Today my Building Society pulled out of my remortgage??

kiwi_saver

I think my existing mortgage provider are taking the Mickey.

Last week I applied for a fixed-rate 2 Year remortgage at 5.34% with a £249 (no refundable) reservation fee. A week before I had rung the building society and been advised I was eligible to apply for this particular product, but suggested I wait a couple of weeks for some offers they were putting together for existing customers. I was told however that products were running out and if I did apply, only once I had paid the reservation fee would I have secured a specific product.

After a few days of contemplating I decided to apply for the 2Y fixed product (as it was still available and advertised online). The conditions were 1) Apply online, 2) available to homemovers and remortgages, 3) various LTV %.

I applied online, got a KFI and subsequently filled out the complete application form online. In one part it asked who my existing provider was and I selected said company and gave my mortgage account number as requested.

Yesterday I was rung and I provided my CC details for the reservation fee which was duly taken from my credit card.

Just a couple of hours ago (oddly after the BoE rate rise announcement) I received an email from the bank saying oh, they hadn't realized I was a customer and "..the product you have selected is not a product we would have looked to offer you... .. I have refunded the £249 fee to your account..." in essence they refused my application.

Frankly I'm appalled, If I had been told upfront at any stage of the process I was ineligible I would have gone elsewhere, I feel as they have already accepted my application and the reservation fee I have secured the product and the rest is more formality. Personally I feel that since the BoE hike they are trying to pull out of deals in favor of ones more beneficial to them.

If I had decided to pull the application, then I wouldn't have got my reservation fee back, hence in my logic they owe me an element of compensation for breaking the contract in a manner that will now cost me a fair bit more than £250!!

Is this normal behavior, where do I stand and how can I complain further? If I can't sort this out directly I'm feeling I should file in county court (small claims track) as their breach will cost me ££ in real terms.

Any thoughts?

Kiwi

Leon_W

I hate to say this but if you were staying with your current lender then you were neither a homemover OR remortgager.

When you stay with your current lender you are not remortgaging but merely swapping from one deal to another. I'm sure it's a case of wires crossed and lost in the translation etc. It sounds to me like you were trying to apply for a deal that was aimed at customers moving from another lender.

kiwi_saver

Hi Leon,

That may be the case, but the week before last when I spoke to them and discussed my situation, they had my details up in front of them knew I was a customer and advised that I _was_ eligible for this specific product and that's where the discussion was had than mentioned that it would only be guaranteed after the reservation fee had been paid. (Which as of yesterday it had been.)

I don't think I could use the excuse "wires-crossed" if I was a customer trying to get a non-refundable reservation fee back from them?

Actually reviewing the KFI it doesn't say anything about eligibility either way.

Kiwi

MarkyMarkD

You don't apply for a product switch by pretending to be a new customer and filling in an application form as if you are a new customer.

You apply for a product switch by asking the lender directly for a product switch, and then do whatever they tell you to do on the phone or in writing.

As YB says, you weren't eligible for the product you actually applied for. Whether you were told on the phone that it might have been available, products are only guaranteed to be available on the day they are offered to you - they can be withdrawn at any time - and you applied using the wrong method so your application was invalid.

Fixed rate mortgage pricing is not linked to the BoE base rate and swap rates (used to price fixed rate mortgages) actually fell today - probably because the increase was only 0.25% and not 0.5% as some feared. So your suspicions about why you've been rejected are not correct.

regularsaver1

If you werent eligible I'm surprised they were able to produce you a KFI on their systems

MarkyMarkD

I'm not surprised by that at all.

If you pretend not to be an existing borrower, I'm sure that most lenders' systems will produce you a KFI.

regularsaver1

Ours don't, as it would pick up the mortgage details

MarkyMarkD

Sounds good.

kiwi_saver

Leon_W wrote: »

I hate to say this but if you were staying with your current lender then you were neither a homemover OR remortgager.

When you stay with your current lender you are not remortgaging but merely swapping from one deal to another. I'm sure it's a case of wires crossed and lost in the translation etc. It sounds to me like you were trying to apply for a deal that was aimed at customers moving from another lender.

Hi

I don't agree with you here, I was thinking about this and as I'm no mortgage specialist how am I meant to know what qualifies as a remortgage or not?

I've been doing some research and it seems the term remortgage is used ambiguously. Its defined as the process of changing your mortgage for a different one. Their is no clear agreement as to if the provider needs to change or not?

The FSA's definition is;

Remortgaging
The process of changing your mortgage for a different one, without moving home.
http://www.moneymadeclear.fsa.gov.uk/products_explained/mortgages_jargon_buster.html

The oxford English dictionary say;
"take out another or a different mortgage on."
http://www.askoxford.com/results/?view=dev_dict&field-12668446=Remortgage&branch=13842570&textsearchtype=exact&sortorder=score%2Cname

Some sites specifically say it can be with the same provider;

Definition of Remortgage
"Remortgaging is the replacement of an existing mortgage with a new one. You may do this to save money. This might be possible by switching to another mortgage product with the same lender or by switching your business to a competitor."
http://www.home.co.uk/guides/remortgaging/

And there are various others;

http://www.google.co.uk/search?hl=en&defl=en&q=define:Remortgage&sa=X&oi=glossary_definition&ct=title

On balance it seems definitions state or imply that you can remortgage with the same lender.

In my case I was told I could have this product and it didn't say anywhere "Not available to existing customers" which I reckon it should have said in order to be clear to customers.

Kiwi

kiwi_saver

Hi,

MarkyMarkD wrote: »

You don't apply for a product switch by pretending to be a new customer and filling in an application form as if you are a new customer.

You apply for a product switch by asking the lender directly for a product switch, and then do whatever they tell you to do on the phone or in writing.

There was no "pretending" anything here, I applied in good faith following the instructions and reading everything. It simply didn't sate "not available to existing customers".

At at least one point in the application it asked for my existing vendor and gave me the option of choosing my current provider from a list of providers. I selected correctly and quoted my mortgage account number in a box that appeared.

MarkyMarkD wrote: »

Fixed rate mortgage pricing is not linked to the BoE base rate and swap rates (used to price fixed rate mortgages) actually fell today - probably because the increase was only 0.25% and not 0.5% as some feared. So your suspicions about why you've been rejected are not correct.

I agree that fixed rates aren't directly linked to the BOE rate, but the BOE rate clearly influences fixed rate availability. I doubt you can find any fixed rates today (with reasonable or no fees) that are below the BOE rate.

Kiwi

dunstonh

I don't agree with you here, I was thinking about this and as I'm no mortgage specialist how am I meant to know what qualifies as a remortgage or not?

He is correct. Despite the possible differences in meanings you have found, you were not remortgaging as you were only changing terms of the borrowing and you were not a homemover. Typically remortgaging would mean using a different lender.

Frankly I'm appalled, If I had been told upfront at any stage of the process I was ineligible I would have gone elsewhere

You applied for the deal over the internet on direct offer/execution only basis. This means that you take on responsibility for the products that you have chosen. Had you gone down the advice route then you may have grounds for a complaint but by going direct offer/execution only you dont have that option.

You cut out the adviser and chose not to seek advice and take on that responsibility yourself. It is one of the risks of DIY.

hence in my logic they owe me an element of compensation for breaking the contract in a manner that will now cost me a fair bit more than £250!!

The contract is void as you were never eligible for it.

where do I stand and how can I complain further?

You can complain about the adviser. However, as you took on that role, it wont get you very far.

If I can't sort this out directly I'm feeling I should file in county court (small claims track) as their breach will cost me ££ in real terms.

Be logical. A judge probably wouldnt even let it get to court. You have no adviser so you cannot complain about advice. You went online and chose the product yourself and you are ineligible for the product chosen. They havent done anything wrong and you have no-one who you can blame. You will just waste more money.