers have completed an “Expression of Interest” form in respect of taking legal action against the Bank of Ireland since the fundraising was suspended. These people have paid nothing.

Moving forward

Those members who paid fees into the legal action fund have been briefed on considerable work undertaken by The Law Department, Counsel and even a QC, all of which have been working without payment since fundraising was suspended. Given the success of the fundraising for legal action against the West Brom Mortgage Company and the advice and strategies agreed between the enhanced legal team we are now far more confident that funds will be raised and that privately funded litigation will be successful.

To obtain a copy of the briefing which was sent to clients who instructed The Law Department, so that you can make a decision of whether to be a party to ongoing legal action, will require you to instruct The Law Department and make an initial payment of £150 plus VAT (i.e. £180 in total).

Payment can be made my cheque payable to “The Law Department Client Account” or by electronic transfer to:

Account Name: The Law Department Client Account

Account Number: 06658997

Sort Code: 12 24 82.

Reference: your full name

To instruct The Law Department you will also need to complete and return a letter of instruction and return it with the following documentation:-

  1. Proof of identity – copy passport of driving licence
  2. Proof of residence – a utility bill for your home address within the last three months
  3. A copy of your mortgage offer letter
  4. If available, a copy of any terms and conditions and other literature you have obtained in connection with your mortgage. This includes and marketing literature.
  5. Link to Letter of Instruction Template HERE

On receipt of the above you will receive further details of advice and strategies. You will then be given the option of whether to commit to litigation or not.

Proceeding to litigation

This will require 150 people to each pay an additional £500 into The Law Department client account as a gesture of commitment and for each affected borrower to agree to a further potential liability of £1,000 if/when litigation commences. If the number of instructions is greater than 150 then the liability will fall pro-rata, for example, if there are 300 instructions the additional potential liability will halve.

If legal action is aborted funds paid will be refunded less costs shared pro-rata.

Our legal team are confident of a positive outcome if sufficient funds can be raised/pledged to commit to further legal action. Bank of Ireland Tracker Rate Legal Campaign Fundraising re-launched

Secure Forum

Members who agree to proceed to litigation on the above terms will be granted access to a highly secure internet forum. The forum operates on the same technology as electronic banking, is hidden from search engines and has several additional layers of security. The purpose of this forum will be to share confidential, commercially sensitive and legally privileged strategies and for members to ask questions, either via private messages or via the secure forum where Q&A’s are likely to be of interest to all members. The private messaging service will also enable members to communicate in confidence, and securely, between themselves, e.g. to swap telephone numbers.

To-Do List – 4 simple steps

1) Tell everybody you know to support the marketing campaign (details below)

2) Share this post via your social networks (see icons at the bottom of this page)

3) If you use Twitter please re-tweet these Tweets…


4) Marketing

The success of our campaigns are highly dependent upon quality marketing including PR and meeting with centres of influence. Property118 operates a “not for profit” business model and is, therefore, totally reliant of donations to fund marketing and other activities such as the creation and ongoing hosting our the above mentioned secure forum. Whether you are immediately affected by a tracker rate hike or not, it is in your interests to support the Property118 marketing fund to raise awareness of important issues which could affect all landlords and to discourage lenders which YOU have tracker rate mortgages with from hiking your tracker rate margins. For further details please CLICK HERE.

All comments via the existing Bank of Ireland discussion thread please CLICK HERE


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


Property Research Tool Latest Articles

UK Property Research Tool
What you need to know and where to find the information

This Property Research Tool is for the benefit of all property buyers, landlords, tenants, owner occupiers and professional advisers associated with property.

Thanks to business sponsors and Property118 Members for their incredibly generous donations making the development of this Property Research Tool.

Property Research generally begins online

Far too many people fall into the trap of not doing proper online research, they see a property they fall in love with or meet a sales person they trust and the deal is done. For those of us who have learned our lessons the hard way, it still takes a long time to wade though websites to complete thourogh due diligence. The really annoying part for me was finding each website individually and then having to enter the same postcode into each one over and over again to find the right pages. For these reasons I wanted to have a system built as a convenient Aide-mémoire (check-list) for every internet user to be able to use and to provide access to to the websites containing vital information with the minimum number of clicks. Property Research Tool

Essentially the Property Research to is a pop up page, called a modal, which consolidates key information used by landlords and other property purchasers to assess properties. Any website can incorporate this technology free of charge. The functionality works best with Google Chrome and Safari internet browsers.

The only data input for users is the Post Code of the area. The key benefit is the ability to access all information required to complete desktop due diligence without having to remember visit multiple websites, thus saving considerable time and effort. The information is called from several websites which provide insight into the location being searched.

Enough of me trying to explain what it is, why not see for yourself?

If you run a website yourself why not write a review and grab the embed code to install the Property Research Tool functionality on your own website? We even have a widget which creates a “call to action” button (like the one below) which you can size to your requirements.

Want to learn even more?

My buy to let property investment strategy is documented and constantly updated in the Advice section of this website. To get back to the main menu >>>

 

Landlords Buy to Let Property Investment Strategy


Funding for Lending Scheme withdrawn for household market Latest Articles, Property Market News

The Bank of England have withdrawn their support for the Funding for Lending Scheme, but only to the household market.

The Funding for Lending Scheme (FLS) has been successful in reducing the cost of lending for banks in the mortgage market and contributed to a fall in the cost of borrowing to homeowners. However the Bank of England (BoE) have decided to pull back on stimulating mortgage lending by stopping the FLS scheme which allowed banks to borrow £1 from the BoE at very low rates for every £1 they lend to households.

The concern is the impact a fall in house prices would have on household and bank balance sheets if average household debt was to continue to rise. This was triggered by the latest three month figures showing average  house prices have increased by 6.9%. The BoE did comment that this was mostly localised to the South East, but they were “concerned about the prospective evolution of the market in the absence of some of these changes.”

The potential risk to UK financial stability as borrowing grows in the housing market is a consideration rather than an immediate fear and why it is prudent to take the foot off the accelerator now, but since the credit crisis the Banks have all recapitalised, so the long term risks to their balance sheets and a future crises is now much lower.

£17.6bn was withdrawn under the FLS in 11 months by banks and building societies, but lending to businesses continues to decline.

The FLS will continue to provide support to business lending by offering £5 of cheap BoE funds for every £1 banks lend and with the target for these funds skewed towards SMEs.

Mr Carney said “the changes announced today refocus the FLS where it is most needed – to underpin the supply of credit to small businesses over the next year – without providing further broad support to household lending that is no longer needed.”

The Bank of England are being cautious with the continued recovery not to over stimulate one market by using the tools they have at their disposal with a light touch.

As ever though it is always more complicated with London being the driver of the market growth and a unique economic micro climate compared to the rest of the country. Might a possible alternative or additional solution be making foreign investors pay Capital Gains Tax. This would certainly take some heat out of the London market and increase tax revenues, but by how much, and do we need foreign investment into the country more than the problems it causes in one localised market.

Answers on a postcard please (well actually comments below would be easier).Funding for Lending Scheme


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


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