Spml changing terms and conditions

lorrish

i have a mortgage with SPML which i unfortunately took out in 2007 - ahead of everything crashing, so my repayments are on a variable rate of LIBOR + 3.34%. I have now received a letter sying that they are changing the terms and conditions of the original agreement and will now be using a " base rate" instead of LIBOR which will be set at up to 1% more than the libor rate :eek:
can they do this?? as my mortgage is quite managable at the moment but following my separation from my husband, i am dreading an increase of anything....

has anyone else come across this? and is it legal?

thanks for reading
Lorraine

betmunch

I would think they have seen Skipton and Halifx get away with it recently so now they are trying it. Hopefully someone with more legal expertise will be along with a more solid answer for you

markb1_2

Hi,

I just found your post having just posted a similar question regarding the same thing. I have received the letter regarding the change of terms but no notification of change of rate, although I guessed it wouldn't be long before it was changed after getting the first letter.

I hope someone with proper legal knowledge takes a look at this. It seems absurd that they could do this, it undermines the point of having a contract.

Cheers - Mark1b

holmespeter

I am in the same situation. Whilst SPMLs "Base Rate" can be from 1 percent less to 1 per cent more than LIBOR, I think we all expect it to above rather than below. I understood that SPML as such no longer existed and I wonder if this is just going to help pay off some of Lehman Bros other debts (or line some bankers pocket!). I feel inclined to write back and reject the change but would welcome some authoritative advice on this.

Thrugelmir

SPML have to borrow the money to fund your mortgage. If the cost of these funds is rising. Then they have to pass the cost on to the their borrowers.

So in answer to your question yes they can.

The FSA will be notified of the change. To ensure that it is done on fair terms i.e. not an excessive change to the detriment of the borrower.

catieeb06

Is there any reason you can't look to re-mortgage to another lender? I appreciate SPML are a sub prime lender but your credit may have repaired enough or be within the criteria of other sub prime lenders.