MSE News: Skipton faces legal challenge over mortgage rate hike

Gorgeous_George

So we let it go bust and the receivers call in the mortgage book. Would mortgage holders prefer to pay a higher rate or repay their entire debt (by moving their debt elsewhere)?

My lifetime trackers are just BofE +0.74% and BofE +0.89%. I am really enjoying the extraordinary low rates. However, I'd consider switching to a 4% 10 year fixed rate if my lender was likely to fold. Unfortunately, their 10 year fixed rate is 5.29% and comes with a £999 arrangement fee and a £150 booking fee.

Maybe Skipton should be demutualised.

GG

My ISA is 3.5%. I bet they don't have all their mortgage book covered by ISAs paying 1.5%. Pointless argument

sarahbennett

Gorgeous_George wrote: »

So we let it go bust and the receivers call in the mortgage book. Would mortgage holders prefer to pay a higher rate or repay their entire debt (by moving their debt elsewhere)?

I think that the way it works in insolvency is that these debts (that are assets) would need to be sold/passed on, with their terms and conditions intact. I see no precedent for insolvency affording any rights to alter terms and conditions of contracts so the mortgage holders would not suffer a financial penalty in that eventuality.

Gorgeous_George wrote: »

My lifetime trackers are just BofE +0.74% and BofE +0.89%. I am really enjoying the extraordinary low rates. However, I'd consider switching to a 4% 10 year fixed rate if my lender was likely to fold. Unfortunately, their 10 year fixed rate is 5.29% and comes with a £999 arrangement fee and a £150 booking fee.

Hi George, just so you know Skipton's 10 year fixed rate is 5.39%, not 4% for those borrowers it has decided not to honour its guarantee with...

Gorgeous_George wrote: »

Maybe Skipton should be demutualised.

Couldn't agree more. It has no "right" to stay a mutual in the context, and though I'm a member who wouldn't benefit personally from demutualisation I agree it is more appropriate in the context...

Gorgeous_George wrote: »

My ISA is 3.5%. I bet they don't have all their mortgage book covered by ISAs paying 1.5%. Pointless argument

OMG, where did you get your ISA from and is it still available? Agree it is a bit of a pointless argument, their finances have nothing to do with my holding them to account on their broken promise, just as my finances would have nothing to do with them seeking a possession order if I break my promise to pay in accordance with the terms I agreed.

JPS29

@ George,

re the debt being called in if they go bust..............

Surely someone who is making the repayments can't be punished because the lender cant keep its obligations.

What about borrowers who cant simply remortgage with another lender, due to neg equity, no deposit, changed credit profile since commencement of mortgage. What would happen to these people?

From speaking with my broker I was of the understanding that the book debts/mortgage would be sold on and the terms have to be adhered to by the new buyer?

Gorgeous_George

Who would buy these unprofitable mortgages that had caused Skipton to go bust?

I am not saying that it is fair. Only that it may be the lesser of two evils.

GG

JPS29

Surely if no one buys then this is where the govt steps in. There must be thousands of customers here who can't remortgage, Would the govt really make them lose/sell their homes?

Gorgeous_George

By the time it fails we are likely to have a Tory government.

Is Skipton down south?

Guess what, I think a Tory government would relish watching the society fold - and blame it all on Labour and Gordon Brown. The Tories don't have a strong record of looking after Northerners.

GG

[Deleted User]

Gorgeous_George wrote: »

Who would buy these unprofitable mortgages that had caused Skipton to go bust?
GG

The mortgages could be sold on at a discount so that they would be profitable to the purchaser.

real1314

Given that a number of lenders were able to make provision in tracker mortgages for a low base rate by including a "floor", surely this would make the idea of a low base rate a predictable situation against which provision could be made.
As a predictable situation it could not therefore be exceptional.

Looking from another side, in the ealry '90s rate rose dramatically, pushing many mortgage payers into difficulty. Did Skipton invoke any exceptional circumstances clause then to reduce payments for mortgage holders or does the concenpt of "exceptio" only operate in one direction?

hallmark

Gorgeous_George wrote: »

By the time it fails we are likely to have a Tory government.

Is Skipton down south?

Guess what, I think a Tory government would relish watching the society fold - and blame it all on Labour and Gordon Brown. The Tories don't have a strong record of looking after Northerners.

GG

Anyone notice the nulabor spin machine at work today?
In an attempt to spin that Brown isn't a bully, "Downing Street" immediately issued statements denything things that weren't accused in the first place. "Gordon Brown has never hit anyone" etc. Hmm, very interesting. Except that no-one suggested he had.

NeuLabor spin. They know full well that the majority of people will vaguely take in the "official denial" part & never actually clock the fact that they're officially denying something that's nothing to do with the accusations.

If someone isn't a bully, the only sensible denial is "he isn't a bully", not "he's very passionate" etc etc. The very fact that they use expressions like that is all the proof most people will need of whether he's a bully or not.

Dan_1976

You also have to look at a bigger picture, if Skipton went under 1000's of jobs could go. They own Connells, or did and Sequence and a few other companies. The effect of a society of its size (I think its top 5 if not deffo top 10) could be massive.