Nationwide Mortgage - new fees and charges

ET1976

stamper: why don't you ask the same of poster Vincenzo, who posts many threads stating categorically things such as "Nationwide cannot define 'reasonable' as they wish. By including the term in the contract Nationwide must have a stated reason for withholding consent which cannot be arbitrary, foolish, unfair, illegal, or unethical.", but also says 'I am no legal expert'.

But perhaps you don't want to since that poster is on your side?

stamper

ET1976 wrote: »

stamper: why don't you ask the same of poster Vincenzo, who posts many threads stating categorically things such as "Nationwide cannot define 'reasonable' as they wish. By including the term in the contract Nationwide must have a stated reason for withholding consent which cannot be arbitrary, foolish, unfair, illegal, or unethical.", but also says 'I am no legal expert'.

But perhaps you don't want to since that poster is on your side?

I would ask the same of any poster. For example, by clearly stating that he is not a legal expert, Vincenzo is inherently making clear that his advice is opinion only. However, in the specific case above, I do believe that Vincenzo is right. The issue of reasonability is always open to question, but it's undeniable that it's not just up to the company to define it. I don't think any of us would suggest that Nationwide should be able to supply a reason that is foolish, unfair, illegal, or unethical.

Thrugelmir

stamper wrote: »

I would ask the same of any poster. For example, by clearly stating that he is not a legal expert, Vincenzo is inherently making clear that his advice is opinion only. However, in the specific case above, I do believe that Vincenzo is right. The issue of reasonability is always open to question, but it's undeniable that it's not just up to the company to define it. I don't think any of us would suggest that Nationwide should be able to supply a reason that is foolish, unfair, illegal, or unethical.

I merely express an informed opinion to debate the issue in a proper manner. Much of what has been posted moves fails to recognise central key facts that would form the basis of a successful court ruling.

Put you business head on and look at this issue from this angle, rather than as a consumer. As by letting property on a commercial basis this is the position you are actually in.

Vincenzo

Thrugelmir wrote: »

I merely express an informed opinion to debate the issue in a proper manner. Much of what has been posted moves fails to recognise central key facts that would form the basis of a successful court ruling.

Put you business head on and look at this issue from this angle, rather than as a consumer. As by letting property on a commercial basis this is the position you are actually in.

'Informed'? As I recall you have not even read the Mortgage Conditions!

For example they explicity state that the interest rate will not be increased in a fixed rate period. Nationwide call it a 'fee' but as it has the same effect as increasing the interest rate, a court could quite conceivably rule that that is what it is. Call a spade a spade and all that.....

jacewuk

I have just spoken to NW.

They have said that a CTL form wouldn't be enough as the property has been rented out continuously for more than three years. (According to their notes)

However, if I notified them that the property was empty, this requires a letter with my signature on it, and before september 1st you applied for CTL, it would be granted and the additional fee would NOT be applied for a further three years.

Not sure this helps those who have tennents, but then again are NW going to go round to your house and check?

Thrugelmir

Vincenzo wrote: »

'Informed'? As I recall you have not even read the Mortgage Conditions!

For example they explicity state that the interest rate will not be increased in a fixed rate period. Nationwide call it a 'fee' but as it has the same effect as increasing the interest rate, a court could quite conceivably rule that that is what it is. Call a spade a spade and all that.....

CTL is a contractual amendment to terms, at which point NW can change the rules providing they are reasonable. You of course have the option of not accepting the offered conditions. That's a personal choice depending on circumstances.

The NW have avoided the issues that the Skipton BS face with thier change to all borrowers. Though its CTL borrowers that are up in arms.

Vincenzo

Thrugelmir wrote: »

CTL is a contractual amendment to terms

I do not believe this to be the case here though. The original terms include CTL. The terms are not being changed, only the fees/charges applied to the consent.

TBH I don't think we are that far apart on the whole issue. I quite agree with you that Nationwide should reserve the right to charge fees for CTL and the borrower should take it or leave it. The problem is I do not believe they did this properly or fairly.

Remember these Mortgage Conditions are for residential mortgages. If they can add in this fee for CTL, they could conceivably add a % fee to any mortgage and call it a fee for something or other. Has anyone confirmed whether the FSA no longer regulates a residential mortgage product once CTL is granted?

The fair way for Nationwide to bring in this change is to change their Mortgage Conditions for new customers stating that their interest rate will rise by 1.5% on the granting of CTL. Perhaps they should also change them so that consent will be entirely at the discretion of the lender. This might prevent people taking them out in the belief that they will definitely be able to let should they wish to in future.

Thrugelmir

Vincenzo wrote: »

TBH I don't think we are that far apart on the whole issue. I quite agree with you that Nationwide should reserve the right to charge fees for CTL and the borrower should take it or leave it. The problem is I do not believe they did this properly or fairly.

Have you lodged a formal complaint yet?

Vincenzo

Thrugelmir wrote: »

Have you lodged a formal complaint yet?

No, I am in the fortunate position of having c.2.5 years until the change will affect me by which time I will be well clear of my fixed rate period.

samwardill

I intend to challenge this with the Ombudsman. My main arguments are:

• This significant change in the fee structure is akin to the post-contract implementation of early redemption fees. It is well accepted that such (post contract) changes in fee structure are unfair and, as such, unenforecable
• The cost structure for providing the service of allowing letting has not changed. Nationwide is just introducing these charges because they misjudged the risk when they entered into mortgage contracts and let a number of contracts with unprofitable terms

I'm not sure whether my arguments will wash with the Ombudsman. However I will keep this forum posted with progress. I would be grateful if other posters would also share the arguments that they have used and catelogue their success.