West Bromwich letter asking what repayment plan I have for the mortgage

by Readers Question

14:14 PM, 23rd September 2015
About 3 years ago

West Bromwich letter asking what repayment plan I have for the mortgage

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West Bromwich letter asking what repayment plan I have for the mortgage

I have heard that West Bromwich can indulge in dodgy practices (like UKAR etc) and I have just received a letter I would like advice about before I answer it.letter

It states that I have 10 years remaining on ‘elements 1 and 99’ of my mortgage term (I don’t know what these ‘elements’ are) and a balance of £55,000. It then says I should have adequate plans in place to make sure I can repay the amount outstanding at the end of the mortgage term. It asks me to complete a form which asks me to write in details of my endowment policy of pension plan (I don’t have either of these specifically as it is an interest only mortgage and I will sell the house at the end of the term). It then states:

‘If you don’t have any plans in place at the moment, please contact us as soon as possible to discuss the options available to you.’ That’s the sentence I don’t like. In actual fact, I do happen to have a small endowment coming out in 2017 for maybe £20,000. And my partner had one come out for maybe £14,000 a few years ago.

I also have more than sufficient funds in the bank to pay it off tomorrow. For example I could send them a copy of a bank savings account with in excess of £100,000 in it.

What is my best course of action? I expect a few others will also be getting these letters. It looks to me like they’re up to something.

Linda



Comments

Neil Patterson

14:22 PM, 23rd September 2015
About 3 years ago

Hi Linda,

I could not be 100% certain without seeing your mortgage contract, but I believe this is most likely to be a request under the excuse of KYC (know your customer) and showing due diligence to the CML and Bank of England.

I personally would just ignore it as you are at no financial risk and you have a perfectly valid contract that has not changed and you have not missed any mortgage payments or broken any clauses as far as I am aware.

I doubt you will get a chasing letter, but best to deal with that if it does arrive.

West Brom's credibility and ethics are very much in question after increasing the margin on their tracker rates.

Jon Pipllman

17:03 PM, 23rd September 2015
About 3 years ago

It isn't just landlords that will have similar letters, any IO mortgage is likely to attract such a letter.

I would be inclined to agree with Neil on this one. You demonstrably do have the means to cover the mortgage principle at the end of the term and, unless pressed, I don't think it is any business of WB to know the details.

They might press you with some follow up requiring you to notify them under the terms of the contract. You can cross that bridge when you come to it.

If you were applying for a new IO mortgage today, using the 'sell the house at the end of the term to repay the capital' isn't likely to be well received.

Colin Dartnell

15:41 PM, 24th September 2015
About 3 years ago

I have just had an almost identically worded letter from the TSB, minus the elements bit. I ignored it. I don't trust any of the lenders to be above board any more.

Mike McDonagh

12:30 PM, 26th September 2015
About 3 years ago

Hi,
Lenders are tending to do this to demonstrate due diligence. It also gives them more clout to evict at the end of the term if you are unable to pay.
I have received and ignored many similar letters and have received some follow up.
I now send a standard reply which simply states " I thank you for your concerns and am happy to advise that I have adequate plans in place to clear the mortgage at the end of the term."
I give no more detail than that and have had no further follow up.
Cheers Mike

Linda Lane

10:09 AM, 21st November 2015
About 3 years ago

Reply to the comment left by "Mike McDonagh" at "26/09/2015 - 12:30":

Hi Mike.
I've just had a follow-up letter - so that's two months after the first one. It asks me to reply within 28 days and the same forms are in there and a leaflet about how to deal with a shortfall - but it doesn't say what they'll do to me if I don't reply... maybe pour boiling oil on me from a height? I will either ignore it or send the brief note you suggest. Have you still had no further follow-ups when you write those notes? Thanks.

Mike McDonagh

10:46 AM, 21st November 2015
About 3 years ago

Hi Linda,
No, I have had no further follow up.
I further remain convinced that whilst these checks and conditions might be appropriate at the time of a new application, they are wholly inappropriate for an existing account. Especially whilst all the payments and terms are being met.
Best regards, Mike

margaret barrett

11:59 AM, 10th November 2016
About 2 years ago

Reply to the comment left by "Linda Lane" at "21/11/2015 - 10:09":

Hi Linda

I received same request from West Brom about one month ago, I did not respond. Have just received a second'request'. Did you have any follow up last year?

Thanks
Maggie

Jan Martin

13:03 PM, 10th November 2016
About 2 years ago

I have received a letter myself a few minutes ago from CHL reminding me that one of my loans mature in 2021. It asks me to check that all plans in place no shortfall etc etc.
My concern is that at the bottom of the second page it says
" Please note that should you have a portfolio of accounts with chl mortgages, as per your mortgage terms and conditions,chl mortgages have the right of cross consolidation. this means we may require you to redeem all loans at the same time or at our sole discretion,
request full sale proceeds or any uplift of funds on a remortgage to apply against the remainder of your portfolio."
To think that when I pay back this mortgage they can call all the rest, and I suppose all the companies can do the same how can we carry on knowing this .

H B

8:25 AM, 11th November 2016
About 2 years ago

I think that this is a result of regulatory pressures. If a lender does not know how a loan is going to be repaid, it will have to consider that there is a higher chance of it not being repaid and this may require it to hold higher reserves for this eventuality.

A couple of other things may be driving this, such as the fairly recent PRA paper on BTL underwriting standards as well as s24, which may make it harder to get a loan.

Note also that residential interest only customers get similar letters.

With regards not answering these letters, remember that these are commercial loans and we should behave like business people. Any business that does not answer questions about its debts to its banks is not going to be looked at favourably.


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