FCA think it might be OK for lenders to ignore contractual terms

This is a quote from the FCA's own Website:

"How we are governed

We also ask the difficult questions, that sometimes regulators shy away from asking, of firms, ourselves and consumers."

Neither the Treasury, Parliament or the firms regulated want another lender to fail !

Are there too many vested interests within the FCA?

Stonking letter from David Lawrenson there.

I would pay a fortune to see the look on the FCA faces when they opened that one!

FCA and FoS are only concerned with 'fairness'.

P118 and CB is concerned with enforcing legal rights for our members and clients, by taking cases to court, before independent judges with no vested interests, acting under clear legal principles with power to enforce their rulings, not looking at some vague notion of 'fairness'.

Note that, from the article, the FCA does not seem to suggest that lenders could impose changes out of the blue, but rather whether lenders could rely on a mortgage term allowing them.

So what the FCA seems to be considering is whether a contract term permitting to vary other terms is always unfair.

The article contains a chart depicting their approach to such assessment, to quote:

1. Does the firm has a written term in its mortgage contract that states it is able to make change that it wants to make?

2. Is the term that the firm wants to rely upon fair or unfair under UTCCR 1999?

etc.

Reply to the comment left by "Romain " at "08/07/2014 - 12:49":

My understanding of contract law is that an agreement to make a new agreement subject to both parties consent is meaningless as that can always be done regardless of whether the original contract mentions it or not.

The issue here is that mortgage lenders HAVE changed the basis of their contracts unilaterally, i.e. without the other parties consent. Our intention is to prove that this is not legally possible. Why the FCA cannot understand or enforce the law as well as the principles based regulation they are responsible for simply beggars belief.
.

Interesting.......but what can one do?
I am trying to port a BTL mortgage which I took out 10 years ago.
I was living abroad then as I still do now. Woolwich/Barclays quote.....

WE WOULD BE UNABLE TO ARRANGE FOR YOUR WOOLWICH BTL MORTGAGE
TO BE PORTED TO ANOTHER PROPERTY DUE TO YOUR CURRENT RESIDENTIAL
STATUS.
But what they could do for me is...
OPEN A BARCLAYS INTERNATIONAL RELATIONSHIP MANAGED ACCOUNT
and here's the sting...
DEPOSIT £100,000 !!
My rate is 0.89 over base...........ENOUGH SAID.

Reply to the comment left by "Mark Alexander" at "08/07/2014 - 13:03":

Hi Mark,

Mark Smith said (from your quote): "A term can be varied only if the contract permits it."

From the article and the actual FCA document it seems that the FCA does not say otherwise and their discussion seems to focus on whether such terms allowing variations are fair (and thus valid), though they are not exactly stating that in the clearest way possible.

To quote the FCA document:

"Some lenders may therefore seek to rely on the ‘fine print’ of mortgage terms and conditions which, in some cases, allow them to make variations to their mortgage contracts."

"The discussion is based around whether the level of flexibility that firms reserve for themselves is fair, and what factors may be relevant when we make an assessment of the fairness of a change to a regulated mortgage contract".

I learned a lot in the last financial crisis. I learned that the "independent" credit reference agencies were not independent. I learned that banks feel they have a divine right to make money regardless of ethics. I learned that banks could legally sell financial instruments that they knew were going to lose money.
I also learned that mortgage companies were just short term traders, who borrowed short term money, lent the money as a mortgage, and then sold the debt on asap so they could start again. So my question is, why do they care what interest rate we are paying, if they've already sold it on to someone (the worst ones to the government)?

PS my recollection of the crisis was that the primary reason for the bank collapse was credit agencies giving A ratings to sub-prime mortgages. But you wouldn't know that now, as the banks have re-written history. It is now received wisdom that the financial crisis was caused by a housing bubble. Nice deflection of the blame.

It comes down to Contract Law I would have thought which an "FCA Policy" can not change that.

If I remember rightly Privity of Contract means you "don't" have to enforce a contract term; its up to the parties to enforce it. So Lender can ignore it but you can enforce it if you want.

As for changing terms; Its not up to the FCA both parties should agree to contract term. One party can change contact, unless it says they can in that contract but that should include notice and a route to decline.

Put simply; this is over the FCA quango's head.

Reply to the comment left by "Romain " at "08/07/2014 - 13:29":

I agree and that's the whole point.

The contracts exist, the laws exist, the legal principles of contra proferentem apply to ambiguity in contracts (which isn't the case in my opinion with either the West Brom or BoI cases) and yet the FCA are still refusing to step in or even to seek independent legal advice on what the disputed mortgage contracts actually mean. WHY?

Instead the FCA have launched this meaningless and pointless PR stunt which I can only presume is to make them look like consumer champions - they are NOT!