Mark Robert Alexander vs West Bromwich Mortgage Company High Court Judgement

Mark Robert Alexander vs West Bromwich Mortgage Company High Court Judgement

10:59 AM, 29th January 2015, About 9 years ago 390

Text Size

Today was Judgement Day in the case of Mark Robert Alexander (me) vs the West Bromwich Mortgage Company. I was representing a group of 360 affected borrowers, who between them contributed nearly £500,000 to fund the legal action. I am extremely disappointed to report that we didn’t get the News we were so desperately hoping to receive. West Brom Tracker Judgement

 

Could this be the end of tracker mortgages as we know them for up to 1 million people in the UK?

The Judge, Mr Justice Teare ruled that the mortgage company were within their rights to increase the premium (margin) on the rate they charge above the Bank of England base rate. He also ruled that West Bromwich Mortgage Company had the right to call in mortgages with 30 days notice. Clearly we are shocked at his decision and we anticipate outrage from the general public too.

The special conditions in my OFFER OF LOAN state (I’ve added bold capitalisation for emphasis) ….

“After 30th June 2010 your loan reverts to a variable rate which is the same as the Bank of England Base Rate with a premium of 1.99% UNTIL THE TERM END.”

NOTE the words “until the term end”, which I have always understood to mean that the premium of 1.99% over the Bank of England Base Rate would apply to the remainder of my 25 year mortgage after the initial 4 year fixed rate period was completed. The Bank of England Base rate today is 0.5% so you would be forgiven for thinking that I should be paying a rate of 2.49%. However, the West Bromwich Mortgage Company have added another 1.5%, meaning that I’m now paying them 3.99%. When they first increased the rate, the margin they added on was 1.99%. Should I be thankful they reduced it? What’s to stop them putting it up to 10% tomorrow? Well according to the Judge, Mr Justice Teare, apparently very little!

The Special Conditions, which the mortgage company are relying upon to vary the premium (margin), are generic to all of their mortgage products and come in the form of a booklet. It is very obvious that the Special Conditions booklet is generic to their entire mortgage range because in one section it says the property cannot be let, which is clearly inconsistent with a Buy To Let Mortgage.

To deal with issues of inconsistency between the OFFER OF LOAN and the Special Conditions booklet the mortgage company also has the following condition in the very same Standard Conditions booklet it has been allowed to justify the increase in the premium charged ….

“These Mortgage Conditions incorporate any terms contained in the OFFER OF LOAN. If there are any INCONSISTENCIES between the terms in the Mortgage Conditions and those contained in the OFFER OF LOAN then THE TERMS CONTAINED IN THE OFFER OF LOAN WILL PREVAIL.”

I accept that the mortgage company needs the contractual ability to vary their Standard Variable Mortgage rates in their generic Special Conditions booklet and I had every reason to believe that the clause they are now relying upon to increase my interest rate only exists because Standard Variable Rate mortgages are not pegged to another rate in the same way as a tracker. I had no reason to assume that the clause allowing them to make variations to interest rates would affect me, after all I had a Tracker Rate Mortgage with a premium over the Bank of England base rate UNTIL THE TERM END, which in my case is in the year 2031.

Would you have come to the same conclusions I did?

#WestBromTrackerThe reason I took the lead and encouraged other affected borrowers to fund this expensive legal battle was that the industry regulators have a proven track record of allowing banks and building societies to get away with this particular form of “daylight robbery”. In 2013 the Bank of Ireland hiked its rates for over 14,000 customers with Tracker Mortgages, many of them were home-owners, NOT Landlords. The regulators proved ineffective for affected complainants. Prior to that, in 2009, the Skipton Building Society CEO publicly confirmed  that their Standard Variable Rate mortgages were capped at 3% over the Bank of England base rate and that pledge would be honoured despite market conditions. A year later that promise was broken and the regulators did nothing about that either!

The problem that all borrowers have faced when complaining to regulators has been that all mortgage lenders who have been a party to these rate hikes to date have very sneakily targeted borrowers who ‘fall between the cracks’ in terms of consumer protection regulation. WBMC targeted borrowers who own three or more properties whereas the Bank of Ireland relied on a date when mortgage selling regulations changed. The the Bank of Ireland case this provided them with an opportunity to mercilessly target homeowner mortgages too. Anybody who took out a Tracker Mortgage before the MCOB (Mortgage Conduct of Business) rules were introduced on 31st October 2004, AND anybody who owns three or more properties has good cause to be VERY worried following the judgement passed today.

There are an estimated 1 million Tracker Rate mortgages in the UK, they were very popular in the decade prior to the Credit Crunch. I have other tracker mortgages with other Buy to Let lenders and I am fearful that if they follow suit all my hard work to generate money to invest for my retirement will be undone. Many homeowners with tracker rate mortgages could also lose their homes.

I simply couldn’t allow this to continue unchallenged. Somebody had to stand up to the financial bullies and I am proud to have been one of them, despite this awful news.

The question now is; “Should we appeal?”

We already have £68,912.39 lodged with Barco (The Bar Council Escrow Account Service) and we have paid £350,000 into the Court on account of the other sides claimed legal expenses. The Judge is yet to rule on costs to date so we may get some of the money paid into Court back too. We don’t yet know how much an appeal will cost in terms of paying the others sides legal fees if we lose, however, our barrister is so dissapointed by the verdict that he has already offered to represent us in the Court of Appeal on a no-win-no-fee basis, despite this not being covered in his original terms of engagement.

I also worry about the potential impact on tenants. The ramifications of lenders being able to hike up Tracker Mortgage interest rates or call in unprofitable loans on a whim (even if they are not in default) could no doubt result in mass defaults of repayments and inevitable repossessions of the quality rental property which has been funded by Buy To Let mortgage lenders. The knock on effects to tenants in terms of security of tenure and the availability of quality accommodation, afforded by the very existence of Tracker Rate buy to let mortgages, could be devastating!

Please share your thoughts in the comments section towards the bottom of this page.

Mr Justice Teare’s 20 page reasoning for his ruling is available free of charge via the Courts. However, I am asking everybody reading this article to donate £50 by completing the form below and in return we will immediately redirect you to a full copy of the Judges ruling. All money received will be used in a marketing campaign to raise awareness of the potential consequences of this dreadful decision. If you want to donate more than £50, simply order two copies for £100 or three for £150 etc. We believe we have already raised enough money to fight an appeal. However, we must not dip into these funds to promote the importance of the case, hence the need for an additional fundraising campaign.

Download the full judgement

  • Price: £ 50.00

Share This Article


Comments

Graham Durkin

12:11 PM, 30th January 2015, About 9 years ago

Reply to the comment left by "shakeel ahmad" at "30/01/2015 - 09:54":

My choice of words may not always agree with some ,but I am still respectful to the position that an individual holds ,that is a part of me ,my upbringing and my values

However I still believe as I stated that the JUDGE has totally got this one wrong , The guide was there in the screen shot for starters ,why have we all paid an" inflated set up fee that basically is "NOW NOT WHAT IT WAS ADVERTISED TO BE ".

As far as LEGAL POINTS of law that have been identified as crucial to our case ,if there is no reference in the judgement papers then he has not considered them and as previously stated these are what the SUPREME COURT have decided are currently crucial to understanding a CONTRACT between the institution and the layperson.

We must fight on as the RAMIFICATIONS for us & other Mortgage Holders outside our group are IMMENSE

Rob

12:15 PM, 30th January 2015, About 9 years ago

Considering the BOE are scared to increase base rate through fear of damaging the economy this judge has pretty much taken that decision out of carneys hands by allowing banks to increase rates anyway. Assuming other banks follow suit having a 0.5% base rate is meaningless. I think the Government should be seriously worried about the effects of this judges decision on the economy as a whole.

JB

12:20 PM, 30th January 2015, About 9 years ago

Would it help to start an HM Government e-petition?

Mark Alexander - Founder of Property118

12:28 PM, 30th January 2015, About 9 years ago

Reply to the comment left by "Jane Breakell" at "30/01/2015 - 12:20":

We have tried, we got a few thousand signatures but we needed over 100,000.

We managed to get in the back door though - see >>> http://www.parliament.uk/edm/2013-14/976

The only reason the politicians went quiet on this is that they cannot be seen to interfere with the judiciary whilst a case is with them.
.

Mark Alexander - Founder of Property118

12:32 PM, 30th January 2015, About 9 years ago

Reply to the comment left by "HOWARD MANSELL" at "30/01/2015 - 11:45":

Hi Howard

I am responding to your comment

"With no disrespect to Counsel Mr. Smith (who will have similar thoughts anyway) for any appeal it would seem sensible to instruct leading commercial counsel for advice and representation."

I think I speak for the majority of our group when I say that we are entirely happy with our current legal team and that we couldn't do better with all the money in the world. Added to this, the fact that Mr Smith is so passionate about our case that he is prepared to work on our appeal on a no-win-no-fee basis is virtually unique to a barrister of his professional standing.

I must add that, from my personal perspective, the ONLY reason Mr Smith is not a QC is the variety of experience he has enjoyed in his professional career, i.e. commercial solicitor then criminal barrister and more recently commercial barrister. QC's generally specialise in one area of law for their entire professional career. I think the variety of experience that Mr Smith has had serves us well, hence his appointment being a unanimous decision when the other candidate was a banking silk.
.

Dean

12:34 PM, 30th January 2015, About 9 years ago

Reply to the comment left by "Mark Alexander" at "30/01/2015 - 12:10":

Thanks Mark

What chance do we think we have of an appeal and how much of the £500000 have we still got towards one if we are allowed ?

Mark Alexander - Founder of Property118

12:45 PM, 30th January 2015, About 9 years ago

Reply to the comment left by "Dean " at "30/01/2015 - 12:34":

Hi Dean

I am unable to answer either of these questions at this stage.

That is because we have 21 days to submit our grounds for appeal and we then have to wait for around a month for leave to be granted or denied. Personally, I am VERY confident.

The amount we will have left in the pot will only be known after the detailed costs assessment. Note that we only know the award "on account" at this stage. However, our best guess is circa £200,000 which should be more than enough to fund an appeal. The reason I am looking to raise more funds in to pay for additional marketing.

Also note that we didn't quite get to £500,000. Please see my comments regarding this in the article leading this discussion. Remember, Mark Smith has only been paid half of his fees, he only gets the other half if/when we win.
.

HOWARD MANSELL

13:56 PM, 30th January 2015, About 9 years ago

Reply to the comment left by "Mark Alexander" at "30/01/2015 - 12:32":

Yes, all noted, and wish to stress my views dont carry any slight against Mr. Smith in any way whatsoever. I am a lowly provincial solicitor but regularly instruct specialist London counsel for High Court cases, and London silk when involved in the Court of Appeal. With Mr. Smith as the perfect Junior Counsel, led by a specialist London silk, it seems to me we get the very best of all worlds on a matter which could hardly be more important, and for for so many. Bar a trip to the Supreme Court, the next step could be the final one (and of course only the Supreme Court can give permission to take the appeal there).

I really dont want to be thought as impugning Mr. Smith's skill or dedication - but why not make the team as formidable as possible? I am sure West Brom will be taking that approach.

Mark Alexander - Founder of Property118

14:00 PM, 30th January 2015, About 9 years ago

Reply to the comment left by "HOWARD MANSELL" at "30/01/2015 - 13:56":

Thank you for your comments and we will give them due consideration.
.

Onslow Clough

14:03 PM, 30th January 2015, About 9 years ago

I have received a reply to my email to Jason McCartney MP, one of our main supporters. He has said that he is very sorry to hear the news, and will be talking again to David Morris MP to see if a Parliamentary debate on the issue would be helpful. "As you say, the verdict could have a wider impact for those with tracker mortgages and with other providers".
It is definitely worth trying to start the ball rolling again with all the MPs. If we don't TRY to get a debate then nothing more will happen. This needs to be a talking point again so that it comes to the ears of people who can really do something significant, like George Osborne. Get on your email now and tell your MP what has happened.

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 39

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Tax Planning Book Now