Nationwide Mortgage - new fees and charges

shar1f

Yes please me too, fixed for 10 years 6.5 years left, so erc will be huge, this is so unfair.

bypasser

In response to my letter asking for clarification, Nationwide states that they are applying an 'additional interest rate' not an additional charge. Will be crrying on the fight!

bypasser

You can speak for 5 mins if you register to speak before the AGM starts at 11 am. It's at Queen Elizabeth II Conference Centre, Broad Sanctuary, Westminster, London. Face to face encounter may illicit better answers than pen and paper.

sandsy

I suggest that all of those affected email the FSA marking their query for the attention of the Unfair Contracts team:

[EMAIL="consumer.queries@fsa.gov.uk"]consumer.queries@fsa.gov.uk[/EMAIL]

and enclosing a copy of the relevant letter from Nationwide. For more information, see:

http://www.fsa.gov.uk/Pages/consumerinformation/unfair_contracts/unfair_contract_terms/index.shtml

Thrugelmir

sandsy wrote: »

I suggest that all of those affected email the FSA marking their query for the attention of the Unfair Contracts team:

[EMAIL="consumer.queries@fsa.gov.uk"]consumer.queries@fsa.gov.uk[/EMAIL]

and enclosing a copy of the relevant letter from Nationwide. For more information, see:

http://www.fsa.gov.uk/Pages/consumerinformation/unfair_contracts/unfair_contract_terms/index.shtml

There's nothing unfair in the contract.

As the lending is for commercial purposes then certainly won't come under consumer lending at the FSA. In fact the FSA do not regulate commercial mortgage lending.

stamper

I believe Thrugelmir is correct on one point above but incorrect on the other. My understanding is that the product isn't covered by the FSA because although it would normally be a regulated product, it is not in this case because it isn't used for residence by the holder.

However, I strongly disagree with Thrugelmir's opinion that the contract terms are not unfair. Although the FSA may not regulate this product, they have an excellent definition of what is fair in their 'statement of good practice'. This document states:

2.1 The overarching test of fairness is in Regulation 5 and provides that a term
will be unfair if: ‘contrary to the requirement of good faith, it causes a
significant imbalance in the parties’ rights and obligations arising under the

contract, to the detriment of the consumer’.

It goes on to say that a requirement of fairness is that if imposing a charge such as the one proposed, the customer must be free to immediately dissolve the contract without inhibition.

By definition, it's clear that there is a significant imbalance in the parties' rights if Nwide intends to propose such a dramatic increase in effective rates. It's also clear that no ERC get out has been offered. It's difficult to see how the FSA's position could be considered anything but clearly against the proposed changes.

I think this leaves us with the path of Financial Ombudsman. Remember that although the product may not be covered by consumer fairness protection, the contract is still covered by the normal legal protection. I personally believe that the Mortgage Conditions don't allow for such a charge, but this will have to be tested.

Tank7

Have been away for a month and only just got back into this thread!

In reply to the two, direct, comments on my original post:

Seraphina...... I actually dropped the rent to get the tenants in so I have no issue increasing it as I would only be looking at taking it to the original price I required!

Thrugelmir...... it may be just me but you seem to be enjoying the fact that a lot of us will be paying much more for our mortgages! I found your comment offensive. FYI I am not a professional landlord, and never intended to be, but like many due to circumstances I chose to rent my 'only' house out until I decide what to do with it! I am now about 80% certain I will sell it and buy a cheaper house, with no mortgage, so I do not have to worry about NW or any other lender upping its fees and charges!

I am waiting to see what has happened to the few posters who claim to have been told that if they re-apply to rent their property out they will not be subject to the 1.5% charge, anyone got it in writing?? The letter we all received is very clear that anyone who has rented their property out for 3 years or more from the 1st December 2010 will be subject to this increase.

I wrote to NW using the letter posted up by Solent and received a reply from them basically stating they are sorry for any inconvenience caused by the increase and they hoped their letter had satisfied my concerns, which it obviously hasn't!

They also stated that the increase does not amount to a variation in their t&c's it is a separate document and their conditions allow them to change their fees with due notice given.

They say that they cannot disclose details of the specific benefits the increase will provide, obviously because there aren't any!!:mad:

So will keep an eye here to see if anyone is going to get away with the increase because if one of us does we all should!

Solent have you had a respone to your letter??

Thrugelmir

Tank7 wrote: »

Thrugelmir...... it may be just me but you seem to be enjoying the fact that a lot of us will be paying much more for our mortgages! I found your comment offensive. FYI I am not a professional landlord, and never intended to be, but like many due to circumstances I chose to rent my 'only' house out until I decide what to do with it! I am now about 80% certain I will sell it and buy a cheaper house, with no mortgage, so I do not have to worry about NW or any other lender upping its fees and charges!

No, I'm enjoying it in the slightest as a matter of fact. As no doubt it will cause heavily leveraged borrowers to default. Adding to the burden of the average borrower.

Consent to Let in the right circumstances is perfectly valid. 3 years is a reasonable time span. What has happened is that sufficent number of people have exploited this "loophole" to their advantage. Fair enough it wasn't illegal. Now the rules have been fairly tightened up. There's no point in calling foul.

Whether you are are a professional landlord or not. Makes no difference. You didn't sell your house as you saw an opportunity to make a profit. Again I see nothing wrong in that. But its not the purpose of a residential mortgage to provide commercial lending.

I post to keep some perspective on the issue. Not get carried away with what people believe their rights are. When they aren't.

Thrugelmir

stamper wrote: »

I personally believe that the Mortgage Conditions don't allow for such a charge, but this will have to be tested.

The granting of CTL is at the discretion of the lender. Within that granting ( or offer to grant) they are within their rights to amend the terms of the original contract as they think fit within reason. The acceptance of the terms is then a matter for the borrower.

The FSA would hardly rule that a rate of 3.99% is detrimental to the borrower when the Nationwides own BTL subsidary, the Mortgage Works cheapest borrowing rate is higher than this.

The Nationwide would have taken counsel prior to implementing this change.

Tank7

Thrugelmir wrote: »

Whether you are are a professional landlord or not. Makes no difference. You didn't sell your house as you saw an opportunity to make a profit. Again I see nothing wrong in that. But its not the purpose of a residential mortgage to provide commercial lending.

I post to keep some perspective on the issue. Not get carried away with what people believe their rights are. When they aren't.

I am not going to get into a slanging match with you but I am not sure how, due to the falling house prices, etc you seem to think I saw an opportunity to make a profit by keeping it through all the doom and gloom and falling house prices! I would have made more had I sold it when I first rented it out!!

To be perfectly honest, at the end of the day, I was expecting to have a 'commercial rate' applied to my mortgage as soon as I asked to rent it out and I was more than surprised when I was told it would not affect my interest rate. What I find is, out of order, is the way the NW are not just coming out and saying OK now we are applying a BTL mortgage rate to all of you who have rented for 3 years or more but instead they have gone about it in way I find way too sneaky and open to further increases as and when they feel like it.

Keep up the good work and I still look forward to hearing from anyone who may have actually found a way of defeating this 'stealth' increase, but I am not going to hold my breath!!

At least we have until 1st December before the increase hits us!