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

leveller2911

Richard_Watters wrote: »

My vested interest is that I'm an affected borrower with a handful of West
Brom mortgages.

I do understand the frustration of First Time Buyers who are priced out of the
market,

But whatever your opinions and lack of sympathy for Landlords any fair minded
person surely accepts that what West Brom are trying to do is at the very least
immoral.

I'm sure you do understand the frustration of First Time Buyers who are priced out of the market but do you act morally or ethically having a number of mortages on the go when many can't afford to buy one property?. Your post is a bit of a contradiction TBH.Your expecting the lenders to act morally/ethically (which they never have) and yet you seem to think your exempt.

Richard_Watters

Thrugelmir wrote: »

We live in unprecedented financial times. There's a far bigger game in play which is far from resolved. Another GFC is not out of the question. As far as the WBBS board are concerned they have fiducaries responsibilities that cannot be dismissed out of hand.

That might be easier to justify if they weren't about to spend millions on a plush new Head office!

Richard_Watters

leveller2911 wrote: »

I'm sure you do understand the frustration of First Time Buyers who are priced out of the market but do you act morally or ethically having a number of mortages on the go when many can't afford to buy one property?. Your post is a bit of a contradiction TBH.Your expecting the lenders to act morally/ethically (which they never have) and yet you seem to think your exempt.

I don't see how it is immoral to choose to invest my money in property rather than any other asset class. If you do, then we'll have to agree to disagree on that one.

howardtheduck

caroldaisy wrote: »

Hi
i would just like to see if ant other landlords have a lifetime tracker mortgage with west bromich.
I took out three life time tracker morgages for term of mortgage(25 years).i understood it would be 0.59% above bank of england base .
I have original paperwork and contract.
It was in this wednesdays daily mail that the building society has found a clause in the small print that they can change this. I have received a letter from them telling me they will increase rate by 2%.
I am disgusted as i thought a contract was a contract and if the bank of base had gone up i would have expected to pay. how would they like it if it had risen and i had said in order to protect my business and the tennants then i would pay them2% less!
i have three properties with them mortgage value £309000
the 2% increase will mean i will be £6180 per annum worse off on my profit (now wages !)
I left the nhs on voluntary redundancy in order to pursue my rental business full time.
This is very worrying as when you sign contracts you judge your business income accordingly and i was anticipating slow rises from the bank of England is 0.25 and then 0.5 etc
I also have lifetime trackers with other building societies and if they follow on also . It will be devastating for me.
My profits have been good for a few years because of the drop in rates and that is why a took a chance on leaving work.
i was always aware of the risks but never thought a building society could welch on a contract . i intend to speak to a solicitor and have already posted a comment on the daily mail website to this news.
I would like to discuss this further with any other members facing the same! i have written to several organizations

Hi Carol

Your best chance of fighting this is to go to the Property118 website (just google Property118) and join the class action against the West Bromwich which is being organised by [Text removed by MSE Forum Team], founder of the webside and Justin Selig of The Law Department, a firm of solicitors based in London. They have already instructed a barrister who has provided a written opinion of the merits of the case and they have already managed to accumulate over £60,000 towards the class action fighting fund. The cost to become a member of the class action is £240 per mortgage affected that you hold with the West Bromwich Building Society. I have already paid over £1440 myself as I hold 6 mortgages with the West Bromwich BS that have been affected by the rate hike.

A class action is your absolute best chance of getting the rate hike reversed. [Text removed by MSE Forum Team] is looking at imposing a deadline soon for membership where latecomers will have to pay £500 per mortgage as opposed to £240 so the incentive is there to get in quick.

Please visit the Property118 website and have a read of the West Bromwich tracker rate increase forum. There are lots of members and posters and they are well on their way to launching a legal action but need people to contribute to the fighting fund. The target for the fund is £500,000 as this could potentially go to the supreme court if it is appealed even if the case is successfully won by the claimants at first instance. That is why the class action needs people to join up and contribute and to publicise it as much as possible.

Hope to see you joining the class action on Property118

HowardTheDuck a.k.a. "The Man From Nowhere" on Property118

howardtheduck

(The article below has been cut and pasted from the Property118 website)

Important Message To Mortgage Advisers re West Brom Mortgage Company

Are your clients affected by the West Brom Tracker Rate Hike?

If your clients buy to let mortgage account number begins with the number 8 they are highly likely to be one of the unlucky 41% of the mortgage customers of the West Bromwich Building Society with a West Bromwich Mortgage Company account affected by the 1.9% increase in their tracker margin rate. However, if they arranged their mortgage directly with West Bromwich Building Society (i.e. not via a broker) or before 2006 the chances are their account number will begin with the number 9 and they are not affected – YET!!! West Brom will give no assurances that mortgages with account numbers beginning with the number 9 will not be affected at some point in the future.

We have a very strong case against the West Brom and will be commencing litigation at the end of January 2014. Our barristers opinion has lead to a favourable quote for ATE insurance which would pay for the other sides legal costs if we lose. The case is now fully funded. Participants in the action can also rest assured that regardless of the outcome, they will not be liable for costs over and above what is paid prior to commencement of the litigation. Important Message To Mortgage Advisers

Our case is a very simple one. West Brom are passing off their tracker mortgages as Standard Variable Rates. In their general Terms and Conditions brochure there are several conditions which are not relevant to these contracts. This is quite normal as mortgage conditions booklets are often generic documents covering a full range of mortgage products. For example, one of the West Brom’s general conditions prevents letting the property, note these are Buy to Let mortgages! Fortunately there is also a condition which says the offer letter takes precedent over the general conditions and it is the offer letter which confirms the mechanism for any variation to the interest rate being linked directly to the Bank of England base rate. There is clear evidence in the West Brom’s own promotional materials of the differences between Standard Variable Rate mortgages and Tracker Rates.

Why mortgages advisers should advise their clients to support this case now.

A line will be drawn in the sand a week before the case is referred to the Courts. After that stage no more cases will be included in the representative action. Until that time the cost of joining the Representative Action is £240 per affected mortgage, inclusive of VAT.

The outcome of the case will determine the price for people who wish to instruct the existing legal team after we have won the case. Figures of £1,500 per case are being discussed. Other lawyers will no doubt compete for the business off the back of the Case Law and may charge less, however, they will not have the benefit of the experience of our legal team and will they not have our QC’s and barristers opinions. Therefore, the choice facing affected borrowers is to pay £240 money now and take their chances or pay their money later and take their chances. The alternative is to pay West Brom what they want.

How this affects advisers?

Affected borrowers are clearly angry that they need to pay anything at all. They need to be advised of their choices. By advising affected borrowers of the existence of the Representative Action you could save them a lot of money in the long run and that will restore some goodwill. Some of them may not even be aware of the issue yet as the increased payments will only be debited from their bank accounts this month.

But won’t a win in Court affect all borrowers whether they join in or not?

Mark Smith (Barrister-At-Law) said …

“Representative actions, where one person starts a case representing many others, who all want the answer to a legal question from a court such as ‘is this contract enforceable against me?’ but are not seeking damages. All those who sign up to the action will get the benefit of the win, but they do not have to start their own cases, as they are ‘represented’ by the lead claimant.

The only people who will definitely benefit from success in the case are those who have signed up. Any others will have to fight their own corners individually, either alone or with legal help (which will inevitably be significantly more than the join-up fee for the group case).”

What if the case is lost?

There is always a risk of a Court case going the wrong way, however small that might be. If that is the case here there will undoubtedly be “no win no fee” negligence claims made against professional advisers. I have done everything in my power to test this and to create counter arguments for mortgage advisers if that scenario were ever to come to pass. It is my strongly held belief that mortgage brokers cannot be held responsible for interpreting and explaining legal contract conditions as they are not equipped to do so. This is far more akin to the role of solicitors acting for borrowers. I feel quite certain that affected borrowers also feel this way and for that reason, as the organiser and lead claimant in the Representative Action, I have managed to persuade the vast amount of borrowers NOT to make complaints against their mortgage advisers at this stage. I fully appreciate that it costs brokers £500 to deal with each complaint to the FOS and so far I have been able to persuade affected borrowers that complaints to brokers are unjustified.

Please note that I was a broker and MD of a very large firm until I retired in 2009.

The only time my guidance to affected borrowers regarding complaints against brokers has been ignored has been as a result of brokers being “unhelpful”. Clearly there is now an opportunity for brokers to be VERY helpful. I hope you get the point but for the avoidance of any doubt, I think affected borrowers might well have just cause to complain if brokers fail to alert them to the existence of the opportunity to save money by joining the Representative Action.

Bad news for solicitors then?

Probably not!

All the evidence we have points to a win against West Brom, they are certainly my target and hopefully everybody else’s. We have several solicitors on this forum who are affected borrowers too. That just galvanises my opinion that West Brom are trying to pull a fast one, which of course is what we’ve all thought since day one.

What if other West Brom Accounts become affected?

Accounts beginning with the number 9 are not currently affected but could be. These can’t be included in the initial action unless West Brom decide to increase their margins of these accounts before legal action commences. Therefore, for any member of the Representative Action who has paid for an account number beginning with an 8 and for currently unaffected borrowers who have contributed at least £50 to the campaign marketing fund the fee will still be £240 per account beginning with the number 9 if/when necessary.

All other accounts will be charged £1,500 to be represented after the initial Court action and Property118 will take 30% of this fee as a handling charge to raise funds for further development of the website.

The only money paid to Property118 in respect of the initial action is 10% of funds paid, all of which has gone into the campaign marketing fund. 100% of my own time has been pro bono (i.e. not chargeable)

There will be no increase in fees until the fund is closed seven days before papers are served to the Courts.

Summary of recommendations

If you have ever sold any West Brom Buy to Let mortgages I suggest you advise your clients to search Google for “West Brom Tracker Rate Class Action” and to register immediately.

Affected borrowers are very grateful to the likes of Cherryfind and FT Adviser for raising this important issue with the mortgage adviser community.

Once this campaign is concluded Property118 will be turning its attention towards the Bank of Ireland, Skipton Building Society and Manchester Building Society, all of which have pulled similar stunts. Hopefully the publicity surrounding the case against West Brom will also send a clear signal to other mortgage lenders which have written to the FCA to declare their interests in raising their tracker mortgage margins.

======================================================

If you have been affected by the West Brom's rate rise please visit the Property118 website and register your interest with the representative action (class action). Please do this ASAP!!!

Mrs_Mac_1

Legal action regarding rate hikes by West Brom BS and by Bank of Ireland gathering momentum on Property 118 dot com

torryquine

Legal action against West Brom just about to begin. Friday 28th March 5pm is the cut off if you are affected and want to join - details on property118 website

Lewis_Ranieri

Any mention of Power of Attorney contained within the Mortgage T and C's and the thread disappears because this small fact exposes the weak link in his claims of success against West Bromwich MC.

Landlord120

[TEXT DELETED BY FORUM TEAM]

What you said is not strictly true!
Indeed [Text removed by MSE Forum Team] was a finance broker, who was a Managing director for the firm [TEXT DELETED BY FORUM TEAM], but he was not prosecuted, it was three others who worked in a FRANCHISE of the [TEXT DELETED BY FORUM TEAM], called The Money Machine in High Wycombe that led to ALL franchises being closed down!

Lewis_Ranieri

Richard Watters - you sound like [Text removed by MSE Forum Team] touting for business, usual calling card!