Chelsea mortgage rate?

ILW

samsuka wrote: »

Well duh... Thanks for the insightful, helpful comment. I don't think the forum would be much help if we all did what we should have done in hindsight would it now!!

We all make choices, some right, some wrong but we then get on with it. You could spend the rest of your life saying "its not fair". It was YOUR choice.

MarkyMarkD

"Treating customers fairly" does not mean, as many seem to think, that financial institutions have to do what you want, or what you perceive as fair.

The FSA says:

We have defined six consumer outcomes, which explain what we want TCF to achieve for consumers.

Outcome 1: Consumers can be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture.

Outcome 2: Products and services marketed and sold in the retail market are designed to meet the needs of identified consumer groups and are targeted accordingly.

Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.

Outcome 4: Where consumers receive advice, the advice is suitable and takes account of their circumstances.

Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.

Outcome 6: Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

The most relevant outcomes in this case appear to me to be 3 and 5.

Outcome 3: Consumers are provided with clear information and are kept appropriately informed before, during and after the point of sale.The standard wording of a Chelsea KFI will have defined their Standard Variable Rate and won't have said, at all, that it bore any relationship to Bank of England Base Rate or that it would rise and fall when BBR rose or fell. So I don't see how they've breached that TCF outcome.

Outcome 5: Consumers are provided with products that perform as firms have led them to expect, and the associated service is of an acceptable standard and as they have been led to expect.Once again, unless any members of staff at Chelsea told you that the Standard Variable Rate moved up and down in line with BBR, there is not breach of this TCF outcome either.

TCF doesn't say "your product has to do what you, based on your random understanding of what something means, does".

TCF is all about being up-front, and not misleading the customer. Chelsea haven't done so.

As others have posted, Chelsea are in a bad financial position. They lost a huge pile of money in Iceland. Like all other building societies, they are then getting stuffed again by the Bradford & Bingley cost via the FSCS.

They are - as others have observed - recouping a bit of this from savings rates which aren't amazing. But they are obviously having to recoup most of this from those borrowers who pay SVR (or rates linked to it) because that's the only other figure they can vary.

The reality is probably that they keep SVR high, or they go bust. I'm not sure who it would benefit for Chelsea to go bust.

Mithos

Mithos wrote: »

Just had a look at their website and notice they have some new Existing borrower products. The rates are fairly competitive I think, but the LTV is 65%.

I honestly don't think their SVR will be changing any time soon... not with this product being offered anyway; http://www.thechelsea.co.uk/mortgages/eb_product_022.html

Unfortunately for anyone on the SVR, It looks like I was right;

http://www.thechelsea.co.uk/aboutchelsea/rateinfo.html No SVR change for any of the last 3 base rate changes (site updated 18th of this month so could be old news?)


BUT I would guess the SVR will fall IF things go well for Chelsea late this month/early next. Its Annual report time . If they can show a sound operational model and not a stellar loss compared to everyone else, it might keep savers confident and stop the FSA enforcing some kind of take over with another BS/Bank . I would be sad if that happened simply because they are one of my favorite building societies (from a savers POV).

MarkyMarkD

I think that the FSA's spate of enforced mergers has dried up for a while. They will be well aware what Chelsea's results are going to be like, long before Chelsea announce them, and although I expect them to be rubbish, the rubbish items will be one-offs (mainly Icelandic write-offs) and the underlying profitability probably acceptable.

SmileyG_2

Chelsea BS have announced that their Annual General Meeting will be on the 23rd of April 2009. Can't find the venue yet (perhaps they will struggle to find a big enough venue in Cheltenham), I will await the voting pack.

Although my mortgage is elsewhere, I am a saver with the Chelsea, so I have as much interest in the future of the BS as borrowers.

Just like the Treasury Select Committee, perhaps its time for ordinary members to hold some of these gamblers (oops, sorry, directors) to account and to explain in layman's terms what the hell is going on.

SmileyG

MarkyMarkD

Last year's was at the Cheltenham Chase Hotel, so I dare say it may be in Cheltenham again this year.

Obviously you could go along and ask them questions, but I'm not sure exactly what you expect to learn ... they lent some money to an Icelandic Bank and they probably won't get it back. That's about the size of it. And the amount involved, whilst a lot of cash, is a very small amount of their total assets. I'm sure that is all they will say in response.

Mithos

MarkyMarkD wrote: »

Last year's was at the Cheltenham Chase Hotel, so I dare say it may be in Cheltenham again this year.

Obviously you could go along and ask them questions, but I'm not sure exactly what you expect to learn ... they lent some money to an Icelandic Bank and they probably won't get it back. That's about the size of it. And the amount involved, whilst a lot of cash, is a very small amount of their total assets. I'm sure that is all they will say in response.

I've never actually been those any of those meetings for any society. Do you think they are worth while (assuming you've been)?

MarkyMarkD

I have been to them for 1 society and 1 ex-society. They are generally populated by grey-haired people with nothing better to do for a day out, but some of the questions asked are quite interesting.

It gets a bit irritating when old Harry decides to ask what happened to his deposit for £10.50, or Maureen asks why her local branch closes half an hour for staff training once a week. But many of the questions are valid and the answers worth hearing.

Nationwide used to stream theirs on the internet but may not bother in these straitened times.

dwsjarcmcd

Been to far to many of these!

Easy to find the venue, just follow the beige Austin Allegros!

sanatogen

I wonder if this news will have an impact. Chelsea do say they look at their competitors when deciding how to respond to these rate cuts

Treasury takes 65% Lloyds stake


http://news.bbc.co.uk/1/hi/business/7929957.stm