MSE News: Mortgage blow as building society hikes SVR

sarahbennett

"an onerous commitment to a ridiculously low SVR"

Glad YOU AGREE THAT THEY MADE A COMMITMENT

sarahbennett

VIGILANT22 wrote: »

You probably haven't enjoyed such low rates since taking a mortgage.

That's exactly my point, I was paying much more than a fixed rate mortgage when the Base Rate was higher in the reasonable expectation I could benefit from decreases in the Base Rate without fear they would effectively tear up their agreement at that point (or even, a year into that point)...

We'll see what the courts have to say about a unilateral, retrospectively defined, entirely changeable at any time and at the other party's discretion contract term , set alongside the repeated use of the word "guarantee"

sarahbennett

MarkyMarkD wrote: »

You dilute your case with weak arguments about "poor hard working families" and ex-CEOs' salaries.

Your arguments that even though 4.95% is 1.45% more than the rate that is guaranteed gives borrowers no grounds to complain is weak, see my window cleaner example...

It is, I agree, a good rate I have now (3.5%) but they made an agreement with me and I will hold them to it, not just for me but for all their mortgage customers.

The fact that other people's SVR and fixed rates might be worse is neither here nor there, indeed it is off topic. I'm pretty well educated and the overwhelming impression I got when I signed the agreement was that it was a guarantee. I never thought an agreement sold to me on the basis it would enable me to benefit from any falls in the base rate could later retrospectively define a certain base rate level, namely a low base rate (2.7% or below) as being an "exceptional circumstance..."

And they've left it a bit late to tell me I am in "exceptional circumstances", being as we have had these since 2008, as finance people they should know that interest rates go down as well as up, and it would have been easy to have formulated a model whereby they could have defined in their contract the points at which their guarantee would break...

sarahbennett

Looks like it's Vigilant and Mark versus Sarah... anyone else like to back me up here?

sarahbennett

"But mortgage experts say Skipton only has itself to blame because it has done little lending over the past year."

http://www.walletpop.co.uk/2010/01/21/skipton-tears-up-mortgage-contracts-and-raises-svr/

sarahbennett

""I must say I enjoyed reading the Skipton’s account of what it is doing. Their site begins with an all too true remark “At Skipton BS we know every penny matters”. No doubt that’s why they need more of them.""

http://www.johnredwoodsdiary.com/2010/01/21/rising-interest-rates/

sarahbennett

Anyone given a mortgage by Amber Home Loans should also contact this group. Amber is a subsidiary of Skipton, so of course, they are trying it on as well

sarahbennett

"Skipton Building Society has announced it will increase its standard variable rate (SVR) by 41%, from 3.5% to 4.95%, despite guaranteeing its borrowers that the SVR would never go higher than three percentage points above Base Rate – currently 0.5%. The fifth largest building society in the UK is invoking a clause in its contract that says it can rip up the mortgage guarantee in exceptional circumstances – which it claims it now finds itself in."

http://uk.biz.yahoo.com/22012010/389/danger-mortgage-borrowers.html

sarahbennett

"Having read the through The Unfair Terms in Consumer Contracts Regulations 1999) I would agree that this interpretation of exceptional circumstance does fall foul of the law. You can put such statements in a legal contract but they are very difficult to uphold when challenged. Any statement that is ambiguous such as 'exceptional circumstance' will be ruled in favor of the customer when taken to court and such statements certainly aren't allowed to be used where it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.
Basically its a 'try on'. If you don't challenge it they won't back down.
Write to them and state that you disagree with the legality of the contract change. If they don't back down take them to court. I know it can be expensive but so is the increase in SVR."

http://blogs.thisismoney.co.uk/2010/01/angry-skipton-borrowers-turn-to-facebook.html

The_Dentist

MarkyMarkD wrote: »

Dentist

You are living in a strange world if you imagine that parties seeking to rely on their contractual terms are required to give a full legal case to the other party to the contract.

I don't think that. I didn't think it at the time I made the post to which you are referring and I do not think it now.

What I do think, as described in my original post is that where one party (which is a regulated institution) decides to lay out its legal case and does so to the extent it quotes specific contractual terms in an infomration leaflet sent out to all borrowers it is unfair not to explain the whole case on which the Society is relying. It would not be unfair if what was missed out was detail which only lawyers would understand etc. In fact going into huge detail might be unfait in itself as it would not be intelligible. The reason it is unfair is what has been missed is material information providing a justification for the Society defining "exceptional circumstances".

This is not a business to business contract where parties are deemed to be sophisticated and free to do and say what they want either themselves or via lawyers. This is a regulated financial institution providing information to borowers. Those communications must be clear, fair and not misleading. The Society has chosen to go into quite a lot of detail in the information it has communicated which I would think in this case is reasonable given it is seeking to rely on something which is fairly obscure. What is unfair and misleading is that this communication does not deal with all of the main subject matter, it glosses over it. The Society can choose to send out a 20 page highly detailed leaflet or a two page short one, but it must treat all of the material issues with the same level of detail. It cannot choose to expalin part of the contract in huge detail (i.e. the part it is most confient about in what it says) and then gloss over a part of the contract which is equally important to the issue it is communicating but which it doesn't want to bring to borrowers attention because it doesn't think it has any contractual right to do as it is now proposing.