West Bromwich Building Society Tracker Margins Legal Action

Reply to the comment left by "Concerned Landlord" at "16/11/2013 - 11:45":

I agree that it has to make their position weaker because if they knew that they were 100% legally in the right to add the 2% there is no way they would drop it !

Unless of course as Dean says it is so that they can then move it back up again in time

Reply to the comment left by "Mark Alexander" at "16/11/2013 - 10:43":

If people had several BTL properties without mortgages and this WBBS BTL mortgage was their first, will they have been identified by WBBS as multiple property owners? We do not know how the information has been collated as to who is a multiple property owner

May be one to ask regarding fairness of their criteria of multiple property owners?

Reply to the comment left by "ROSEMARY BOSWORTH" at "16/11/2013 - 11:59":

I think and as Mark said it is to do with whether you are a consumer or a professional - if the former then you'd be entitled to 'consumer protection act'. The latter falls under 'contract law' and rights given under that act.

My humble opinion is that if you have 3 or more properties you'd be considered a professional - it is noteworthy that WB in their letter refer to 'landlord of multiple-properties' as opposed to 'holder of of multiple-BTL mortgages'...

Reply to the comment left by "Concerned Landlord" at "16/11/2013 - 11:45":

Who really knows whether the 'change' of the increase from 2% to 1.99% strengthens or weakens their legal position.

The one thing I do know is that this mortgage product should NEVER have been labelled/marketed/sold (or even referred to) as a "TRACKER" mortgage, because it simply is NOT performing or behaving as a Tracker mortgage - the clear majority of my monthly cost can change every single month by the lender to which I have no control over and do not know from one month to the next what change will be enforce upon me.

Why would anyone knowingly enter into a "tracker" mortgage agreement when the lender can dictate whatever rate they will charge from one month to the next ? This product should have been called a "Variable Rate Product" because this is what WBBS now want it to behave like. From an Advertising Standards perspective, they should surely agree this should have been sold as a Variable Rate product, not a Lifetime Tracker,

I have 2 WBBS mortgages, one at 0.59% and 0.89% above base, the 'variable' element of the increase is between a 250% - 300% differential of the 'tracker margin' element which I was clearly aware of and based my risk/reward decision against. So the WBBS are now running a mortgage agreement where simply the margin element is pretty much irrelevant and all of our eyes are now having to wait from a month by month basis what their variable increase will be, i.e. what is stopping them next month of increasing it to 2.3% ?

How do customers budget for their mortgage costs when the 'variable element' of an increase/decrease can vary at whim, on a monthly basis by the lender ?

I know a lot of the above thoughts were being posted on this forum from Day 1, but the increase from 2% to then 1.9% simply highlights the absurdity of this mortgage product even being referred to as a tracker mortgage, but it simply is not a Tracker mortgage and is behaving like a Variable Rate Product.

Reply to the comment left by "Mark Landlord" at "16/11/2013 - 11:58":

Mark - I posted a comment several days ago about WBBS being a member of the Government Funding for lending Scheme.

I am not sure if I am missing anything, hence the no comments on this, but if the scheme aims to provide cheap monies to their members, why then would WBBS have any claim to say market conditions have changed for the worse to warrant a 2%/1.99% hike in our rates ?

Are their actions in any way conflicting with what the Government Funding Scheme is designed to do and would there be anyone we can approach who runs this scheme from the Governments side ?

I have had a letter from the Building Societies Association basically saying the decisions their individual members make is of no interest to them. Hardly surprising given the lady I spoke to at the BBA initially laughed/sniggered on the phone when I said I wanted to complain about the WBBS.

Reply to the comment left by "stuart marshall" at "16/11/2013 - 12:28":

...it sure is a tracker mortgage: it tracks the whim of WB bosses!

Joking aside, you are making a valid point here, varying from 2% to 1.9% suggests that it is in fact a variable product and not a tracker.

This and other points raised will surely weaken their position.

Hi Stuart

Please do not describe it as a Variable Mortgage - that is what the WBMC wants you to do.

It is, and always has been, a Tracker Mortgage. In order to increase its profits the W B Mortgage Company Ltd is now trying to pretend that it was always Variable.

However, the interest rate has always done what the Loan Offer stated - tracked every change in the Bank of England Base Rate.

We have today received a USELESS reply from HM Treasury - from a Ms Vicky Gallagher of the Public Enquiries team totally missing the point and wittering on about interest rate rises being none of their concern and justifying to us why they are not concerned about BTL mortgage holders as we don't risk losing our homes if things go wrong! I have e-mailed her with the following:

Dear Ms Gallagher

Reference your letter received today, November 15th in response to our letter of 8th October.
What a shame that Ministers do not feel it is a part of their responsibility to the electorate to answer letters addressed to them as you have quite clearly missed the point of our letter entirely!
We KNOW and accept that interest rates can change and we would not expect the government or the Treasury to intervene if one of our variable rate mortgage’s interest rate were altered! We completely understand, thank you, the nature of the pricing and availability of loans and are very clear about how and when interest rates might rise - or fall.
We purchased a life time TRACKER mortgage product – advertised and marketed by the West Bromwich Building Society as offering the security of knowing and being able to plan for what one’s payments would be because the product tracks the Base of England interest rate at an agreed margin above that rate FOR THE LIFETIME OF THAT MORTGAGE!
That was a CONTRACT we made with the West Bromwich Building Society!
What we do not accept is that the terms of a contract can change at the whim of one of the parties and to the detriment of the other.
The reason we wrote to the Minister is because is our understanding that the Treasury concerns itself with the country’s economic recovery – and as such would we are sure the Minister would agree that the whole point of having a low BoE base rate is to encourage that recovery
Now, 5 years down the line when the BoE Base rate HAS NOT CHANGED – the WBBS have arbitrarily decided to add 2% to the interest rate – which incidentally they have already adjusted to 1.9% since we wrote in October, indicating to us that they now believe that they can ignore our contract and change the interest rate charged to us at will.

THAT was the point of our letter to the Minister – and was the question we would like him to address

Arbitrarily is right Denise. Stuart has two mortgages with different premiums. My premiums is bigger than those, and I think from what I've read that other people are paying more than me.

Thus we are all paying at several different rates of interest. If market conditions were the reason, then why has the company not tried to put us all on the same rate, by applying different percentages to our fixed premiums? Because market conditions are not the reason, even if they did apply to tracker mortgages, which they don't.

2% has been chosen as a nice round even number to start with. The reduction of 0.1% only draws attention to how arbitrary the first figure was.

Market conditions is a red herring. The company will have secured the funds at profitable rates before it promoted our Trackers, as someone described weeks ago on this forum.

Another red herring is the number of mortgages held. I had more than 3. I know a fair bit about letting - and its problems. That does not mean that I know anything about what the company pays for the money it borrows, or care.

I understand from a previous post. on this forum that the company has lost millions, In spite of this it has decided to spend millions more on new offices. That is where the 2% comes from.

Reply to the comment left by "stuart marshall" at "16/11/2013 - 12:28":

In WBBS, NEW leaflet ( issued in September with rate rise letter ) 'Understanding the changes to your buy to let tracker mortgage' they state,'The interest charged on your buy to let mortgage is made up of two variable elements - Bank Base Rate and an additional percentage. It is this additional percentage that we are increasing by 2per cent'.

They have decided to fundamentally change the product we all bought. NOWHERE in any original documentation nor the general terms and conditions does it mention TWO VARIABLE elements.

In their terms and conditions they also state : ' These Mortgage Conditions incorporate any terms contained in the Offer of Loan Letter. 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 Letter will prevail.'

My offer of loan is clear that my mortgage is a BTL LIFE Tracker BBR + 0.59, until TERM END. Not BBR variable plus VARIABLE premium.

The legal advice I got yesterday also implied that FOS will not look into anyone's complaints against WBBS while there is the possibility of pending legal action via the courts. If anyone is holding out for FOS ruling, it would appear this wont happen until this class action is resolved.Perhaps this is why they wont rule on Bank of Ireland either .?

Also got 3 letters today reducing that SECOND VARIABLE to 1.9 !!!