West Bromwich Building Society Tracker Margins Legal Action

I should mention that even if we win at court, the West Brom are also counting on a "Ford Pinto" type cost-benefit analysis. Anyone remember the Ford Pinto, the car that had the unfortunate effect of occasionally blowing up and cooking its occupants when shunted from behind? An infamous 1973 memo written for and circulated amongst senior management at Ford concerned a cost-benefit analysis that estimated that equipping the Pinto with an $11 part would prevent 180 burn deaths, 180 serious burn injuries and 2,100 burned cars, for a total cost of $137 million. Paying out $200,000 per death, $67,000 per injury and $700 per vehicle would cost only $49.15 million.

Anyone like to take a guess on which of the two options Ford chose? It’s a perfect example of how organisations motivated by profit above all else weigh things, even human life.

The senior management at the West Brom have likely conducted an actual or mental cost-benefit exercise of court action by a small group of activist borrowers. They have calculated that even if they have to honour the tracker mortgages for 300 or so borrowers securing a victory at court, they are still going to make tens of millions on the remaining 6,400 apathetic borrowers. They have also factored into account any PR fallout or bad publicity and have in all likelihood ascribed it a low or negligible value. It's now down to us to show the West Brom that they have sorely miscalculated.

The line must be drawn here! This far. No further!

Reply to the comment left by "Mark Alexander" at "08/12/2013 - 22:34":

@Mark,

In response to your comment about another lender following suit...

I said in my last comment a "this is going to be a ‘free for all’ for lenders to hike rates on a whim." and that's what we're getting.

Lenders are predictably greedy.

Reply to the comment left by "Mark Alexander" at "08/12/2013 - 22:34":

Let me guess...... Barclays or Santander?

Barclays are used to a bit of scandal - LIBOR rate fixing

There has been over 70 new signatures on the Change.org web site this morning.

Does anyone know why. This is the biggest and quickest increase I think I have seen since it was set up. It also seems to be from all around the Country.

In addition no one has posted on here all morning

Anyone any ideas ? Anything been in the press , TV or radio ?

Dean

Reply to the comment left by "Mark Smith (Barrister-At-Law)" at "08/12/2013 - 15:57":

Further to your comment - I think it is most likely that the advice was from their solicitors (Eversheds) and not the FCA. Having contacted the FCA almost immediately after receiving notification of the rise, the FCA denied any knowledge of having been consulted on this issues. Indeed I believe that the WB only eluded to the fact that they had consulted the FCA in an effort to give their rise some kind of credibility.

Reply to the comment left by "Dean " at "09/12/2013 - 12:03":

Maybe it's the new payments being taken? Or the recent call to brokers.

A big WELCOME to all that have found us recently. If you are affect or just seriously concerned you have found the best place to be to fight this. You are not alone any more.

After you've had a read through (maybe not all the comments) we look forward to trying to answer any remaining questions you might have. And please note: Don't leave it too late to sign up.

The initial letter at the end of September from Paul Field, Director of Mortgage Operations, gave me the impression that WBMC’s cost of funding must have significantly increased recently to a level that they could not meet.

I know that it is irrelevant to tracker mortgages, and that they haven’t done anything at all “to avoid passing on the increase in cost to date” because they had no right to, and that he had to write something to try to justify what has been described as larceny.

However, the impression that Mr Field’s letter had given me was wrong, because Mr Westhoff. wrote, in the Chief Executive’s Business Review for the 6 months to September:

“The net interest margin improved to 0.67% (30 September 2012: 0.42%).”

and

“As a traditional building society, the West Brom is primarily funded by retail deposits. The intense competition for retail savings abated during the period, as lenders were able to access lower cost funding through Government supported schemes and other cheaper sources of wholesale funding. The Society has continued to offer competitive rates to savers and, at 30 September 2013, 81.3% of total shares and borrowings were in the form of retail savings products.”

and

“The downward trend in retail funding costs has contributed to an improvement in net interest margin”

So there we have it. Most of their money comes from savers, to whom they pay high (best-buy rates), but still their cost of borrowing has reduced in the year to September (just before Mr Field sent his letter).

And savers are not suffering, in spite of what Andrew Jones wrote in his letter to George Eustice MP.

The premiums on our mortgages currently range from 0.49% to 1.99%, as far as I have gathered from this forum. If the cost of funding had been the reason for increasing the premiums on our loans, the logical approach would have been to impose a single premium on us all, so that we all paid the same rate, derived from the cost of funding.

The fact that they are adding 1.9% to everyone’s premium shows that it is not related to the cost of funding, but is a flat rate levy on a selected group of borrowers, in order to pay for losses incurred in the Commercial segment.

This select group excludes borrowers who went into their branches to arrange them, and so are presumably local. WB’s management would not want the local populations to discover that they cannot be trusted to honour a contract, just when they are planning an expansion in owner-occupier lending through these branches.

Just drawn up a quick spreadsheet covering all my properties registered with the class action to keep track of what WBMC owes me.

I've included extra mortgage payments, class action entry fees & payment dates so I can ensure I get back interest on payments made.....total will be almost £2000 by Christmas.

Reply to the comment left by "Appalled Landlord" at "09/12/2013 - 12:45":

That is an astonishing piece of research and appears to drive a massive great hole through all of WB's arguments. Very well done!

Reply to the comment left by "Dean " at "09/12/2013 - 12:03":

Hi Dean

How do you find where people who sign the petition live? I get a couple of recent signatories at the bottom of the screen, but they disappear quickly.

I imagine they got the website address from our flyer or from emails that we sent out. However, links to both the address and the flyer have been removed from the To Do list.

Were there many from the Liverpool area?