MSE News: Mortgage blow as building society hikes SVR

The_Dentist

MarkyMarkD wrote: »

Your FSA IF example is not the best one for your case ... the reason they were unhappy with that clause was that it gave the right to vary terms without specifying what reasons would be required and without giving the option to exit freely. Skipton have, of course, given the option to exit freely. I accept that the first part of the argument appears to match up with the IF case.

The exiting freely issue is quite interesting. Can I suggest to anyone who is making a complaint, whether that be on the grounds Sarah suggests or any other reason regarding an, "unfair contract term" that they should consider if the option given by Skipton to exit is genuine.

In any sort of Unfair Contract Terms case the counter balance of being able to exit the contract freely is quite a powerful one. This means the contract is far less likely to be held to be unfair as the party who is being treated unfarily can simply end the contract, balancing out the unfairness. Skipton of course know this which is why they have bent over backwards to not only afirm borrowers contractual rights to leave but also to give enhanced rights to exit the contract which they were not contractually obliged to do.

I would treat this offer to terminate by Skipton with the contempt and scepticisim it deserves. It is an attempt to comply as far as possible with the letter of the law but not the spirit of it. For some (if not most) borrowers it is not reasonable in a contract of 30 years duration (that period will of course vary per borrower) which by its nature is designed to last for a considerable period of time and designed principally for a purpose of allowing a borrower eventually to own a property outright (without charge) to allow the Borrower to exit the contract at some point during the contract and pretend that is going to be fair. This is not a year long insurance contract etc, this is a majot financial committment over an extended period of time by two parties relating to a charge over land.

Everyone's individual circumstances will be different. But if you are in negative equity or on a high LTV are there any other products actually avaialble to you from any lender? If not I would suggest the Skipton's offer to allow you to exit the contract freely is disingenuous. If you converted your home onto a BTL (which the press tells us is currently popular as people need to move home for work etc but can't sell) with even a moderate LTV, are there any other products avaialble to you anywhere? Even with a low LTV on your own home is it reasonable for the Skipton to ask you to leave where you will face a higher rate of interest? Is that really leaving freely (without penalty). I don't think it is. You could also leave the contract freely by selling your property, again due to the disproportionate implications of that, that is not leaving freely.

It is not always going to be the case that allowing one party to freely walk from a contract will make the actions of the other party fair and I would suggest that this is one of those cases. The FSA's guidance on Unfair Contract Terms alludes to this. A mortgage contract is not generally a contract of the type, with which one party can enforce the term of a contract (to the detriment of the borrower) and where that unfairness can easily be balalnced with a right to terminate.

MarkyMarkD

I think we've realised that sarah's argument boils down to "the exceptional circumstances clause is an unfair contract term" and my view is the opposite.

Copying random Skipton customers' views from other blogs isn't going to add anything to the argument.

And standard forum etiquette is not to post repeatedly - combine your thoughts in one post, not 10 consecutive ones. There is an "edit" button for a reason.

I'm happy enough to wait and see how things pan out on this one.

poppy10_2

sarahbennett wrote: »

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

Hey, please don't take it personally. Noone's attacking you as a person, it's just that your point of view is utter rubbish.

sarahbennett

poppy10 wrote: »

Hey, please don't take it personally. Noone's attacking you as a person, it's just that your point of view is utter rubbish.

That sort of comment only reflects badly on you, even sounds a bit desperate. Anyhow as should be clear by now, it's not just my point of view, it's Dasilva's, and The Dentist's among others on this thread, it's the CEO of Which Magazine's, it's the personal finance editor of the Financial Mail's, it's the FT's, John Redwood's along with countless others ... I suppose you could argue I am not therefore alone in talking "utter rubbish" as you put it, in a comment that can only be described as a spectacular own goal...

sarahbennett

MarkyMarkD wrote: »

Copying random Skipton customers' views from other blogs isn't going to add anything to the argument

Er, I didn't copy customer's views or blogs so I'm confused by that comment though accept that next time I'll collate more into one post...

Yes let's see how things pan out, as you can acknowledge there are arguments on both sides and I appreciate the civility of your post.

MarkyMarkD

Thanks, Sarah. I posted that and then read back and thought - hm, those are probably the journalists' comments, not customers' views. But that doesn't make them any more valid.

Poppy10 is being rather harsh! Your view isn't utter rubbish; it's (now) rather well reasoned and there is merit on either side of the debate.

howardtheduck

I just want to say that sarahbennet has my respect, support and admiration for standing up for all our rights as consumers.

What Skipton Building Society has done in arbitrarily reneging on its guarantee to never raise its SVR more than 3% above base rate is deplorable. I hope that everyone who has a SVR Skipton mortgage will seek to challenge Skipton Building Society's unjust action. Do not let apathy or an unwarranted sense of futility stop you from doing the right thing. Like the 'Tank Man' of Tiananmen Square, you can serve to inspire others.

"The only thing necessary for the triumph of evil is for good men to do nothing."

I would urge everyone who has a SVR Skipton mortgage to make contact with Leon Kaye solicitors based in London who are in the process of preparing a legal challenge to the SVR increase by Skipton. Simply Google Leon Kaye solicitors to access their website and from there you can access the Skipton Building Society Action Group. There is also an email address for Leon Kaye Solicitors on the website to which you can direct any queries you have in respect of the proposed claim.

Thank you

"Let justice be done, though the heavens fall"

(IANYL)

sarahbennett

This discussion is continuing following further breaking news on this thread:
http://forums.moneysavingexpert.com/showthread.html?t=2285195

And if you are interested in expressing to Skipton and others that they should not consider themselves above the law please take a look at this petition, and add your autograph to it:-

http://petition.zedbox.com

The petition will serve as the central contact list for all those who oppose Skipton breaking their SVR promise. I will send everyone who signs it one email (just one mail) with input on further action that can be taken, and providing the option to stay updated as to progress. I am a Skipton customer without commercial interests in any specific routes we could take, (that may well include Leon Kaye) but I'd like to investigate all our options and present these, along with free resources, template letters etc., impartially. I recently got PM'd by someone saying the same had happened to him at the Norwich & Peterborough Building Society, who he says have raised guaranteed lifeterm tracker rates by 200%, so I suspect the problem is much wider than just the Skipton, and that it may be a good idea to share our experiences, I am also thinking of taking legal action.

Anyone who wishes to can private message me at MSE.

sarahbennett

MarkyMarkD wrote: »

I think we've realised that sarah's argument boils down to "the exceptional circumstances clause is an unfair contract term" and my view is the opposite.

Not quite, even if found fair it was inappropriately invoked, should not have been invoked due to "debt and improvidence" (financial circumstances of Skipton) or for any interest rate amount (severity of a usual circumstance) but for a different type of circumstance altogether.

There are other arguments as well, but court is the place for those, if Skipton continue to insist on reneging on their guarantee for the exceptional circumstances they have given of "interest rate not as we like it" and "we're not making as much profit as we'd like out of it"...

MarkyMarkD

I don't think that I accept your distinction, but you're welcome to qualify my description of your argument of course!

Perhaps I should re-express what I think you're saying:

- Skipton's exceptional circumstances clause is unenforceable because it is too vague;
- Even if it were enforceable to have an exceptional circumstances clause so vaguely defined, it would be unacceptable to define (after the fact) in such a way as to cover "base rate persistently below expectations" and "margin between base rate and savings rates persistently below expectations" because both of those are exceptional factors affecting exactly the substance of the guarantee.

The first part of the above is debatable - and we hold differing viewpoints, and I can accept that they both have some merit.

But your consistent belief that an exceptional circumstances clause cannot cover the circumstances of the clause is not so logical, and I am certain that there will be case law against you on that.

An exceptional circumstance is any circumstances which could not be predicted with any degree of likelihood. And the current circumstances ARE exceptional on that definition. The only point worth debating is whether a widely drawn "exceptional circumstances" clause is enforceable at all - irrespective of the interpretation placed on the clause by one of the parties at a later date.

I would predict that the chances of losing on (a) but winning on (b) are rather slimmer than the chances of winning on (a) alone.