tracker mortgages- Rip off

Dan_1976

I would imagine you dont have a case, although if the FSA are still obsessed with treating customer fairly you would think they would do something.

Then again, the rate is still good, I would dump them out of principle!

Gorgeous_George

I'd expect such a move to be highlighted on TV or at least reported in the on-line news. I can't find anything so a large pinch of salt seems order of the day.

GG

London_Pumps

I have a commercial mortgage with N&P and they have threatened to increase our rate from 0.99% above base up to 3.4% above base if we don't accept a new collar rate of 4.2%. I think this tactic is deplorable and want to fight it. A group action would provide much stronger leverage and solicitors cost could be shared. If anyone is interested in doing this please let me know.

opinions4u

This seems like a similar thing to the Halifax 3% floor on their trackers.

The small print in the T&Cs allows Halifax to collar a tracker at a minimum 3% rate.

When they threatened to enforce the collar the FSA (I think, rather than the FOS) threatened court action because the wording wasn't in the Key Facts.

Here's a linky to the story.

"the FSA ... said that the collar could be unenforceable because it had not been included in the lender's "key facts illustration" - the mortgage documents given to every borrower."

Complain. Kick up a fuss. See it through to a conclusion.

London_Pumps

Unfortunately commercial mortgages aren't regulated by the FSA so my only recourse is through the courts. The cost of this makes it prohibitive unless I can contact others in the same position as me to take them on together.

Conrad

I think the Yorkshire BS did this and thier chief exec was on radio 4 arguing they as a responsible organisation had obligations to both borrowers and savers, citing the many hundreds of thousands of thier members that were savers, some of whom are elderly and rely on savings income.

There's always two sides, it is'nt black and white. Imagine in 30 years time you are reliant upon interest. You may well post a thread like; - 'N&P derisory rate on savings and I;m tied in 3 years or lose the interest - I'm a pensioner and have no money now'.

Gorgeous_George

I wouldn't argue that raising rates is not socially fair. However, the lender offered a lifetime tracker. If base rates had risen to 15% would they have reduced the trackers to match those enjoyed by fixed rate deals?

I think we should have less gimmicks in the future. All mortgages should carry the same fixed fee and all mortagges are trackers. Those who want a fixed rate could be offered insurance (against base rate oincreases) to provide the safety net that they desire.

GG

London_Pumps

I sympathise with that position however a tracker rate is an agreed margin between the customer and the lender. They shouldn't be allowed to change this margin when it suits them. It undermines the whole concept of tracker rates and also undermines the trust we have in these products.

opinions4u

London_Pumps wrote: »

I sympathise with that position however a tracker rate is an agreed margin between the customer and the lender. They shouldn't be allowed to change this margin when it suits them. It undermines the whole concept of tracker rates and also undermines the trust we have in these products.

Can't argue with that point.

In the end this thread comes down to "hidden in the small print" v "explicit in the key facts illustration" and how regulators or courts may view this.

Ultimately lenders shouldn't offer products that they can't sustain because they can destroy the business (a bit like Equitable Life's guaranteed annuities killed what had been one of the better life companies).

ju5tice

In reference to the mortgage condition I have highlighted in post 20.

I believe the get out of the jail card lies in the bracketed statement:

(but,........ "subject to the terms of the Agreement")

The meaning of the term “Agreement” means the entire agreement regarding the Loan (including without limitation the terms set out in any Facility Offer) together with the Mortgage.

The terms of the Agreement (as given in the mortgage offer letter) clearly states its a tracker mortgage at 1.15 plus base rate for the full duration of 25 years. how can this fact be ignored, its a contractual agreement.

N&P continue to give no guarantee that the rate raises will not stop here. There is something sinister in their approach.

Ju5tice