The Real Lowdown on Abbey Flexible Plus LTV revaluation

abbeymortgagevictim

Hello All,
I write this only to be of assistance and informative to Abbey revaluation victims, like me, who have already lost access to funds that that have been overpaid on the basis that overpaid funds would always be available.

Since October 2008 when I received the revaluation letter I have been in complaint correspondence with Abbey. Trying to get straight, unambiguous answers from Abbey is like getting blood from a stone. I have identified actions by Abbey in their revaluation that appear not to conform strictly with the T&C's. My complaints are based on the terms and conditions of the mortgage. It seems to me that Abbey only want to answer complaints and queries in general terms. They seem rather reluctant to confirm specific information that directly references any of the particular terms and conditions they are relying on. I think this indicates a weakness in the justifications of their actions. This may need to be chipped away at by affected customers complaining in writing and ultimately by the FSA or the Financial Ombudsman.

I have the following comments with reference to the T&C's
1. It is stated that a revaluation is subject to written notice. None was given (in my case) as the overpayment funds were deducted prior to their letter confirming that they had made my overpayments unavailable to me. (i.e after the event and without prior written notice.)

2. Abbey have used the Halifax Index to calculate an estimated LTV. The T&C's do not appear to allow for an estimated valuation. A valuation must, according to the T&C's, accurately relate to 90% of a particular mortgaged property market value. (Not a regional estimate of similar properties generally.)

3. The Halifax index is not currently in my opinion an accurate indicator for all of the market as it is only based on sales by Halifax and their recorded sales are now massivly diminished and may also relate to many sales in distress. Therefore, in my opinion, the Halifax Index may be skewed and distorted. (Although accurate for it's own 'In House' purposes.) Historically it seems that the the Land Registry and Halifax Indexes have been more or less in line with each other. But, times have changed and there is now a significant divergence. The Halifax Index shows a greater fall in house prices than the Land registry. (Abbey may have used the Index which best suits an objective of gaining as much funds as possible from customers accounts. (Even though there are no provisions in the T&C's for estimated valuations or by comparisson by with property price indexes.) Abbey invite a customer to have at their expense an individual valuation. But, the revaluation is invoked by Abbey. Therefore, in my opinion they should be paying for accurate individual valuations.

The Land Registry Index is much more accurate in my opinion than Halifax as it reports based on ALL house sales in a period.

5. In the circumstances such as mine where overpayment funds have been taken without notice. Abbey have stated publically that they are not invoking the 19.6 clause that allows them to demand payment within 3 months. There are not any other mechanisms in the T&C's in my opinion that allow funds to be to be taken and demanded. So a vehicle for not allowing access to overpaid funds by customers does not appear to be available to Abbey at this stage. (Although they have already done this by denying overpaid sums from customers like me.) Potentially this is another area where Abbey have already invoked actions that do not strictly conform to the T&C's. In the creative arts world this would be called improvisation, or, taking a written theme and making much more of it. I simply call it a Cash Grab Rip Off.

There is in my opinion also an important lack of reference to Abbey's revaluation procedures in the key facts of the offer documentation. For instance, there is a section in the key facts warning of the risk if property prices fall but no mention that they can demand payments to bring the property loan in to line with a revised LTV if property prices fall. Why not, I wonder. Could it be that not many potential customers would consider a mortgage with a loan amount that could be varied if property prices fall. I would not have had I known as it would be impossible to be certain of my mortgage budget. This mortgage in my opinion was not properly explained in the sales brochures.

Ask for assistance and advise from your MP.

Send a report to the FSA. (They definitely invite the reporting of unfair contract terms on their website.)

The BBC reports that a further valuation will take place in January by Abbey. As house prices continue to fall more and more people may be affected by future revaluations.

My personal view is that if you have not already been affected do not wait until you are. I would draw down any previous overpayments and take them to another bank account. Or, I would take any savings I had in the savings pot and move them to another bank. In this way Abbey would not be able to grab my money without giving me notice (As they have already done in my and others cases.)

Bye the way, and for all the forum cynics. I have a 100% good payment record. Abbey customers of good standing are being affected.

This is in my opinion a toxic product that appears to have been carefully targeted at borrowers with savings. If I had not already been affected I would protect myself immediately.

I hope affected customers of Abbey keep up the complaints.

I hope affected customers will not be put off from doing so by forum cynics.

I hope that affected customers check the facts..........

The above does not constitute legal or any other advise. The above is set out to share information.

Has anyone a copy of the December 2006 conditions for this mortgage? If so could you send me a private message. I am happy to pay for any time and copying and postage expences.

drbeat

In your opinion Land Registry is more accurate? I'm sure there has been talk on here about Land Registry figures being far from accurate i.e. delays in submission and a lack of auction sales being included.

When house prices were going up did you agree with the Halifax figures? Did you think that they were distorted then or is it only now that they are going down that the figures are distorted?

In my opinion, neither Haliwide or Land Registry are showing the true extent of the crash: I think the falls are now more in the 20% region.

abbeymortgagevictim

The Land Registry Index is based on All recorded property sales in a period. Therefore, it is accurate throughout all market phases.

ad9898_3

abbeymortgagevictim wrote: »

The Land Registry Index is based on All recorded property sales in a period. Therefore, it is accurate throughout all market phases.

This is factually incorrect.

drbeat

abbeymortgagevictim wrote: »

The Land Registry Index is based on All recorded property sales in a period. Therefore, it is accurate throughout all market phases.

Newbuilds are excluded by definition, they have not normally sold more than once. If newbuilds are crashing this won't show up.
If a property has been upgraded, e.g. by adding rooms, this is not discounted, it still seems to be the same identical property selling twice
LR excludes repossessions and the auction price sold at.

Seems that LR isn't the best thing to base your argument on.

And just to ask again, did you agree with Halifax figures when prices were on the up? I'm keen to find out when the distortion you mentioned started to take place.

martinbuckley

So what the OP is saying that his/her house has not gone down in value as much as the Abbey say so?

abbeymortgagevictim

Is it not? Have you some factual references / facts evidence / that support your assertion?

In my opinion this exchange regarding the merits or not of the various house price indexes serves to demonstrate that indexes are possibly not the best vehicle in establishing a market value for an Abbey Flexible Plus motrgaged property.

ad9898_3

dr beat's post is factually correct.

drbeat

abbeymortgagevictim wrote: »

Is it not? Have you some factual references / facts evidence / that support your assertion?

In my opinion this exchange regarding the merits or not of the various house price indexes serves to demonstrate that indexes are possibly not the best vehicle in establishing a market value for an Abbey Flexible Plus motrgaged property.

Well to be honest it does seem that you're short on the facts yourself. Have you actually spoke to the LR? In my opinion it seems that you're using an index that best suits your needs! However, that in no way excuses what Abbey are doing to you! And I agree that the indexes are not the best but what else is there?

But none of the above helps you. The reality of the situation is:

a) You and others paid too much for a property
b) Abbey accepted the above and lent you and others the money.

It is because of the above that I think 50% of the blame lies with them and they should be doing something more positive to come to an agreement that benefits both parties. It takes two to tango and these banks don't seem to want to accept the fact that they too are at fault and made a mistake.

abbeymortgagevictim

drbeat wrote: »

Newbuilds are excluded by definition, they have not normally sold more than once. If newbuilds are crashing this won't show up.
If a property has been upgraded, e.g. by adding rooms, this is not discounted, it still seems to be the same identical property selling twice
LR excludes repossessions and the auction price sold at.

Seems that LR isn't the best thing to base your argument on.

And just to ask again, did you agree with Halifax figures when prices were on the up? I'm keen to find out when the distortion you mentioned started to take place.

I neither agree or disagree with the Halifax figures. My point is that I cannot find justification in Abbey T&C's for applying a revaluation based on an index. I do feel however that the Land Registry is more accurate as it is based on all recorded property sales in a period. I think that a properties value at any stage of a financial phase can only reliably be established via professional valuation. As you may have noticed Abbey are not doing this. They are applying standardised and estimated valuations of customers properties using the Halifax Price Index.

brit1234

abbeymortgagevictim wrote: »

The Halifax index is not currently in my opinion an accurate indicator for all of the market as it is only based on sales by Halifax and their recorded sales are now massivly diminished and may also relate to many sales in distress.

Yes the Halifax figures are not accurate, they underplay the true levels of falls.

abbeymortgagevictim wrote: »

The Land Registry Index is much more accurate in my opinion than Halifax as it reports based on ALL house sales in a period.

The land registry figures are about 4 months behind the Halifax figures. As the others say they don't include repossession sales. That it self distorts the land registry figures massively especially as auctions represent one of the biggest area of sales at the moment with average 40-50% reductions. However they include the other largest area of sales the shared equity properties which distorts them higher than they should be. Also they have been affected by years of newbuild/buy to let fraud and hence highly overvalued.


The simple fact is on average properties that sell are 30-40% reduced from peak. That is the current market level like it or not.

Abbey are just trying to protect themselves from the falls and the market is certain to fall further with even less funds available next year.

What you need to do is put as much equity into your overvalued house and accept the price might fall 40-60%.