West Bromwich Building Society Tracker Margins Legal Action

I have just spoken to Justin.

An interesting observation is that many of the people have said that they only owned 1 property at the time of taking the mortgage with West Bromwich. If this is correct it will pose a major problem for West Brom as these people would definitely have been consumers at the time of application on that basis and if the loans were granted after Oct 2004 the FCA will have no choice but to get involved.

Judging by the comments, Justin's Postman(woman) will have a very heavy mail bag for the next few days!
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I've had a holding response from the Financial Ombudsman Service today to say that they will reply as soon as possible but within the next six weeks. I'll let you know as soon as I hear further.

In addition, I had ISA's with West Brom which I am pulling out straight away and re-investing elsewhere!

Reply to the comment left by "Mark Alexander" at "07/10/2013 - 18:05":

It also shows that they were not basing their information on credit checks that were carried out at the time of the mortgage which is what they told me the second time I called.

LEGAL ACTION UPDATE:

I am writing to update you all on the responses received so far. To date we have paperwork in respect of 19 mortgages. Most people have one or two mortgages with West Bromwich. One has six.

It is really important that you tell us how many properties you owned at the time you took out your West Bromwich mortgage as this will affect the way we run the case. In that number you should include the property you obtained finance from West Bromwich.

If you have registered with us via the Property118 forum, you will receive an automatic response explaining what to do next together with a link for a letter of instruction. A number of people have emailed me directly. I apologise for not responding to you sooner. I will respond to your email eventually, but you can appreciate, I have a pretty full inbox.

My next step is to write to West Bromwich which I will be doing this week.

I will then be instructing our barrister to provide us with an opinion on the case. I am not expecting the barrister to read all the comments on this forum as some have suggested - this is not his job. We will be putting a detailed instruction together based on the documentation we have received, although we will do our best to incorporate some of the relevant comments where we deem it appropriate.

Depending on what he believes are the merits of the case we will then look into obtaining litigation funding for the proposed group action. This is to minimise the on-going costs - as this type of litigation is very expensive and to protect you from any adverse cost consequences. We are currently speaking to a number of different litigation funders.

The funds that everyone is sending in is being put into our client account. We are only going to draw down on that money for the work we do or expenses we incur in connection with this case. If there are excess funds and we don't get a positive opinion from the barrister then we will refund any unused funds.

From the conversation I had with WBBS they are basing the multiple properties scenario on a very recent check . I took out 2 BTL with them in 2006 and a further BTL with another mortgage provider in July 2013 , this third one has apparently made be eligible for the interest rate hike. In my letter of complaint I have asked them to provide details of exactly what checks they have completed and the legal basis for these checks.

Reply to the comment left by "Nicola Everden" at "07/10/2013 - 18:11":

Wonderful! Perhaps they should remember the old saying "oh what a tangled web we weave when first we practise to deceive".

Just finished copying paperwork. Cheque for £480 and documents will be in post tomorrow.

Very interesting thank you Justin and Mark. ALL our mortgages were taken out post-2004. We took out the first (largest) one in 2004. Based on a good experience of West Brom, the next two were taken out in 2006.

Reply to the comment left by " " at "07/10/2013 - 11:42":

I've just e-mailed my MP using the link provided by Dean Turner. I set out below what I have said in my e-mail in case it helps anyone else / saves time. I've left gaps in square brackets for specific information to be completed.

Dear [ ]

I don't know whether you have seen in the press that the above building society has decided to increase tracker mortgages for some 7,300 landlords by 2%. They are specifically targeting "professional landlord's" i.e. those who have three or more rental properties despite the fact that there is no legal definition of what constitutes a "professional landlord". They have carried out a credit check on all of their borrowers to see what other mortgages they hold with other lenders in order to decide who fulfils the criteria. This in itself is an abuse of the credit check system which is not to be used for deciding whether or not members of the public fall into a certain category that can have their mortgages increased. In addition this will leave a footprint on my credit rating history and is totally unacceptable.

My understanding of the basis of the mortgage that I had with them was that it could only ever vary when the base rate changed. They are now telling me that they are able to adjust the tracker rate margin as well. Had I known about this at the time the mortgage was taken out I would have chosen another mortgage product or lender. The building society are relying on a clause that is buried in a booklet entitled "Information you need to know about your Mortgage". This ability to increase the rate was not mentioned in the offer loan or the mortgage illustration key facts sheet that was provided by the broker. In fact the booklet is not mentioned either although West Bromwich say that it is noted in the mortgage deed that I signed. Case law supports the requirement for important conditions to be made clear and obvious in contracts and this is definitely not the case in the mortgage documentation that was issued to me.

This increase which is to take effect on 1 December 2013 will increase the payments on my buy to let mortgage by £[ ] per month. My main concern is that other building societies may decide to follow suit if they see West Bromwich getting away with this. Having [ ] rental properties in [ area ] this will cause me a huge problem if this were to happen. Although landlord's often receive bad publicity I do feel that we provide a valuable service and because we have benefited from low interest rates for the past few years we have been able to keep rents down and at a realistic affordable price. I simply won't be able to sustain paying an extra £[ ] per month and obviously this is not an increase that I can pass on to my tenants. I know that other landlords in the [ ] area are going to be in a similar position. This in turn may cause [ ] Council a huge problem if properties are repossessed and sold making many people homeless as a result.

I am supporting a Class Action group called Property118.com which is gaining a lot of support from landlords up and down the country but we really could do with some political support and have this situation highlighted in Parliament.

If you could assist, I and many other landlords would be very grateful.

Regards

Reply to the comment left by "Nicola Everden" at "07/10/2013 - 19:51":

Thank you Nicola for the template letter to send to local MP. It will certainly save me a lot of time trying to find the wording which you have done brilliantly. Many thanks.