MSE News: Mortgage blow as building society hikes SVR

dasilva_2

Thrugelmir wrote: »

Have you considered that the Skipton is unable to honour its guarantees? That this move was not taken likely.


You do have an option to move to another lender. Something that many borrowers will do.

I am sure that the Skipton would not take the same view of a borrower 'amending' the agreement if that borrower was 'unable to honour it's guarantee'.
Regarding moving to another lender, why should you if you signed an agreement and more importantly what would be the point of signing another agreement with another lender if as it appears that lender is able to amend one of the major selling points of it's agreements so easily.
As someone mentioned earlier, investors in a bond paying a guaranteed rate over a number of years would be up in arms if issuer decided to not pay that rate because BOE rate has been too low for too long.
The whole idea of a guarantee is that it is just that, a guarantee.

Pincher

I believe in live and let live, so any lender that wants to weasel out of a guarantee just has to amend all existing terms and conditions to include:

"In exceptional circumstances, i.e. when the BOE goes above 8%, we will not force the customer to pay more than 10%."

It goes both ways.

sarahbennett

Thrugelmir wrote: »

Have you considered that the Skipton is unable to honour its guarantees? That this move was not taken likely.
You do have an option to move to another lender. Something that many borrowers will do.

Funny those are the same words used by the lady at the Skipton when I rang in my complaint... she said, "let's see if we can't find you another deal"... I said, "no thanks I'm quite happy with the deal you sold me, I'd just like you to honour your side"... If Skipton are unable to honour its guarantees there are several routes open to it (1) demutualisation, (2) insolvency, (3) floatation, (4) corporate sale.

In short it has more options than me. I could get an IVA (affects my credit rating) or file for bancruptsy (even worse) and in either case will almost certainly lose my home. It's simply "not cricket" to expect me to increase my liability. What they want is more money from me when I don't owe them any, because they happen to be short of cash.

If someone wants money off me that I don't owe them (as the Skipton clearly does) they need to ask very nicely, and offer a good deal. That would mean my getting the money I lent them back, with interest. Instead, what they want to do (because they didn't spend the money I gave them when I was paying 8%+ SVR more wisely) is to withdraw the guarantee they used to get me to part with the higher rates and increase my liability.

This is irrational. It is unfair and, I'm not going to take it lying down.

VIGILANT22

sarahbennett wrote: »

Funny those are the same words used by the lady at the Skipton when I rang in my complaint... she said, "let's see if we can't find you another deal"... I said, "no thanks I'm quite happy with the deal you sold me, I'd just like you to honour your side"... If Skipton are unable to honour its guarantees there are several routes open to it (1) demutualisation, (2) insolvency, (3) floatation, (4) corporate sale.

In short it has more options than me. I could get an IVA (affects my credit rating) or file for bancruptsy (even worse) and in either case will almost certainly lose my home. It's simply "not cricket" to expect me to increase my liability. What they want is more money from me when I don't owe them any, because they happen to be short of cash.

If someone wants money off me that I don't owe them (as the Skipton clearly does) they need to ask very nicely, and offer a good deal. That would mean my getting the money I lent them back, with interest. Instead, what they want to do (because they didn't spend the money I gave them when I was paying 8%+ SVR more wisely) is to withdraw the guarantee they used to get me to part with the higher rates and increase my liability.

This is irrational. It is unfair and, I'm not going to take it lying down.

You dont owe them!! ..............:rotfl:

You owe them every penny of the mortgage debt.....that part of your house is currently owned by Skipton, give them the money back tomorrow then no problem!

sarahbennett

Vigilant22, yes I do owe them every penny of the mortgage debt - over a 25 year term at up to 3% above the base rate, and of course am honouring the agreement. I'm not sure you actually understood my post, in that I do not owe them any more than that! Do you understand what I am saying? I owe them every penny on the terms it was lent and not one penny more...

The SVR agreement they signed up to does not give them the right to alter those terms nor to repossess provided I keep to my side of the deal. You enter an agreement, both parties agree the terms between them and both have to honour those terms. Do you need me to explain it more slowly?

[Deleted User]

VIGILANT22 wrote: »

You dont owe them!! ..............:rotfl:

You owe them every penny of the mortgage debt.....that part of your house is currently owned by Skipton, give them the money back tomorrow then no problem!

I gather that you don't have a mortgage with the Skipton then?
I can see this from both sides. If I were in this position, I would try to get redress from any "free" route available but wouldn't attempt to take it to court. Maybe it's a question of how much money is potentially being lost by the breach of guarantee. This will vary from one borrower to the next but will be limited by how quickly interest rates move up.

sarahbennett

Hi CR10, that's exactly what I'm doing, going via the ombudsman initially. I've been following a recent RBS rate change complaint, and the ombudsman upheld that. To the customer's horror however, it was not applied more widely for all customers, even though, as she put it, it was a blatant case of fraudulent selling.

Vigilant22, the Skipton comprises borrowers, savers and the executive plus staff. I am both a borrower and a saver (sadly not an executive though I'd love a £2million+ pension!).

Like anyone else sensibly does, I enter financial agreements that suit me. If I put my money into a fixed rate plan that pays me 10% pa provided I don't withdraw any money over 10 years (and 0% if I do, possibly even a loss, as there is in some schemes when opted out of early) I wouldn't expect to get any interest if I tried to withdraw my money after, say, 5 years. Now, if Skipton, by the same logic, were to give me back all the interest I paid (especially the really high interest in the earlier days of the mortgage) because they want withdraw their money earlier than the 25 year time frame they've signed up for, I'd certainly consider giving them the lot back now (though, in fact, I wouldn't be obliged to under the terms of our agreement).

Sadly though, that's not their offer. They'd rather just tell me and everyone else that we owe them more money than we really do.

If you are not getting a good rate on your savings it might be logical to blame the government, because they have mismanaged the financial sector, it might be logical to blame the banks and building societies, because they have wasted millions on fat bonuses among other things. It is not logical to blame those people who have entered into honest financial agreements under terms that were made clear to them at the time and which they are honouring, to every last penny.

VIGILANT22

sarahbennett wrote: »

Hi CR10, that's exactly what I'm doing, going via the ombudsman initially.

Do you fully understand yr T&C's..(honest question) some lenders can call in the loan

[Deleted User]

VIGILANT22 wrote: »

sarahbennett wrote: »

Hi CR10, that's exactly what I'm doing, going via the ombudsman initially.

Do you fully understand yr T&C's..(honest question) some lenders can call in the loan

That would make for some juicy headlines in the weekend financial press!
I heard that some banks closed current accounts of people who reclaimed overdraft charges but that was because the banks were saying that the customer clearly disagreed with the terms that they signed up to so they could no longer continue to have a business relationship with the customer.
It would be different situation surely if a customer was trying to enforce an agreement that was actually agreed at the outset. What would actually happen though if they did try to call in the loan and the customer couldn't pay?

sarahbennett

Vigilant22, yes I do (and have taken legal advice on it too). In this case, my property lawyer assures me:- no they can't.

Also, as I said, I'd seriously consider giving them back the money in full. This however is only provided a fair agreement is reached over the interest. I'd need to consult someone good with numbers, but what I know is this: it would not be reasonable for them to benefit from the interest payments I made with a long term view without some kind of rebate being made for at least some of the interest.

Specifically, on balance I paid higher rates earlier on in my SVR due to predicting the base rate would fall (I'm no economist so I don't know why this didn't occur to Goodfellow, the £630,000+ pa salary expert at the top). I was right and am now enjoying the benefit. It's not fair for Skipton to cut the agreement, supposed to be spread over 25 years, half way through and get interest I paid on the assumptions of:- (i) a 3% above base rate guarantee over 25 years, and (ii) very low base rates for part of that time. It would be like my breaking a 10% pa 10 year savings agreement mid stream and still expecting 10% pa to come back.

I was naive to opt for a Society willing to defraud me, go back on its promise and not honour its agreements, but I fail to see how I could have guarded against that. I thought I was being sensible selecting a long standing mutual, and spending a lot on specialist legal advice from a good property lawyer. According to whom by the way, Skipton's multiple use of "guarantee" and its weight both in KFI and contract, makes the 3% above base rate promise water tight.

The "exceptional circumstances" clause was not mentioned in the KFI and the FSA had already ruled any clause that could materially or significantly alter a financial relationship or the risks of entering an arrangement must be spelled out in the KFI. He does not consider, incidentally, the Skipton's citation of "exceptional circumstances" is lawful or enforceable.

Among other things he pointed out to me that: (1) while a term in a contract may be clarified, it cannot later be altered, (2) Skipton entered into many agreements since 2008 without pointing out to borrowers they were already in "exceptional circumstances" and not eligible for the guarantee spelled out in their contracts; and (3) when the base rate fell to 0.5% in March 2009 the CEO of Skipton reiterated the Society would not break its water tight pledge to borrowers, ever.

My lawyer is so confident he says he might just about relish taking this case on for a group action on a no win no fee basis. So that's a possibility, and it's almost free :-)

I hope you can have more sympathy for my situation now that I've made the effort to explain it fully.