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

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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

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Interested Party

21:39 PM, 27th October 2015, About 9 years ago

Just waiting for all of this to start to kick off again with my BTL at the bank, but I'd had a handy tip off a fellow landlady who got her case excluded from this change as the terms and conditions stated on her Deeds didn't match the ones that were supposed to apply to her account, so the West Brom couldn't apply some clause or other. Just though this may be worth checking out as it may not be a one off? I've found in the past that this sort of issue might be a minor typo that's overlooked on a lot of cases but can make a huge impact legally. Might be worth some of your members checking, especially the larger loans...

Just a thought...

May help me when it my bank start playing up again!


Mark Alexander - Founder of Property118

9:22 AM, 28th October 2015, About 9 years ago

Reply to the comment left by "Interested Party" at "27/10/2015 - 21:39":

Please ask the lady you are referencing to post specific details because none of that makes any sense to me.

Interested Party

20:39 PM, 28th October 2015, About 9 years ago

Reply to the comment left by "Mark Alexander" at "28/10/2015 - 09:22":

Basically the version of the terms and conditions referred to in the deed didn't exist so they couldn't enforce anything. The contract was completed on conditions that didn't actually exist on the deed, but didn't know whether this affected anyone else as deed documents are usually mass produced stationery that is printed on...

Neil Patterson

15:02 PM, 27th November 2015, About 9 years ago

FT Adviser >>

West Brom half-year profits hit £6m

West Bromwich Building Society saw its profits remain steady at £6m at the end of September, compared with the same period in the previous year.

The lender cited profits before tax of £6m for the six months to 30 September 2015, against the same figure for the end of September 2014.

The results also revealed gross residential mortgage lending was down slightly to £295m in 2015 from £300m in 2014.

West Brom’s chief executive Jonathan Westhoff said it is well on track to exceed the full year figure of £446m in mortgage lending completions for 2014 to 2015.

“These results demonstrate a sound performance, with the West Brom’s profit levels maintained year-on-year,” Mr Westhoff said.

“We continue to make funds available for homebuyers, advancing £295m of gross prime residential lending during the period, and are well on track to exceed the full year figure of £446m in completions for 2014 to 2015.

“Much of this is down to our increased presence and growing reputation in the intermediary market, which enables us to broaden our lending to a wider geographical area.”

West Brom cited an increase in retail savings balances since the end of its last full financial year, meaning the vast majority of new mortgage lending is funded by retail deposits.

The society also reported savers are making use of the current opportunities for tax-free saving, with an increase of just over 15 per cent achieved in Isa balances throughout its membership.

Mr Westhoff said: “In light of this, we anticipate members will welcome changes scheduled for next year to the rules governing taxation for savings income.”

lucas lucendo

18:25 PM, 2nd February 2016, About 8 years ago

Reply to the comment left by "Neil Patterson" at "27/11/2015 - 15:02":

Hi Everyone, April 2016 is the next step in the West Bromwich action which is only 8-12 weeks away.As a fully contributed member of the campaign do we have any updates ?

Mark Lynham

9:21 AM, 3rd February 2016, About 8 years ago

i beleive there is a private group for that?

Mark Smith Head of Chambers Cotswold Barristers

10:22 AM, 3rd February 2016, About 8 years ago

There is indeed a private forum for all paid-up members, but it is now public knowledge that we were granted permission by the Court of Appeal for a full appeal against the judgment of Teare J. This permission was granted by written application; we were not required to make an oral application to the Court for permission to appeal.

This appeal hearing is listed on 27th or 28th April 2016 at the Court of Appeal Civil Division, Royal Courts of Justice, London.

Our case will be presented by Michael Ashcroft QC.

It is to the great credit of all campaign group members that virtually all of them have stayed loyal to the campaign, which has meant we have not been under financial pressure in fighting the case. We have been able to obtain the services of one of the leading QCs in this field, and have also been able to secure the costs of the WB, meaning they cannot force the case to be abandoned through lack of funds if we lose.

Mark Smith Head of Chambers Cotswold Barristers

9:42 AM, 19th February 2016, About 8 years ago

Dear Members,

Please log in to the secure forum or please see my previous post for news of our appeal. To answer individual emails asking for updates is proving rather time-consuming.

Mark S

10:03 AM, 19th February 2016, About 8 years ago

Having a senior moment - can anyone point me to where I can find the Secure Forum please?

Mark Alexander - Founder of Property118

6:56 AM, 8th April 2016, About 8 years ago

The appeal date is confirmed, please see the linked article below ...

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