West Bromwich Building Society Tracker Margins Legal Action

Reply to the comment left by "Ian Ness" at "08/12/2013 - 12:13":

@Ian Ness,

You quote " If I were West Brom, I would also join this forum to see what “the other side” is doing so although we have little choice we should be aware they will see all our ideas and concerns"

West Brom have certainly been 'tuning in' to this forum regularly.

It's good that West Brom can see everyone is concerned and the pressure against them is building. It's exactly what they should be doing. They should be concerned and they should be worried.

You can be sure that Mark and Justin know exactly what not to publish here.

I am certain that there are a lot of other people on this forum who will engage with you about your other questions.

Reply to the comment left by "Appalled Landlord" at "08/12/2013 - 15:24":

Sorry, the second and third sentences should have read:

Why did WB go to the FCA, knowing that the latter doesn’t care about BTL borrowers? I wonder if it was to have a similar conversation to the one you describe.

Reply to the comment left by "Appalled Landlord" at "08/12/2013 - 15:38":

We have to be clear here, the FCA is as much about protecting the lenders and preventing them going bust as anything else.

I hope by now all readers of this forum are disabused of the notion that the FCA is a kind of benevolent institution whose remit is always targeted on righting wrongs imposed on those who use financial services.

Indeed it was reported in The Times a few weeks ago that other lenders have been in discussions with the FCA too about wriggling out of tracker deals.

I have written this letter to the FT today - to Elaine Moore and to their letters editor at money@ft.com as sadly even the FT seems to be struggling to understand the real issues and confusing their readers.

The piece I was referring to in my letter was "Homeowners urged to Fix mortgage rates now" published in the FT 7th Dec 2013.

"Elaine,

The statement from the FCA quoted in your piece, says the following: ".... we recognise that mortgage lenders may want to vary SVRs or other terms in their contracts, but we are concerned that the factors driving changes to SVRs may not always be transparent to consumers"

That is quite an understatement.

In the case of buy to let mortgage base rate trackers, all the marketing material, all the information on the lenders websites, everything the customer was sent and all the information in the main mortgage contract that borrowers signed said that these products tracked at a set margin above the central bank base rate FOR LIFE

What the lenders have tried to do is dig out a small print clause in a separate general terms and conditions document (that many borrowers did not even receive) and that was clearly meant to apply to SVRs and somehow try to convince the dolts at the FCA that this could override everything else.

They have done this to renege on the contract. Tough on the lenders - they wrote a bad contract and they lost. They are now tying to wriggle out and because it is buy to let mortgages, they think that the borrowers have no protection from the FOS or FCA.

This story really need to be written up properly and the banks exposed for their larceny. So far, I'm not convinced the story has had a proper airing and explanation in the FT.

This is larceny from the lenders and the story deserves a better and wider coverage. Borrowers may have no protection from Mr.Wheatley and his friends at the FCA but it is time a journalist properly explained the real issues here.

My open letter to Andrew Tyrie - see below - explains they key facts in more detail .

http://www.lettingfocus.com/blogs/index.php/2013/11/mortgage-tracker-rates-open-letter-to-andrew-tyrie-mp/

David Lawrenson
http://www.LettingFocus.com
Private Rented Sector Consultancy
Author and Commentator"

Reply to the comment left by "David Lawrenson" at "08/12/2013 - 15:47":

Well said Mr Lawrenson !!

Reply to the comment left by "David Lawrenson" at "08/12/2013 - 15:47":

Sorry if I missed this, but is there any firm ground to show that the WB has gone to the FCA for their 'external validation'? Or was it possibly advice from a lawyer?

Reply to the comment left by "Mark Smith (Barrister-At-Law)" at "07/12/2013 - 11:39":

Hi Mark

We do not fall into WB's definition of Commercial.

We were described in the inital letter as "landlords of (sic) multiple properties", and "property investors". We are also "non-consumer buy-to-let" borrowers, according to the chief executive, Jonathan Westhoff.

In his business review at the start of the latest half-year accounts (thanks Colin and Andy) he wrote:

"the Group has sought to mitigate the impact of adverse market conditions by increasing the interest income from its non-consumer buy-to-let portfolio with effect from 1 December 2013."

BTL loans are regarded by WB as residential lending, and are part of its Retail segment. Surprisingly, BTL loans exceed owner-occupier loans. At the end of March the ratio was 7 to 3.

I am not being pedantic. The distinction is very important, because it is the Commercial segment of the WB group that is its real problem. It lost £92 million in the 5 years to 31 March. At that date its liabilities exceeded its assets by £69 million. It is in negative equity.

To borrow the phrase that Mr Jones, Group Risk Director, used in his letter to George Eustice MP to describe the low Bank Rate, the Commercial segment has had “a very adverse impact on the performance of the West Bromwich Group”.

The accounts for the last 5 and a half years can be found at:

http://www.westbrom.co.uk/your-society/financial-information

From the Chairman’s statement at the start of the accounts to 31 March 2013:

Regulation – stronger oversight

"Customers should have complete trust in the integrity of financial
services providers. In that sense, the West Brom welcomes the
regulatory changes recently introduced to make scrutiny and
oversight even more embedded within the industry."

We are your customers, Mr Nicholls. We would welcome some integrity.

Does anybody else think this all sounds like Guantenamo Bay and non combatents? Or how to riggle out of ones contractual commitments. (e.g. Genva convention)?

i think Guantenamo Bay is a bit OTT as a comparison....

A certain lack of comprehension I suspect. The Geneva convention is to protect those who are not , or no longer taking part in hostilities.

There's always an inherent danger that propaganda however generates a view that is more positive than actually is the case. As become self-perpetuating.