Nationwide Mortgage - new fees and charges

Thrugelmir

samwardill wrote: »

• 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

Can you provide evidence to support this argument?

samwardill

Thrugelmir wrote: »

Can you provide evidence to support this argument?

No. I think that the onus should be on Nationwide to prove that it has changed in such a way to make implementation of these charges necessary.

As I said, I am not sure these arguments will wash with the Ombudsman. Fundementally I think that Nationwide has acted in bad faith in making these changes and I hope that someone will find an argument that will force them to do a u-turn. I'm not sure if my argument will work but I will try.

I think that the important thing is that as many people as possible take this to the Ombudsman so that the strength of public opinion against these changes will be recognised.

Vincenzo

samwardill wrote: »

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.

Are you within a fixed rate period? If so I would refer to the part of the Mortgage Conditions stating that the interest rate would not rise. Whilst the 1.5% is referred to as a fee by Nationwide, I recall they also called it a 'Letting Interest Rate' in the letter I received. I would argue that this is indeed an increase to your interest rate and not, as Nationwide claim, a fee/charge.

samwardill

Vincenzo wrote: »

Are you within a fixed rate period? If so I would refer to the part of the Mortgage Conditions stating that the interest rate would not rise. Whilst the 1.5% is referred to as a fee by Nationwide, I recall they also called it a 'Letting Interest Rate' in the letter I received. I would argue that this is indeed an increase to your interest rate and not, as Nationwide claim, a fee/charge.

I'm not in the fixed rate period. I just want Nationwide to stick to the SVR of no more than 2% above base rate that they signed up to!

Thrugelmir

samwardill wrote: »

I think that the important thing is that as many people as possible take this to the Ombudsman so that the strength of public opinion against these changes will be recognised.

Unfortunately the Ombudsman isn't there to rule on public opinion.

samwardill

Thrugelmir wrote: »

Unfortunately the Ombudsman isn't there to rule on public opinion.

Whatever the Ombudsman is there to do, I think that it would be naive to believe that they are not influenced by public opinion.

In any case, the Ombudsman is only there to rule on individual cases. Nationwide is only likely to be forced to change policy based on the outcome of a number of cases.

Thrugelmir

samwardill wrote: »

Whatever the Ombudsman is there to do, I think that it would be naive to believe that they are not influenced by public opinion.

Obviously anybody effected by this change would feel aggrieved, totally understandable. The Nationwide is a mutual organisation and each member has a vote. If you could organise a petition and garner support. That would be a truer measurement of public opinion.

samwardill

Thrugelmir wrote: »

Obviously anybody effected by this change would feel aggrieved, totally understandable. The Nationwide is a mutual organisation and each member has a vote. If you could organise a petition and garner support. That would be a truer measurement of public opinion.

My aim is not to measure public opinion but rather to ensure that enough people who are disadvantaged actually do something about it so that there is a quorum of public opinion against this move by Nationwide.

I'm quite sure that, if put to a vote of Nationwide membership there would be enough people who are not accidental landlords to vote against any motion. However I do believe that the idea that this is done for the good of the members is also a little naive. Nationwide managers will be bonused based on the profitability of the building society just like any bank. They are in it for themselves. I doubt other members will see any benefit from this action.

I have, however, lodged some protest by voting against the recommendations of the board in the AGM elections.

samwardill

Vincenzo wrote: »

Are you within a fixed rate period? If so I would refer to the part of the Mortgage Conditions stating that the interest rate would not rise. Whilst the 1.5% is referred to as a fee by Nationwide, I recall they also called it a 'Letting Interest Rate' in the letter I received. I would argue that this is indeed an increase to your interest rate and not, as Nationwide claim, a fee/charge.

I've now got hold of the Ts & Cs. I really don't see how they can justify these changes. Their Ts & Cs say that all fees must be fair and reasonable in relation to the cost of doing the work. If a fee of zero was originally fair and reasonable what has changed to make a fee of thousands of pounds fair and reasonable?

Their Ts & Cs also state a number of reasons why interest rates can be changed including both 'a change...in the cost of funds we use for our mortgage holding' and 'a change in the way that the property is used or occupied'. I'm quite sure that they would never get away with changing a fixed or capped interest rate on the basis of the first condition. Therefore I think that this section can only apply to variable and uncapped rate mortages.

stamper

Critically in my opinion, the T&Cs (at least my copy from 1999) say that fees can be charged for additional cost etc..."in connection with your mortgage or loan”

To me, that says even if they could convince someone that the interest rate rise is actually a fee rather than an interest rate rise, they still wouldn't be able to introduce it unless they can prove that the costs/losses were specifically incurred from your own mortgage. It definitely doesn't say they can charge additional fees due to losses incurred "due to other people who have products similar to yours"