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  • JuicyJesus
    • #2
    • 2nd Dec 12, 7:39 PM
    • #2
    • 2nd Dec 12, 7:39 PM
    It's not really unfair treatment. You signed up for a loan that tracks LIBOR, end of.

    Also, in many cases LIBOR was depressed artificially. This means that those with LIBOR loans would actually have benefited financially from the manipulation. Following standard redress rules, you may well either break even or actually owe more money to the bank.
    Hi, weve had to remove your signature. If youre not sure why please read the forum rules or email the forum team if youre still unsure - MSE ForumTeam
  • Wutang
    • #3
    • 2nd Dec 12, 7:47 PM
    • #3
    • 2nd Dec 12, 7:47 PM
    I have recently become aware that loans linked to the libor rate may have been unfairly sold and there is a chance of compensation from the banks, would it be possible to have a section devoted to this please so that those of us that have been unfairly treated can swap notes.
    Originally posted by jamie11
    Your signature is so sexist I also now crave some unobtainable desperate compo too!!
    Hi, weve had to remove your signature. If youre not sure why please read the forum rules or email the forum team if youre still unsure - MSE ForumTeam
  • broad-sword
    • #4
    • 2nd Dec 12, 10:09 PM
    • #4
    • 2nd Dec 12, 10:09 PM
    LIBOR may have been manipulated but it was not unfairly sold. You took out a mortgage/loan, having no doubt thoroughly researched the best deal. For every post that gets my sympathy on this forum there are 10 that do not. On the positive side, there's probably a loose paving stone somewhere on the way to work tomorrow...
  • ~Brock~
    • #5
    • 3rd Dec 12, 9:46 AM
    • #5
    • 3rd Dec 12, 9:46 AM
    On the positive side, there's probably a loose paving stone somewhere on the way to work tomorrow...
    Originally posted by broad-sword
    ....and if not then take a detour through the park and walk under as many trees as possible, especially if it's windy at the time...you never know you might get lucky!
  • jamie11
    • #6
    • 3rd Dec 12, 4:25 PM
    • #6
    • 3rd Dec 12, 4:25 PM
    OK, it seems none of you know what I'm talking about. Instead of libor call it a 'swap loan'. Watch the news for mention of them because they are going to be big news soon just as the PPI scandal was and is.
  • antrobus
    • #7
    • 3rd Dec 12, 4:49 PM
    • #7
    • 3rd Dec 12, 4:49 PM
    OK, it seems none of you know what I'm talking about. Instead of libor call it a 'swap loan'. Watch the news for mention of them because they are going to be big news soon just as the PPI scandal was and is.
    Originally posted by jamie11
    I'd strongly suggest that it is you that doesn't know the difference between a libor linked loan and an interest rate swap. In your OP you referred to "loans linked to the libor rate" so of course no one else has the faintest idea that you meant something else entirely different.

    P.S. What is thread doing in 'Site Feedback'??
  • robrooo
    • #8
    • 3rd Dec 12, 11:15 PM
    • #8
    • 3rd Dec 12, 11:15 PM
    Didn't this story break in the Summer? Basically small to medium-sized businesses who wanted a loan from their bank were told they had also to take out a hedging swap (sometimes with a cap or collar) to protect themselves from interest rate changes.

    Generally this type of instrument has a fixed interest leg and a variable leg, linked to LIBOR. The LIBOR flows cancel out the variable loan rate and leave you with a fixed rate loan. The cap and collar adds trigger rates at which the hedge rate comes into force.

    But of course you pay a premium for the privilege of buying the swap/cap/collar, and maybe the rate that you "bought" was not as good as the natural rate you might have got with no hedge, especially as interest rates have been very low for some time.

    There were also allegations that the hedge amount was often inflated compared to the loan; that clauses in the swap agreement allowed the bank to cancel the hedge at any time, but not the borrower; that the period of hedging was longer than the lifetime of the loan; thus the allegations of mis-selling.

    P.S. What is thread doing in 'Site Feedback'??
    Originally posted by antrobus
    Indeed!
  • _Andy_
    • #9
    • 4th Dec 12, 2:09 AM
    • #9
    • 4th Dec 12, 2:09 AM
    OK, it seems none of you know what I'm talking about. Instead of libor call it a 'swap loan'. Watch the news for mention of them because they are going to be big news soon just as the PPI scandal was and is.
    Originally posted by jamie11
    So, given that you're clearly the authority on the matter, why are you bothering posting here?
  • Wywth
    P.S. What is thread doing in 'Site Feedback'??
    Originally posted by antrobus
    P.S. What is thread doing in 'Site Feedback'??
    Originally posted by antrobus
    Indeed!
    Originally posted by robrooo
    Where would you two suggest the OP posts a thread requesting a new board?
  • antrobus
    Where would you two suggest the OP posts a thread requesting a new board?
    Originally posted by Wywth
    So you think when OP is referring to the possibility of having "a section" devoted to "loans linked to the libor rate" they're requesting a new board?

    Got to be a candidate for the most misleading post of the year award.
  • jamie11
    So, given that you're clearly the authority on the matter, why are you bothering posting here?
    Originally posted by _Andy_
    That's just it, I am not an expert or an authority. That's why I'm asking.

    Didn't this story break in the Summer? Basically small to medium-sized businesses who wanted a loan from their bank were told they had also to take out a hedging swap (sometimes with a cap or collar) to protect themselves from interest rate changes.

    Generally this type of instrument has a fixed interest leg and a variable leg, linked to LIBOR. The LIBOR flows cancel out the variable loan rate and leave you with a fixed rate loan. The cap and collar adds trigger rates at which the hedge rate comes into force.

    But of course you pay a premium for the privilege of buying the swap/cap/collar, and maybe the rate that you "bought" was not as good as the natural rate you might have got with no hedge, especially as interest rates have been very low for some time.

    There were also allegations that the hedge amount was often inflated compared to the loan; that clauses in the swap agreement allowed the bank to cancel the hedge at any time, but not the borrower; that the period of hedging was longer than the lifetime of the loan; thus the allegations of mis-selling.
    Originally posted by robrooo
    That sums it up to a certain extent.

    The deal I was given, I was quite happy with...until I asked for a figure to pay it off, I knew about the early repayment charge of 1% I had no problem with that but there were also some administration charges etc written into the contract, no figures, just a clause. When the figures were sent to me I found they wanted 30K more on top of their repayment.

    Not really understanding this I set about raising it, well eventually I did raise it, the full outstanding amount and enough to pay those charges, so I asked for the figures again, this time when they sent them they were demanding an extra 60K on top of the repayment figure, since I hadn't arranged for that much I had to drop it and stay with them. That cost me a lot of money. They said it was to do with the LIBOR

    Please don't think I'm whining here, I have no trouble servicing this loan, it has however served it's purpose and I want to get rid of it. The banks have been caught out again, the FO is finding for people in my position and ordering them to compensate for the losses they have made caused.

    That's why I posted this thread, if you understand the question then please contribute, if you don't understand it then feel free to post but don't make comments about what is a very serious matter for me personally.
    Last edited by jamie11; 05-12-2012 at 3:13 PM.
  • dunstonh
    With the libor issue, if anything, consumers benefited as the rate was depressed. However, busineses could have suffered.

    http://www.ftadviser.com/2012/07/03/...N/article.html

    the FO is finding for people in my position and ordering them to compensate for the losses they have made caused.
    Can you give a link for a published case that has done this as I havent seen anything in the FOS publications yet to suggest they are. I suspect they are not doing that because until the LIBOR issue is investigated and the FSA publish their findings and instructs the lenders one what to do, the FOS will withhold any decisions until then. The issue of whether any UK retail borrowers were affected is still unknown. To suggest that the FOS have ruled on cases on a subject this complicated after such a short a period and whilst investigations are still going on and prosecutions undecided is pushing it.

    http://www.ft.com/cms/s/0/2d345e04-c...#axzz2EjkmWecb
    Last edited by dunstonh; 12-12-2012 at 11:23 AM.
    I am a Financial Adviser. Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
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