West Bromwich Building Society Tracker Margins Legal Action

Reply to the comment left by "stuart marshall" at "21/11/2013 - 21:55":

Well done Ian and Stuart.

Would someone like to post a comment to the FT Adviser article pointing out that WB is targeting only 41% of its BTL mortgages, and that none of those that it sold direct or through its own broking company will suffer an increase, in spite of its claim about the interests of its wider membership. I don't want to blow my cover by registering.

FSA’s requirement that all promotional material must be clear, fair and not misleading.

In an interview in The Sunday Telegraph today Lloyds Banking Group’s current chief executive, Eric Daniels, promised to bring greater transparency to his bank’s financial products in the last three months of his tenure.

He appears to be planning to start with current accounts, but as the largest mortgage provider in the UK he has a particular responsibility to make sure his mortgage adverts are transparent, which they already should be to meet the FSA’s requirement that all promotional material must be clear, fair and not misleading.

In my view adverts from Halifax, Lloyds TSB and Cheltenham & Gloucester promoting their two year fixed rate or tracker mortgages with a low interest rate but a high percentage fee, typically 2.5%, fail this test miserably because the headline focuses on the great interest rate but makes no mention of the arrangement fee.

Reply to the comment left by "Ken Rose" at "21/11/2013 - 22:04":

I did contact Ethical Consumer 2-3 weeks ago and posted a comment to that effect on its website. It never appeared so it was obviously taken out during the site's moderation process.

Received another two West Bromwich Building Society 1.9% rate hike letters today in addition to the four rate hike letters I received yesterday. I immediately paid another £480 to the fighting fund in addition to the £960 I paid last night. Yes it is a fair bit of money and I know money's too tight to mention for many of us (especially me) on here but I could probably add a couple of noughts onto those figures by way of my increased interest payments over the coming years if West Bromwich BS are allowed to get away with this rate hike.

The truth is if we don't challenge the West Bromwich BS over this rate hike then it won't really matter in future whether you opt for a tracker product, a fixed rate product, a discounted variable rate product or an offset mortgage or any other kind of financial product. Whatever the type of mortgage/loan it is marketed as will be meaningless and will provide you with no certainty or ability to plan. Think you're secure with a five year fixed rate product? Wrong! Your lender will increase it on a whim citing "adverse market conditions" or having to run their business "prudently, efficiently and competitively". No lender promises, or pledges, or product guarantees will ever be able to be relied upon again.

I know we are all feeling the pinch of austerity and I know we all have to suffer tenants not paying rent as well as the multitude of expenses that come with letting, repairing, and maintaining properties but please dig deep into your pockets and join the class action. Ever since I learnt of the rate hike by the West Bromwich BS I had been worried sick about how I will cope financially especially as I've just become a dad. No one wants to be in a position where they're worried about how they're going to be able to provide for their family. I have already been at the receiving end of one lender's volte-face when Skipton Building Society reneged on its so called SVR "pledge". I now face a similarly unjust and immoral action by West Bromwich BS. However, since joining the class action, my fear and anxiety have been transformed into a fighting spirit. You can't put a price on that.

Please support the class action by becoming a member and contributing £240 payable per mortgage. Don't just sit on the sidelines waiting for others to fight your fight for you. Stand up and be counted by taking the fight to unscrupulous lenders like West Bromwich BS and Skipton BS. They are little more than bullies and cowards who will back down when they bear witness to the strength of our resolve.

“The only thing necessary for the triumph of evil is for good men to do nothing.”
Edmund Burke

Reply to the comment left by "stuart marshall" at "21/11/2013 - 19:12":

Hi Stuart

I am a retired Commercial Finance Broker so I do have a very good understanding of securitisation and the relevance of your post. I also posted the link to the Reuters website here on the day the article first appeared. Maybe we should have a chat offline?
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Reply to the comment left by "stuart marshall" at "21/11/2013 - 21:55":

Stuart, I do indeed know Ray Boulger, we previously met several times at Corporate jollies when I was MD of The Money Centre. We spoke a few weeks ago just before he appeared on the BBC TV programme with Justin Selig. Ray has been doing a great job alerting the press to this issue for us.
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email sent to our friendly journalist, Nicole Blackmore at The Telegraph

Dear Nicole

We spoke a few days ago about West Brom only targeting customers with mortgages which had been arranged via brokers with a 2% rate hike on their trackers.

The information at the time came from our “spy” at West Brom, who is one on their senior ranking employees who is disgusted with what’s been going on.

You quite right were interested but needed evidence of this.

Well I have your evidence, please see >>> http://uk.reuters.com/article/2013/10/08/fitch-no-rating-actions-expected-on-hawt-idUKFit67127620131008

West Brom are only targeting 41% of their customers!

Surely the FCA or the PRA should be getting involved now on the grounds of “Treating Customers Fairly”.

I have published this memo to you on our forum and will be asking members who have written to their MP’s to follow up those letters again with this information.

Most letters to MP’s were referred to the Treasury who responded to say that they could not get involved in a lenders business decisions on pricing. That’s not what we were asking of them though, what we wanted is for them to increase the pressure on the FCA to get off their backsides and investigate what the West Brom are up to propely. It is a sad state of affairs when layman landlords can uncover issues like this but the FCA apparently cannot. We need Andrew Tryie MP, chairman of the Treasury Select Committee to continue the good work he started when he wrote to the FCA earlier this year about interest rate margins being hiked on tracker mortgage rate products. It would appear the FCA were Teflon coated at the time as nothing Mr Tyrie said seemed to stick. However, there is now very clear evidence that what the BoI did when they increased the margins on their tracker rate products was not an isolated incident at all. I am now serving clear evidence on a plate for you to report and for the FCA to follow up.

Earlier this week several national Newspapers reported that the FCA had been approached by several other mortgage lenders regarding their intentions to increase Tracker rate mortgage margins. This must be stopped.

Please help

Regards

Mark Alexander

Copied from Landlord Today;

Friday 22nd November 2013

The Financial Conduct Authority (FCA) has signalled a possible crackdown on mortgage lenders which change tracker rates despite no change to the Bank of England base rate.

The Times has reported that FCA chief executive Martin Wheatley has written to bank and building societies as the regulator reveals that several lenders are seeking to follow Bank of Ireland and West Bromwich Building Society in hiking tracker rates.

The lenders have used get-out clauses buried in the fine print of mortgage deals to increase rates on tracker mortgages despite the Bank of England base rate having remained at 0.5% for more than four-and-a-half years.

Around 6,700 West Bromwich borrowers with buy-to-let mortgages face a rate rise of 2% on 1 December. A number of the affected landlords have grouped together to launch a legal challenge against the move.

Bank of Ireland borrowers are also seeking legal advice after the bank wrote to 13,500 buy-to-let and residential borrowers on tracker mortgages in February saying their rates would be hiked.

About 2.5 million people in Britain have tracker mortgages, where the interest rate supposedly tracks the base rate. Many lenders are losing money on these deals, some of which were set before the base rate fell to 0.5% in March 2008.

“A number of mortgage lenders have engaged with us recently about changing their mortgage contracts, including standard variable rates,” Wheatley says in the letter to lenders, which then warns bank chiefs that changes to mortgage terms could breach consumer law and the FCA’s principles for businesses.

The FCA is publishing a discussion paper on tracker rates next year. Industry experts are already concerned that any sharp rise in the base rate could leave many households struggling financially.

Martin Wheatley's package over £700K per annum

http://www.moneymarketing.co.uk/martin-wheatley-awarded-650k-pay-package/1074100.article

http://www.fshandbook.info/FS/html/FCA/PRIN/2/1