Can my mortgage provider do this?

Dave_Ham

betmunch wrote: »

I'm positive its a valid complaint.

I'm not so positive that the OP will get much more than a letter saying tough!

Sorry think we are talking the same, I was talking about not getting anwhere rather than disagreeing it was valid.

Over to you OP, suggest you put it all writing...

betmunch

Yeah I reckon so!!! Great minds think alike!

OP please keep us updated on this one

The_J

I'm pretty sure consent to let is granted on an as-is basis and they can change the rules whenever they want.

Simon_gloster

If Halifax are aware of an unauthorised tenancy, they can load 1.5% interest...however if its a dirct sale, the advisor must have thought what they are doing with the existing debt. How tat mortgage is keyed is critical.

If left as a mortgage committment along with the new mortgage then I presume as no rental is entered to offset the ctl their incomes cover both.

Halifax would send a comleted app form to the op.

I think there is minor room to complain...but in reality as someone says they will not back down down on ctl. £200 compo or an inflated rate, the op will lose out.

FOS on rental issues are generally, even regulated rental, not interested.

Holly, wonderful explanation, have to do all my posts on my phone.

CTL = breach of mortgage terms period.

holly_hobby

Once a residential mge is on a CTL basis all bets are off - as the mortgagor is technically in breach of their original resi mge T&Cs - ALBEIT with the lenders tacit agreement. The max CTL term is circa 3 yrs (but can be just 12 mths), at which time (and if still let) you are loaded, moved to a BTL with the lender, or asked to source an alternate provider - so the 1.5% loading in this case, was only a matter of time in any event.

The bank will argue that the adviser was not giving advice on the CTL process/arrangement, but that he provided regulated advice on a new residential mortgage (albeit facilitated by the individuals prior request & agreement of a CTL arrangement, effectively removing the flat's mge liability from his affordability assessment). Which is why there may be no mention of the CTL within the POS docs, only discussion re the resi sale.

Futher to which, I don't believe on balance that any notification at the POS of the resi, that there would be a future loading on the flat's pay rate re CTL, would have disuaded him both from purchasing his new house or effecting the new residential borrowing with the lender (if thats the claim), and I certainly think this is the angle the bank will take.

Re the CTL rate issue - there are reams of disgruntled HBOS cusomters ( well really now LLoyds Banking Group) and CTL threads - whereby the lender has advised of a 1.5% mge loading rate (i.e more akin to semi-comm/BTL rates, which is of course what a CTL/BTL mge is). The mortgagors in all the posts having prev enjoyed being left by Halifax, on standard residential BMR for several yrs in some cases - lucky old them, but very lax on the part of HBOS).

As a CTL arrangement effecitvely has transgressed into semi-commercial finance, its officially now unregulated lending, so does not fall under FSA Mge regs. With the infrence of LLoyds Group, being if you don't like the loading, move to a BTL mge/lender - which to be honest can't be argued with really (the sudden rush of loadings on CTL is in reality driven by Lloyds risk management, whom want to clean up the amount of high risk exposure on books inherited from HBOS).

The fact we also have a shared ownership being commercially let, may I think prohibit the tsf of the mge to a BTL arrangement/lender - but happy to be corrected if thats not the case.

So, my view is there is no merit in pursuing a complaint through to FOS - if he gets no where with the lender directly, as to complain that a CTL arrangement has resulted in the payrate being moved from std residential rates to a BTL/semi-comm loading, is really a very mute point in the circs, and I think shall be easily dismissed. However, the lender may back down if the complaint letter is robust enough saying he had no idea a loading would arrive so quickly, etc ... I admit it is a weak argument , and I really wouldn't hold my breath for an uphold .... if indeed rejected I certainly don't think referring to FOS would result in an overturn.

Hope this helps (sorry if a negative for the OP) but thats how I see the situ.

Holly

StanVanDamn

Just to give you all a quick update. I have replied to Halifax letter with my complaint regarding the above matter. I have advised them I am renting the flat out.

They responded by sending the same letter they sent me before 6 times - 3 times to the flat being rented out - 3 times to my new house (even though they now know the flat is being rented out).

I have rung them and asked them to answer my letter rather than send the original letter out again - I am currently waiting a response

kingstreet

I didn't see this at the time, sadly.

Did you formally request consent to let? Did you receive written confirmation it was granted?

What mortgage "product" or rate were you on when you started to let the property? What product/rate are you on now?

Is it possible your initial rate, perhaps a fix or a discount ended after the tenancy started?

This is important.

Halifax will give consent to let without requiring a rate change if the borrower's mortgage is subject to a current product, like a fix. However, when the product ends and the mortgage reverts to standard variable rate, Halifax then;-

requires the borrower to change products (typically a 3yr fix 6% £999 fee) in return for continued consent to let, which is usually renewable
or
charges a 1.5% premium over the standard variable rate if the above offer is refused, without granting continued consent to let, making the letting unauthorised.

In the "Information About Your Mortgage" leaflet sent out with every mortgage offer, page 15 (Occupation of the property by people other than the borrower) states;-

Unless you get our written permission beforehand, you must not create any tenancy (or part with or share the occupation or possession) of the mortgaged property. Any such tenancy or occupation could mean the property is worth a lot less.

If you would like details of our letting policy, please contact us. We will then set out the conditions that apply to our letting policy including any fees that are applicable.

Although not confirming the detail of the policy, it does introduce the concept of the need for permission and the involvement of cost.

On the complaint issue mentioned earlier, I would suggest no advice has been given about the existing mortgage. As hh says, any advice appears to be centred on the new mortgage for the new purchase, so a complaint based on advice and recommendation given recently appears a "red herring." How the original mortgage was sold may give pointers to the possibility of a successful complaint specific to that particular mortgage.

On a final note, I trust the OP obtained consent to sublet from the freeholder, should it be required in the lease to the flat.

StanVanDamn

I just wanted to update this post and thank everyone for their help.

Halifax rejected the complaint and in the end I took the complaint to the ombudsman.

The ombudsman rejected my complaint and I have ended up having the extra percentage added to my mortgage rate. Nevermind it was worth a shot but all these months have got me no where.

Dave_Ham

Appreciate the update, shame.

All the best

holly_hobby

StanVanDamn wrote: »

Halifax rejected the complaint and in the end I took the complaint to the ombudsman.

The ombudsman rejected my complaint and I have ended up having the extra percentage added to my mortgage rate. Nevermind it was worth a shot but all these months have got me no where.

Yep as I thought would happen, and whilst dreadfully disappointing, the rejection by both parties is not altogether unsurprising.

Anyhoo, at least its satisfying to you that you didn't leave the stone unturned and all avenues were explored before you accepted the changes ......

Hope this helps

Holly