MSE News: Buy-to-let borrowers hit by West Brom mortgage hike

Leon_W

You can't hide behind small print lenders !

http://www.ftadviser.com/2016/06/08/mortgages/mortgage-products/west-bromwich-must-compensate-buy-to-let-investors-mjv4SUBpDcdc2iiMcwpuII/article.html


An excellent result.

brit1234

Lets hope West Brom can call in those mortgages to save this institution and protect savers.

Its pure and simple. The lender had conditions that if the mortgage lending turned into a loss they could raise interest rates to save the lender. If the landlords could not be bothered to read the term and conditions on tens or hundreds of thousands of pounds deal then it is not the banks fault.

This judgement could make the lender insolvent so West Brom should call in the loans of those loss making mortgages. The landlords should have repayment vehicles to pay off the interest only mortgages, if not they are committing fraud. We have to save the savers money.

fewcloudy

brit1234 wrote: »

Lets hope West Brom can call in those mortgages to save this institution and protect savers.

Its pure and simple. The lender had conditions that if the mortgage lending turned into a loss they could raise interest rates to save the lender. If the landlords could not be bothered to read the term and conditions on tens or hundreds of thousands of pounds deal then it is not the banks fault.

This judgement could make the lender insolvent so West Brom should call in the loans of those loss making mortgages. The landlords should have repayment vehicles to pay off the interest only mortgages, if not they are committing fraud. We have to save the savers money.

Doesn't sound to me like this judgement will mean West Brom need 'saving'...


"
The decision affects landlords who took out their mortgage up to 2008 and will result in a one-off cost to West Bromwich Building Society of about £27.5m as it has been ordered to reimburse affected buy-to-let investors.
The one-off cost will result in the society recording a loss for the year to March 2017, although underlying profitability is expected to be maintained and according to the lender’s bosses the capital position of the society remains strong."


Also, to the poster above yours, if West Brom accept the judgement, can't see where the penalties will be coming from?

"Jonathan Westhoff, chief executive of West Bromwich Building Society, said he accepted the court’s decision but said his board had acted in accordance with its overarching duties to treat customers fairly and to act in the best interests of members as a whole, savers as well as borrowers."


Incredible work by Property 118 Action Group... kudos to them.

fc

brit1234

West Brom can't continue to fund loss making loans, so the most obvious solution is to call in the landlords loans and make them go else where.

garnelle

Court ruled loans could not be called in - subject to standard T&C. Therefore West Brom will have to find approx £10millon pounds of additional income/savings for the duration of these mortgages - many years. Plus, of course, £27 million repayments.

Perhaps they could cut the Directors pay and cancel the shiny HQ development that now looks to be built on foundations of clay.

Thrugelmir

brit1234 wrote: »

West Brom can't continue to fund loss making loans, so the most obvious solution is to call in the landlords loans and make them go else where.

WB have long pulled out of the BTL market. Over time the legacy exposure diminishes.

garnelle

WB share price down 27% and those mortgages are going nowhere fast at their super low rates.

Thrugelmir

garnelle wrote: »

WB share price down 27% and those mortgages are going nowhere fast at their super low rates.

WB is not a quoted company. It is a mutual society owned by it's members. Change you refer to is for the PIBS. Which in effect is part of the Society's capital.

You need to hope that this doesn't tip the business into freefall.

AGBAGB

A well deserved win. This result will end up protecting anyone with a tracker or from having a mortgage called in with no default.

brit1234, your solution is ruled as illegal and as the ruling points out would end up with the forced eviction of thousands of tenants. So you would have families out on the street for the chance that the WB directors would give you an extra 0.1% on your savings rate. You do seem rather heartless.

garnelle

Freefall or not it wont change the 0.99% above BoE base rate for the lifetime of my mortgages - as my contract with the WB states. That is what a Lifetime Tracker does and now the WB have to honour it.