MSE News: Mortgage blow as building society hikes SVR

dasilva_2

I think that the discussion is getting off track.
People come on here to discuss the threads and get advise. Having been registered on here for less than a week I have noticed one or two posters who seem to have nothing better to do that just pick spots off other peoples perfectly sensible post's.
Unfortunately, we are not all perfect robots.
Getting back to the point, I think we can argue till the cows come home but principally the Skipton have sold a product which has as it's main selling point a 3% guarantee. The contract was presumably drawn up by legally and financially competant people. As we are constantly told, the BOE rate can go up or down.
The exceptional circumstances clausewas included and the Skipton have now defined the two exceptional circumstances they are relying in tho invoke this clause. The legal argument cannot refer to any other so called exceptional circumstance, (in other postes other people have mentioned capital resrves, profitability etc.etc). Thes are irrelevant as the Skipton has not used those definitions to define 'exceptional circumstance'. The result of there actions may alter these points but they are not explicitly defined as 'exceptional' by the Skipton.
So I think there are two legal arguments.
1.) Should a contract contain a term such as 'exceptional circumstance'? Here we will have one or two posters saying but the contract did contain it and you had the choice to sign it. My answer to that would be that there are plenty of contract terms disputed legally retrospectively and a major factor would be that the Key Facts leaflet failed to mention a clause that would have removed the guarantee most people were taking the contract out for.
2.)What are 'exceptional circumstances' and should just one party involved in the contract be able to define them midterm. Although the cited definitions used to define 'exceptional circumstance' are unusual, it cannot be, that they could not have been seen as a possibility. In marketing this product, the Skipton would have had to look at a wide range of possibilities and an interest rate of less than 2.7% must have been one of those possibilities and also the difference between BOE rate and their own saving rate must have been also so why did they not include an 'explicit' term in their contract to cover this.
The above is only my opinion, other people obviously have other opinions but what is needed is that these points are put to the authorities and ultimately the only people who can rule on the legality of the contract, the courts.
To do this we need to get behind SarahBennet or whoever else wants to come forward and fight. Because as has been said, if the Skipton can do it then others will follow.

Joe_Bloggs

I have read all the posts and I thought I should thank dasilva for an excellent summary.

I am facing a SVR situation with Nationwide soon. They say they will track the BoE base rate by 2%. I have enough equity on my side to move elsewhere if necessary. I would ride the variable rate as my savings are paying more (Mostly Halifax ISAs).
J_B.

Thrugelmir

dasilva wrote: »

I think that the discussion is getting off track.
People come on here to discuss the threads and get advise. Having been registered on here for less than a week I have noticed one or two posters who seem to have nothing better to do that just pick spots off other peoples perfectly sensible post's.
Unfortunately, we are not all perfect robots.
Getting back to the point, I think we can argue till the cows come home but principally the Skipton have sold a product which has as it's main selling point a 3% guarantee. The contract was presumably drawn up by legally and financially competant people. As we are constantly told, the BOE rate can go up or down.
The exceptional circumstances clausewas included and the Skipton have now defined the two exceptional circumstances they are relying in tho invoke this clause. The legal argument cannot refer to any other so called exceptional circumstance, (in other postes other people have mentioned capital resrves, profitability etc.etc). Thes are irrelevant as the Skipton has not used those definitions to define 'exceptional circumstance'. The result of there actions may alter these points but they are not explicitly defined as 'exceptional' by the Skipton.
So I think there are two legal arguments.
1.) Should a contract contain a term such as 'exceptional circumstance'? Here we will have one or two posters saying but the contract did contain it and you had the choice to sign it. My answer to that would be that there are plenty of contract terms disputed legally retrospectively and a major factor would be that the Key Facts leaflet failed to mention a clause that would have removed the guarantee most people were taking the contract out for.
2.)What are 'exceptional circumstances' and should just one party involved in the contract be able to define them midterm. Although the cited definitions used to define 'exceptional circumstance' are unusual, it cannot be, that they could not have been seen as a possibility. In marketing this product, the Skipton would have had to look at a wide range of possibilities and an interest rate of less than 2.7% must have been one of those possibilities and also the difference between BOE rate and their own saving rate must have been also so why did they not include an 'explicit' term in their contract to cover this.
The above is only my opinion, other people obviously have other opinions but what is needed is that these points are put to the authorities and ultimately the only people who can rule on the legality of the contract, the courts.
To do this we need to get behind SarahBennet or whoever else wants to come forward and fight. Because as has been said, if the Skipton can do it then others will follow.

Fact the Skipton BS has to operate and is governed by rules laid down by the FSA. This is non-negotatiable.

So contesting a decision made by the Board of Directors to invoke a change to contractual terms, has to have more substance than expecting the Board to have a crystal ball to forecast future events. Or not specifying a precise definition of "exceptional" in every loan agreement.

dasilva_2

Thrugelmir wrote: »

Fact the Skipton BS has to operate and is governed by rules laid down by the FSA. This is non-negotatiable.

So contesting a decision made by the Board of Directors to invoke a change to contractual terms, has to have more substance than expecting the Board to have a crystal ball to forecast future events. Or not specifying a precise definition of "exceptional" in every loan agreement.

Fact. Contract law as defined by statute and case law is non negotiable.

The whole idea of management is to forecast future events. You could say the management of a financial institution should be better able to forecast future events than a consumer, hence the consumer goes for a contract given by that financial institution, with a guarantee.
This is my point, unless you are a judge ( i am only assuming you are not), it is not for me or you to determine wether there is enough substance in an argument.
My argument (and thats all it is) would be that it would not be difficult for a financial institution to include an explicit clause in its contract refering to a bottom limit to the guarantee it is offering rather than retrospetively quoting a very explicit BOE rate(ie 2.7%, not 3% or 2%) as been an definition of 'exceptional'.

de1amo

as a fun thing--i have just looked up ther meaning of 'exceptional' in a Oxford dictionary--very unusual-unusually good

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nothing good about anything the skipton are doing with this!

dasilva_2

Thrugelmir. 'So contesting a decision made by the Board of Directors to invoke a change to contractual terms'

My argument is in your reply. You are quite rightly saying the 'board of directors have invoked a change to contractual terms'
Now is it a 'change to contractual terms' or 'invoking a contractual term'.?
The difference is the argument.

de1amo

İm sure if i invoked the terms of my mortgage contract that i signed up for the world would drop on me --no matter how the change was worded--we are getting into semantics here!!!

dasilva_2

de1amo wrote: »

İm sure if i invoked the terms of my mortgage contract that i signed up for the world would drop on me --no matter how the change was worded--we are getting into semantics here!!!

But it is semantics we are arguing about. The whole point is wether the skipton have changed the contract mid term or wether they are simply applying (ie: invoking) a legitimate term of the contract. One could be upheld in a court of law, the other could not.
I think in my opinion they are changing the contractual terms.

de1amo

i concur with that but we seem to be getting into the court room talk on a ley mans thread-sarah needs to do the process before the legal eagles do battle over the words--we should support the action in anyway we can!

dasilva_2

de1amo wrote: »

i concur with that but we seem to be getting into the court room talk on a ley mans thread-sarah needs to do the process before the legal eagles do battle over the words--we should support the action in anyway we can!

I agree, we can argue forever .
Don't know wether I'm right linking this but here goes, every little helps.
Google 'leon kaye solicitors'
quote from their website.'We are currently investigating the legality of Skiptons decision to not honour the Guaranteed rate and whether the downturn in the economy would warrant a trigger of the “exceptional circumstances” clause pursuant to the terms of the mortgage contracts. Furthermore we are investigating borrowers rights regarding these clauses under the Unfair Contract Terms Act 1977 with a view to establishing whether borrowers have a claim against Skipton.'