MSE News: Thousands of Santander mortgage holders could get payouts after blunder

me03

me03 wrote: »

Hi all

I am new to the forum and would just like to say thank you for this thread.

I also received a letter around a month ago (M001) and wasnt sure what to make of it but decided to hang onto it as I figured they wouldnt send out something like that unless they had been at fault!

I have looked into my mortgage statments/letters etc and typically the 2008/09 statements I cant find to get any information from.

On one of our letters it does state that when we moved house in 04 we were tied into our mortgage til 2010 and the typical charges apply (£3500 to leave etc) although I am not really sure about which type etc (Im the type who just looks for the cheapest and says yes!!)

I do remember a rise around that time and then in Sep 09 we started to get into financial difficulty due to a drop in my wages and Santander put us on an interest only for 2 years. (We are fully up to date now though and im sure the price hike at the time really didnt help our circumstances!)

Do you think that I should ask for a questionnaire to look at or try to find out more information about our mortgage at the time? and also would the fact that in late 09 they allowed us to drop to an interest only affect our chances if santander had done something wrong?

Many thanks for any replies in advance.

me03 wrote: »

Just an update...

I rang Santander last night and spoke to a man who said that I wasnt affected as my mortgage was on a fixed rate until 2010 therefore I wouldnt of been able to leave anyway.

Luckily I had found more paper work which infact states that my mortgage was in 2 parts (so I could test his theory of who is affected), 1 part fixed the other part on variable - when I said this to him he went 'away' to check it out and told me that I was infact right :rotfl:. (Shame he didnt have the common courtesy to tell me about it first!)

He then said I would of been able to look for a lower interest on this part of the mortgage and began rambling lots of stuff which I really didnt understand!

I said I would like to complain about it and he said he would send out a questionnaire within 5 days and aims to have it fully sorted within 8 weeks.

At the end of the phone call I said "so just to clarify, when I receive the questionnaire I will be focusing on the variable part of the mortgage" - to which he replied "I would focus on the fixed!!":mad:

I told him how utterly confusing this all was and that when I received the questionnaire I would be ringing back with more queries.

Seems to me that either I am very stupid and dont understand much or they are deliberatly trying to make it difficult.

I have quoted a couple of my 2013 posts for reference as to my background.

After complaining to Santander I got nowhere just a letter saying on the balance of probabilities they do not think we would of changed mortgage (letter dated 15th july 2013).
They state that we opted for a 5 year fixed rate and the capmargin wouldn't have been promoted as a specific benefit of our mortgage.

They then went on to say at the time our monthly payments were affected by the margin increase (they accepted in a fashion that we were affected) we had missed 3 mortgage payment (see previous posts about financial difficulty at this time) and they said we would not have been able to get another mortgage.

They then said the margin increase affected our mortgage when the initial fixed rate expired (3.1.10) and that we were free to look at other products but we chose to stay for another 28mths therefore on the balance of probabilities again we were happy with that rate.

So, after all that letter I left it thinking that Santander were right (silly me!) but I now see that they are paying others for what they are owed. Is it too late for me to reopen my case with them? I understand that it is over the 6 years from 2008 and over the 3 years (just!) from when I first complained (29 May) but our last letter from Santander was on the 15 july - does this mean that I have until then to go to the FOS or have I missed the boat.

I'm very sorry that this post is so long but I am so annoyed at the bank for this. I cant prove it of course but my firm belief is that if I had the option to renegotiate a new deal back in 2008 then maybe we wouldn't have got into the financial difficulty that we did as we would of been able to afford the lower repayments therefore we wouldn't have an extra 2 years on our mortgage!

Thanks for any advice good or bad

Oh and I have found our terms and conditions for 2006 (printed feb2006) if anyone wants to ask anything

frazell

me03, I've been back to Santander 4 times now clarifying points and pushing further. I suggest that you keep going with them and put together a really long and robust letter detailing all of the information you have.


Do your T&C's state that you could have moved mortgage penalty free? If so, then this is the strongest part of this case in my opinion. The fact that in Nov 2008 you could have just chopped in the mortgage for something else without penalty, as I say above, you would be nuts not to take advantage of that.


The interest rate was clearly trending lower.... down from 5.75% in 2007 with a big drop in rate between oct 2008 to the final 0.5% in early 2009. You should include all this in your response with evidence of the best mortgage rates at the time.


For Santander to say that you weren't affected is utter rubbish, depending on the above;


1) You could have moved mortgage in Nov 2008 (if your T&C's allow)
2) Whos to say that you couldn't get another mortgage just because you missed 3 payments. Difficult - yes, impossible - no.
3) You would have been affected eventually by the cap margin once the mortgage went onto the SVR
4) Just because you stayed on the SVR after 2010 for 28 months could have been for legitimate reasons e.g. you might have been looking for another house, considering selling, the rate might have been reasonable at the time...... the market had moved a LONG way by 2010 and rates and mortgages were completely different from 2008.


Unfortunately, as you made your complaint in 2013 you will now be outside the 6month window for you to refer to the FoS.


You have another option which would be to take this to the small claim court, but you would need to put together a strong and concise case and be able to talk about that to a judge.


I would write to Santander again with a very full and lengthy letter detailing everything and see what they say as a first option. The FoS will be out of the question for you now.

frazell

Going around in circles with the FoS still. They have come back and said that I would have had to pay the ERC in 2008 as I was still within the fixed rate deal.

This is not what the T&C's say and it does not make any differentiation between being in or out of the "offer".

Has anyone got anything tangible on the 3 month window "get out" clause when they were inside their offer period?

DMKCAK

Dear All

Have just picked up this forum and wish to share this with you.

We have been caught up in Santander non advising of the cap margin changes and received initial fob off letters from them and suffered some underhanded tactics in dealing with our situation. I am an IFA and my wife is a Lawyer.

We have complained to FOS who have delayed and misled over this situation and we have an offer on the table that FOS believe is fair and reasonable - we do not agree with them.

Facts: FSA highlight non advising of cap rate margin change and consequences of that by Santander. They require Santander to invite complaint.

Santander letter confusing and when complaints received they appear (as evidenced on this blog) to use every effort to avoid redress.

We have received same and complained to FOS in October 2013 and only received a redress offer in November 2015
WHAT WE KNOW OR HAVE BEEN TOLD by FOS.
FOS have maintained that they had ONE test case that they reached a provisional decision on (this is not binding on any party). When they reached this Santander agreed to settle cases as a gesture of goodwill. SO FOS has not reached a decision that is binding on liability and this has taken 2 years.. This action has significant impact on the lending industry as a whole and that Santander have put lengthy a detailed arguments to FOS as to why they don't think that they are liable.
They have asked Santander to calculate redress and we know this redress to be incorrect. We have sought legal advice and will talk to Barristers soon. However believe that Santanders actions may void their contract and because this is a significant action that compensation should be significantly higher than being offered or calculated.

Solicitors Leigh Day are looking at a class action against West Bromwich on similar grounds (decision in the appeal courts against West Bromwich) and MAY be prepared to look at a class action on behalf of Santander customers involved in this issue. See News June 2016 on the Leigh Day Website. It has contact details.

ISSUES.
Santander calculate simple interest due not compounded, deals offered going forward not being honoured, calculations not correct in law, Voiding their own contract, no uniform approach, delay's and misinformation from Santander and FOS.

People on this forum should now perhaps consider a class action.

frazell

My personal position is that I've been forced down the route of settling.

The FoS effectively "undid" all the work that I did with Santander in getting them to agree that I would have moved to a variable rate product. The FoS said that we had only said that to increase the level of our compensation as our account history showed we had a series of fixed rate mortgages before the event. They therefore insisted that the compensation be based on a fixed rate of 2.29%, minus the ERC of £4k.

This resulted in the overall offer calculated by the FoS to be far less than Santanders initial offer. I've argued that the T&C's state that there was a 3 month window to move mortgage, plus a 30 day notice period, but neither Santander or the FoS will provide substantiation on this.... its apparently only for people who were on the SVR or a discount rate and were immediately effected (no reference in the T&C's).

I've been fighting this for 6months now and I was ready to take this all the way to a small claim just to get a judges view of things.

The fact is that this is not my account, but my partners previous mortgage and she does not want to proceed to court or spend anymore time regurgitating the same arguments, getting an agreement and then having to do it all over again with the FoS.

Its all causing stress and disharmony in our household and its not worth it frankly. We have effectively been railroaded into a position where our compensation would be more than halved (£3k, as opposed to £5.7k)unless we agree......... we still had the opportunity to appeal the adjudicators view with an ombudsman and if that failed we could have gone to court, but she's thrown the towel in. I think we are owed about £13k from my calculations, but note the comments above on compound interest.

I'm very interested in the above post and I hope that the facts come out eventually and perhaps compensation can be adjusted accordingly at some point in the future for all involved.

Good luck DMKCAK and if you need any details from all my efforts then only too pleased to help.

mac24

Yes thanks DMKAK.

Please keep us updated. Our case is about to be reviewed for a second time by the FOS. I can already guess what the outcome will be.

I put in a freedom of information request on past cases they have dealt with. Their response, after careful consideration apparently , was to send me a link to their website decision search engine, which I had already told them contains no information on any cap margin cases. Joke!!

I've already been told that the FOS handled hundreds of these cases but there is no concrete information detailing any of them.

My experience suggests they are as bad as the banks and financial services the claim to independently adjudicate on.
I await my second refusal but I will make it clear that I completely disagree with it and then wait for the truth to out I suppose

frazell

I think another point of issue is that Santander no longer have to inform their customers of the cap margin increase. They say its not linked to anything and therefore we all don't need to know about it.


If you watch David Olias Youtube video where he questions Santander on his 2007 terms and conditions they say that they no longer have to tell customers. He argues that as the cap margin, SVR and the baserate are all inextricably linked then customer SHOULD be informed whats going on..... especially if they have a 3 month penalty free exit clause.


I think that the working practices need to change on this and transparency needs to be there. It places customers that were on the 2007 - Onwards T&C's in a position where they might be due compensation too. They were even more in the dark as their T&C's state that they don't even have to give notice of a change to the cap.

For what its worth, I put a complaint into the FCA last week about Santanders handling of the issues. They responded that they couldn't comment on individual cases and to refer to the FoS. Sheeesh.


Completely agree with Mac24, its almost like the FoS are working on behalf of Santander the way they carry on.


I would pleased to see a Class action and bring Santander to task on this.

DMKCAK

Mac24 & frazell

I am preparing papers today to submit to Barristers Chambers tomorrow.

The basis of the appeal hearing in the West Bromwich case was that borrowers given all the information in their mortgage offer would not reasonably enter into a contract that was detrimental to them. There are huge similarities with this case with Santander.

The adjudicator in our FOS case is KM (name not in full deliberately) and we have already had the Ombudsman KR (name not in full deliberately) review her decision and state that Santanders offer is fair and reasonable and more than he would have offered if he had made a decision on the case.

Sadly that "opinion" contains errors in law and that is the only challenge you have to an adjudicators decision. Even sadder the FOS have avoided making any decision on liability and because of that we feel that they have failed in their remit as independent arbitrators in this matter..

It is likely we will reject the decision of the Ombudsman after opinion and advice from the Solicitors and Barristers who MAY be prepared to run a class action if enough people get involved.

Santander have been clever here insofar as they have ground people down - our own case has included involvement from Santanders Chief Executives office, threats of and possession action, misinformation and undervaluation of our property and having received redacted e-mails between the FOS and Santander there appears to be "an overly" sympathetic relationship between the FOS and Santander on these matters.

I believe we have been victims of a cynical campaign by Santander. Our mortgage DD was cancelled (NOT BY ME) and when I spoke to Santander they agreed to put it on hold until our complaint with them about the Cap Margin was resolved. I was communication with the Santander Chief Executives office and the representative with held the information that despite agreeing to the mandate being on hold that Santander had started possession proceedings against us.

Part of their offer is to remove legal costs and apply to the courts to have their actions overturned.

That is the nature of the beast we are dealing with and this is why we are taking the route we are. It may involve rejecting the FOS decision but as it is our opinion that they have been Complicit in this matter we feel we have no choice. Santander agreed to settle on compound interest if we rejected the simple interest argument. We rejected it and the FOS with held this from us. We only found out when this is discovered in the e-mail exchange between FOS and Santander. I guess FOS forgot to redact that bit of info.

By it's nature a class action needs people to sign up to be part of it. I will post the outcome of our legal opinion.

frazell

DMKCAK - Blimey, I thought I'd had it bad... their action towards you has been utterly outrageous.


I'll speak to my partner about this but I think she would agree to sign up to a class action on the basis that a team of lawyers would deal with it, rather than me. That's a vote of confidence eh?!

frazell

Its probably a bit late for the majority on this but just to assist anyone who is considering writing a complaint to Santander I had this cracking response lined up with all the facts and details set out before I had to take a settlement. I thought I'd share some information which might assist. I should point out that I am not an expert and this is not a definitive guide.... everyone's case will be different.

My opinion is that you should return the questionnaire to Santander and in response to D5 & D6 you should just enclose a letter with your supporting evidence.

Your defence needs to be set out with as much information as possible in an attempt to quash any comeback at all. My letter set out the following headings and details.

History of Issue

• 15 December 2008 Santander increased its SVR cap margin from 2.5% to 3.75%.
• Confirm if you received notification at the time of the proposed changes to the cap margin
• State that Santander breached their own terms and conditions requiring them to give notice to their customers.
• State that this has caused undue influence over you as you were not given the opportunity to take evasive action at the time.
• Refer to the 2013 Financial Conduct Authority ruling that Santander failed to give clear information to borrowers about the change to their Mortgage SVR in November 2008 and ordered Santander to contact some 270,000 customers that were affected (refer to evidence).
• Confirm if Santander wrote to you at that point as they were instructed.

What were the Terms and Conditions that were in force at the time?

• Refer to The Standard Mortgage Conditions (SMC’s) which were applicable to you at the time of the breach of contract (show evidence, get a copy that is specific to you).
• With reference to section 10.7 of the SMC’s (2004 – yours might be different!) which relates specifically to any increase in cap margin, it states;
  
  10.7 We (Santander) may increase or reduce the margin at any time. The following terms will apply to an increase or reduction that we make under this paragraph:
  
  (a) we (Santander) will give you not less than 30 days’ notice of an increase in the margin and not less than seven days’ notice of a reduction;
  
  (b) if we are increasing the margin, then:
  
  - if the increase applies to the whole of the capital, you will be entitled to repay all the money you owe us within three months from the date on which the increase takes effect, without paying any early repayment charge that would otherwise apply.
  
  - if the increase applies only to part of the capital (‘the affected part’), you will be entitled to repay the money you owe us, or (if you choose) the affected part, within three months from the date on which the increase takes effect, without paying any early redemption charge that would otherwise apply to the affected part.

• Refer to the SMC’s and that Santander were required to give 30 days’ notice of the increase in cap margin. As the cap margin was increased on the 15th December 2008, their contractual requirement was to give notice no later than the 15th November 2008 of their intention to increase the cap margin. Santander failed to do this and therefore breached their own terms.
• Refer to the SMC’s and that you would have been permitted to repay all of the money owed to Santander for a 3 month period, from the date that the increase takes effect, without paying any early redemption charge (ERC) that would otherwise apply. As the increase occurred on the 15th December 2008, there would have been a 3 month window up to the 15th March 2009 which to review your options and remortgage elsewhere, penalty free. This window would have actually increased to 4 months if we include the 30 days’ notice period, as having been aware of the impending change to the cap margin you could have started the process of reviewing options on 15th November 2008, until 15th March 2009. You would have been unable to do that as Santander failed to give any notice at all of this change to the cap margin.
• State that if Santander believe that the above SMC’s do not apply to you, to show clear evidence either in the original mortgage offer or the SMC’s.

What was the account history?

• Give details of the property pertaining to the mortgage including purchase price, amount borrowed and LTV (show evidence).
• Give a history of the mortgage/s selected on the run up to the event, rate etc.
• Include any circumstances that might have been relevant.

Why did you originally select the mortgage that you were on?

• State how you select mortgages and if you canvass the whole market and all products.
• Show that you understand mortgages, rates and products.
• Show a graph of the interest rate and show why you think you selected the correct product before the event and why. Try and show why you think you made a good selection.
• In my case they looked at why I had taken a series of fixed rate mortgages and then said that I wouldn’t have opted for a variable rate at the point of the cap margin. I tried to show that I was right to have taken fixed rates because of the circumstances I was in at the time and the continual rise in rates up to the 2008 crash.

What would you have done if you had known about the Cap Margin Increase?

• Refer to the SMC’s and show that you would have ordinarily been notified of the increase in Cap Margin no later than the 15th November 2008.
• Refer to the SMC’s and state that following the Cap Margin increase on the 15th December 2008 you would have had 3 months to review their mortgage options and remortgage with another provider without paying an ERC. This would have given you a total of 4 months to review your options.
• State what you would have done. E.g moved mortgage to another provider.

What mortgage product would you have selected?

• Refer to the financial crisis at the end of 2008 and the financial distress caused to many households.
• State if you would have moved to a fixed or variable rate product elsewhere.
• Explain why the variable rate or fixed rate was better for you and vice versa.
• Show the interest rate on a graph and show the 4 month window and justify why you would have selected your alternate mortgage product.
• Try and give evidence of the market trends, give evidence of news articles that support your thoughts on the rate trends and if it was prudent to opt for a Variable rate or fixed product.
• Demonstrate the market wide conditions at the time and show what the preferred product was, not only from a value basis but from a market trend and interest rate basis.

What mortgage products were available in the window of opportunity?

• I believe Santander are using a Woolwich fix of 2.29% as a calculation means. I got them to agree a variable rate of 0.5% above base but there were other rates of 0.69 and 0.99 available. Show evidence that they existing (difficult).
• Include things like the product fees to support why one was superior than the other.
• Show that you would have qualified for the remortgage, did your LTV allow it?

Summary Conclusion

• Give a summary of your conclusions and state clearly in a final summary what you would have done.

What redress is due


Give a summary calculation of what you think you are due, including;

• Approx Outstanding Mortgage Balance
• Monthly Payment at your original rate
• Monthly Payment at your proposed rate
• Number of months of compensation
• Compensation
• Calculate simple interest on compensation (or possibly compound interest!) @ 8%
• Show Interest Less HMRC tax at 20%
• Total Redress Due (Interest less 20% + Compensation

Add anything else you like compensation wise.
Evidence, evidence, evidence..... news articles, internet discussions, anything that supports the above point by point.