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

  • Price: £ 50.00

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NW Landlord

15:41 PM, 29th January 2015, About 9 years ago

I don't have any westbrom mortgages but do have trackers with mx platform b mids and capital home loans and am very concerned at what I am reading I would be happy to contribute to the cause if needed as I am sick these large cartels behaving how they fell like. It's similar in a way what local councils are doing charging FULL council tax for empty / void properties that are not using the services in the area. They are struggling for money so they sting the ordinary hard working people of this country what a joke

Paul landlord

16:10 PM, 29th January 2015, About 9 years ago

Everyone so far has said what I wanted to say. I do thank everyone involved from 'the Marks' at the front end to every member of the group for their efforts despite an unpleasant result. We fought we lost- but at least we had the b*lls to fight. Well done everyone despite the result. Can I encourage every member to fund the appeal where possible? I personally do not like to give up easily where there is an obvious injustice particularly where this could have far reaching effects. Thanks to everyone involved again

Mark Alexander - Founder of Property118

16:15 PM, 29th January 2015, About 9 years ago

I have just sent a link to the full Judgement to those who have ordered it. Thank you to those people for their kind donations.

All new download will be redirected immediately to the PDF document as well as receiving a link to it via email.

Onslow Clough

16:18 PM, 29th January 2015, About 9 years ago

Profoundly disappointed.
Think we MUST make sure that all our MPs know what has happened. While it is out of court, the MPs are allowed to discuss it.
I will also contact various other parties. The senior lawyers at Which? magazine were horrified by the actions of the mortgage companies who have raised the tracker rates, and now I am sure they will have a lot more to say on the subject. Wonder where West Brom will feature on their "which mortgage?" league table. I'd be guessing somewhere at the bottom....
Nicole at the Telegraph will no doubt be talking about the judgement this weekend.
Let's get all the other national papers on board.
People need to know that their mortgages are not safe.
What a travesty.

NW Landlord

16:21 PM, 29th January 2015, About 9 years ago

Mark what is the level of donation is there a set amount I know several landlords who would be interested ?

Andrew Cheesbrough

16:31 PM, 29th January 2015, About 9 years ago

Amidst the righteous indignation, which I share, may I just take a moment to thank the two Marks, particularly Mark Alexander for bringing us together to take on the bully. It must have seemed a daunting task and a highly risky one at the outset. I am sure that I would not have been so brave, to my shame. May I also extend my thanks and appreciation to your long suffering wife for the hours and hours that you have devoted to the cause.

Mark A, if you are up for it (an appeal) then my cheque's in the post. You may wish to consider whether we should widen it out now to mortgage brokers and lawyers as they do have some leverage over WBBS. If Charcol and London & Country (to name two as examples only) refused to recommend products offered by WBBS or any other lender who did not sign up to a charter to honour existing mortgages as sold then that might exert greater leverage on the lenders than the plucky 300+ can muster.

With my very best wishes to the Marks and our heartfelt thanks.

Andrew and Sushma

Richard Mann

17:08 PM, 29th January 2015, About 9 years ago


Was it you that called him the other day?

Appalled Landlord

17:12 PM, 29th January 2015, About 9 years ago

Reply to the comment left by "Andrew Cheesbrough" at "29/01/2015 - 16:31":

Hear hear!

Mark Alexander - Founder of Property118

17:19 PM, 29th January 2015, About 9 years ago

Reply to the comment left by "graham durkin" at "29/01/2015 - 15:10":

Hi Graham

Thank you for your questions regarding leave to appeal timescales, I apologise if this has already been answered but I'm working my way through questions and providing answers in the order I get to them.

I am neither a quialified not practising legal professional but my understanding is as follows:

We have 21 days in which to apply to the Court of Appeal for leave to appeal. We must submit skeleton arguments showing that we have a reasonable chance of success and they must concur.

Following our submission, our request should be approved or denied in around a month.

It takes around 6 months from being granted leave to appeal for a Court date to be available.

If any qualified legal professionals disagree and would like to correct me on any of the above then please do so.

Mark Alexander - Founder of Property118

17:23 PM, 29th January 2015, About 9 years ago

Reply to the comment left by "Steven O'Neill" at "29/01/2015 - 16:21":

That's very encouraging Steve. We are asking for £50, please see the bottom of the article leading this discussion thread for details.

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