Norwich and Peterborough trying to renegotiate existing Tracker contracts?

Heyman_2

There's an interesting thread going on here -

http://forums.moneysavingexpert.com/showthread.html?t=2151795

- whereby someone is claiming that the N&P are trying to enforce a huge change to their lifetime tracker mortgage - changing it from 1.15% above base to 3.4% above base, giving 10 days notice.

I knew N&P were in trouble but can they actually do this? I would have thought the FSA will be down on them like a ton of bricks....

abaxas

Heyman wrote: »

There's an interesting thread going on here -

http://forums.moneysavingexpert.com/showthread.html?t=2151795

- whereby someone is claiming that the N&P are trying to enforce a huge change to their lifetime tracker mortgage - changing it from 1.15% above base to 3.4% above base, giving 10 days notice.

I knew N&P were in trouble but can they actually do this? I would have thought the FSA will be down on them like a ton of bricks....

I cant comment on this case, however....

Lots of UK sub prime was sold at base rate+. But the 'base rate' wasnt the BOE rate. Some used 'BBR' Barclays Base Rate - whatever that is. Or just their interntal 'base rate', which they could make up as they went along.

So even if you have a base rate + 1% mortage, most can charge whatever they want to.

Thrugelmir

Heyman wrote: »

I knew N&P were in trouble but can they actually do this? I would have thought the FSA will be down on them like a ton of bricks....

Why?

On commercial grounds the N&P may have good reason.

Heyman_2

Thrugelmir wrote: »

Why?

On commercial grounds the N&P may have good reason.

Banks always have good commercial reasons for the things they want to do but that doesn't entitle them to do it! Presumably they can just up their Fixed Rates already agreed with customers as well??? Very dangerous precedent to set here if the indications are true...

Heyman_2

abaxas wrote: »

I cant comment on this case, however....

Lots of UK sub prime was sold at base rate+. But the 'base rate' wasnt the BOE rate. Some used 'BBR' Barclays Base Rate - whatever that is. Or just their interntal 'base rate', which they could make up as they went along.

So even if you have a base rate + 1% mortage, most can charge whatever they want to.

Yeah that's a good point and I thought that - but the OP in the thread seems to indicate that this isn't the case in this instance.

I'm still not sure that this isn't just an isolated case and that N&P have made a mistake. For example, a while ago someone I know almost got put onto the Chelsea BS SVR when his fixed rate came to an end, when the terms of his deal said that he should go onto Base Rate + 1% lifetime. Took a few phonecalls to Chelsea BS before they backed down!

abaxas

Also,

Who knows what is in those contracts? Without a full and details analysis of that, who knows what is right and wrong. Providing the terms are 'fair', it should stand.

System

What's the point in a lifetime tracker if they can pick and choose the thing it tracks as they please?

abaxas

Joeskeppi wrote: »

What's the point in a lifetime tracker if they can pick and choose the thing it tracks as they please?

There is no such thing as a 'lifetime tracker' unless the contract says so, without any get our clauses.

So in truth, there is no such thing. It's s simplification of the terms.

lisyloo

What's the point in a lifetime tracker if they can pick and choose the thing it tracks as they please?

You should be careful what your mortgage tracks.

If you choose one that tracks something variable then YOU should stick to your end of the contract and not be suprised when it varies.

Heyman_2

abaxas wrote: »

There is no such thing as a 'lifetime tracker' unless the contract says so, without any get our clauses.

So in truth, there is no such thing. It's s simplification of the terms.

Yes but there have been many instances recently of banks getting a hefty slap on the wrist for burying such details in the fine print and not in the Key Facts Document.

Hell, it's not even 'details' - it's just a vague catch-all clause which they appear to now be using to try to change the fundamental aspect of the agreement.

Heyman_2

lisyloo wrote: »

You should be careful what your mortgage tracks.

If you choose one that tracks something variable then YOU should stick to your end of the contract and not be suprised when it varies.

Yes but what the N&P are saying is that they want to change the modifier, not what it tracks.

Fair enough if the BofE rate goes up, but they surely can't just arbitarily change the modifier rate (i.e. +1.15% to +3.4% in this case) given that that's what the OP signed up to in the first place.