West Bromwich Building Society Tracker Margins Legal Action

This is what I have asked my property partner to send to his MP . He as also passed it onto a friend of his . He owns property but as far as I know is not affected by West Brom but does have tracker buy to lets

Dear MP

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 http://www.property118.com/bank-of-ireland-increase-differential/37002/

Link to West Brom forum http://www.property118.com/west-bromwich-building-society-mortgage-company-increase-tracker-margins-legal-action/43657/comment-page-353/#comment-36933

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.”

Conduct of Mortgage Lenders
Having been lobbied heavily by their constituents Jason McCartney and David Morris are both delighted with the cross party support of EDM976 regarding the Conduct of Mortgage lenders, there are 39 signatories as of 6th February 2014 – see http://www.parliament.uk/edm/2013-14/976

The background to this is that at least two mortgage lenders have used ambiguities within consumer protection legislation to increase their profit margins on some of their tracker rate mortgage products for both homeowners and small buy to let landlords. For example:-

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.
Andrew Tyrie, Chairman of the Treasury Select Committee, put massive pressure on the FCA to intervene when the Bank of Ireland first announced in plans in March 2013. However, the FCA refused to take the case to Court or even to seek independent legal advice on the detailed complaints put forward by the legal team of a campaign group organised by the internet forum Property118.com. The FCA also provided assurances to Mr Tyrie that the Bank of Ireland was a “one off” scenario. However, shortly thereafter the West Brom Building Society announced its plans to increase its tracker rate margins too. Tracker Rate Campaign

If you are unfamiliar with tracker rates, “A tracker mortgage links your interest rate to the Bank of England Base Rate so your monthly payments move as this changes. This means you could benefit from cheaper payments when the Bank Base Rate is low but you will also need to budget for higher mortgage payments in case the rate goes up.”

Believe it or not, the text in italics above comes straight from a PDF document called “Mortgages Made Simple” which is published by the West Brom Building Society who also had the following statement on their website at the time the affected products were being sold …

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

With the consumer based regulators seemingly having washed their hands of these cases it has been left up to borrowers to raise funds to fight this out in Court on the basis of contractual issues and misrepresentation. Given that mortgage lenders have very deep pockets when it comes to funding legal action, and the potential of borrowers having costs awarded against them if they lose, it is very easy to see why this is a such a terrible position for those affected to be in.

That is far from where this might end though. This could be bigger than the RBS scandal, LIBOR fixing or the mis-selling of PPI or interest rate hedging products. Over 2.5 million tracker rate mortgages have been sold in the UK and such is the fear of other lenders following suit that more than 157,000 people are now following the Property118.com internet forum thread relating to this campaign.

Campaigners have raised well over £100,000 but this is a drop in the ocean when compared to the profits these lenders are making on the back of the increase and the funds they will throw at litigation to defend their positions.

Several MP’s have applied for a 90 minute debate and Property118 members are urging their own MP’s to do the same. The campaign group are pressing to arrange for Mark Alexander, the Property118.com campaign organiser, and his legal team to meet with Andrew Tyrie and Sajid David at the treasury to brief them in greater detail.

This is the link to the list of MPs .

Although if you can find the MP in question for your friend that would save time if you gave them the email address

http://www.parliament.uk/mps-lords-and-offices/mps/#nav-W

I don't see any harm in re emailing an MP that may already have signed the EDM.

It strengthens the fact that so many people feel strongly about this and may help convince them that they should vote for and engage in a 90 minute debate.

The whole thing should take less than 5 minutes

Dean

Reply to the comment left by "ian " at "11/02/2014 - 10:21":

Hi Ian

In theory yes, in reality, despite significant efforts and expense we have been unable to stir the mortgage broking community into action. It's a very sad indictment of my former profession 🙁
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Reply to the comment left by "Deceived by West Brom " at "11/02/2014 - 10:11":

I don't seem to have had an email on how to log in to the secure forum and I am a paid up member of the class action. Have all emails been sent to members yet?

Reply to the comment left by "Dean " at "11/02/2014 - 10:24":

That's the one, thanks Dean 🙂
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Reply to the comment left by "Sue Clarke" at "11/02/2014 - 10:42":

Hi Sue

Yes they have, please contact ana@lawdepartment.co.uk

Have you checked your spam/junk folders?
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Reply to the comment left by "Deceived by West Brom " at "11/02/2014 - 10:11":

I suppose it is possible that we have employees of WBBS that have buy to let mortgages, that have joined the class action, the best place to get your mortgage is probably the company you work for. It would just depend I suppose where your loyalty was. Would this show up in their mortgage offer?

Reply to the comment left by "LS " at "11/02/2014 - 10:54":

No but it would show up on the copy of their mortgage application form.

Interestingly, we do have a mole inside West Brom too. He/she has an unaffected west Brom BTL mortgage with an account number beginning with 9. He/she doesn't agree with his/her employers decisions and occasionally calls or emails me to let me know what's going around the rumour mill at WBBS head office. He/she has also made a £100 contribution to the marketing fund 🙂

Yes there is a chance they have a mole in our camp but we have one in theirs too.

Also, anything they pick up from the secure forum or other legally privileged cannot be used again us in law.
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Reply to the comment left by "Sue Clarke" at "11/02/2014 - 10:42":

Hi Sue, We didn't get an e:mail either yesterday (checked our spam and definitely nothing). I e:mailed Ana @ Law Department last night but still haven't heard back from her so I am going to ring her now.

Oh dear, when I try Ana's number it says 'the mailbox of the person you are ringing is full and cannot accept any more messages"....has anyone else managed to get through to her or the Law Department today? I am eager to access this secure forum!