tracker mortgages- Rip off

ju5tice

Dear Forum Readers,

I would love to hear from other Norwich & Peterborough mortgage customers, who recently have had their tracker rates changed against the original agreement.


Kind regards

Ju5tice

Thrugelmir

Seems as if the N&P have problems

Norwich & Peterborough (N&P), which is Britain’s tenth largest society, is to close 10 of its branches, putting more than 50 jobs at risk.
The branch closures represent one fifth of its 54-strong network and the news comes just a day after it emerged that Chelsea and Yorkshire Building Societies were in merger talks.
N&P said it can’t compete with state-owned banks and those where savings have a 100% Government guarantee.
The majority of the branches affected are on the borders N&P’s east of England heartland. The Unthank Road branch is the only casualty in Norfolk, while the Halesworth branch is the only one to close in Suffolk.
All 10 branches will close in March 2010 and the other branches affected are in Ashby, Bedford, Chelmsford, Clacton, Colchester, Immingham, Kettering and Spilsby.
N&P has already axed 36 jobs this year and has cut administration costs by 20%. The mutual has experienced a fall in income this year with further falls expected in 2010.
Matthew Bullock, N&P’s chief executive, described it as the “saddest day” he had had in his 11 years of being chief executive.
He told Money Mail: “I am truly sorry for those customers affected because I think that they like us. I’d like to say sorry to the staff, too. We have to get our costs back to cover the fall in income in the business.
“The banks have not competed for savings for years and suddenly they are offering rates that we cannot. We can’t reprice our mortgages, as we have made commitments to people. This should allow us to get ahead again and ensure the business is healthy going forward,” added Mr Bullock.

ju5tice

Yes I have read the article in Finance Markets. Read carefully the last paragraph from the Chief Executive statement:

"We can’t reprice our mortgages, as we have made commitments to people."

Not a man of his words ! Letters have gone out to thousands, changing their exsisting tracker rates.

Thrugelmir

ju5tice wrote: »

Yes I have read the article in Finance Markets. Read carefully the last paragraph from the Chief Executive statement:

"We can’t reprice our mortgages, as we have made commitments to people."

Not a man of his words ! Letters have gone out to thousands, changing their exsisting tracker rates.

So what's their justification for changing lifetime tracker rates?

flyinglemming

ju5tice wrote: »

Hi,

From my mortgage documentation it states :

" the interest rate charged will be either 1.15% above Bank Base rate or 3%, for the Mortgage Term."

I was not given a key facts document.

Sounds to me that they're in violation of the contract even without the key facts, the way I read it is that the alternative is a flat 3% which should still be less than "Base Rate +3.4%".

As mentioned from the other posters, you should file a formal complait as imo, you stand a decent chance of getting the rates reverted or at least down to 3%.

Rob71

ju5tice wrote: »

" the interest rate charged will be either 1.15% above Bank Base rate or 3%, for the Mortgage Term.".

Doesn't that just mean the floor is 3%? It doesn't sound like they would be honouring 1.65%. I notice they don't do a tracker anymore (not that I could find anyway).

Thrugelmir

ju5tice wrote: »

I was not given a key facts document.

You would have received a booklet or printed papers with your original mortgage offer.

Out of interest I found mine. As I too have a lifetime tracker but with a different building society.

It runs to 19 pages so is far more than a key facts document.

Amongst the clauses that relate to variation of interest.

These stand out.

(a) to meet relevant regulatory requirements.

(b) to reflect changes in the costs incurred by us in providing the Mortgage.

Very broad in wording with relevance to the current troubled financial times.

dunstonh

is there any point in taking this to the FSA ? what can they do ? How long will it take ? Likely outcome ?

FSA dont handle consumer complaints. They will just forward any complaint on to N&P.

Are you sure its a lifetime tracker? If it was a fixed term tracker now expiring then you could understand the increase. However, a change like that on a lifetime tracker doesnt seem right.

ju5tice

Dear Forum Members,
Firstly, I would like to thank everyone who has contributed to this thread.
I have today have had feedback from Norwich & Peterborough, as to how they can make changes to my life time tracker mortgage.
From the 22 page Mortgage Condition document, the one sentence that they are using to justify the tracker rate change is as follows:
For the avoidance of doubt the Borrower hereby declares that it is noted that the Society may at any time (but subject to compliance with the procedural requirements set out herein and subject to the provision of the Act where the Agreement is a Regulated Agreement and subject to the terms of the Agreement) during the subsistence of the Agreement increase the Interest Rate or any element thereof at its absolute discretion without reference to any conditions or restrictions.
Where;
The “Act” means the Consumer Credit Act 1974
The “Agreement” means the entire agreement regarding the Loan (including without limitation the terms set out in any Facility Offer) together with the Mortgage.
Could Forum Readers give their opinion on the above statement.
The “Agreement” that I have with them through the mortgage documents clearly states the rate to be charged will be 1.15%+ Bank Base Rate for the Term of the Mortgage.
Do I have a valid case against them ?

maveli

I have an HSBC life tracker and of the T&C says they can change the rates or any other condition on the mortgage if there is a significant change in mortgage market. I thought they will make use of this when the rate dropped to 0.5. But fortunately that didn't happen.

But I think these type of T&C you will find in all bank so that they can use it whenever they like.