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fixed mortgages should banks gain from their sub-prime fiasco

edited 27 March 2014 at 11:01AM in Mortgages & Endowments
153 replies 8.2K views
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  • GMS wrote: »
    If you have had a complaint upheld on the basis of getting what you asked for but not being offered a crystal ball by the lender then there will be no mortgages offered in future.

    Lenders could not risk the claims when the borrower changes their minds and is backed by the adjudicator.

    You obviously don't get it. Its not about what he asked for. Its about what he could have had.
  • What losses do they think have arisen?

    Current applied rate against average rate since 2006 I assume.
    Add to this a new rate and term going forward.
  • JimmyTheWigJimmyTheWig Forumite
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    Current applied rate against average rate since 2006 I assume.
    Add to this a new rate and term going forward.
    I think I'd find out rather than assume if I were you...
  • I think I'd find out rather than assume if I were you...

    You asked I answered.
  • ThrugelmirThrugelmir Forumite
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    Therefore.
    'I conclude you would have been able to achieve a better rate of interest had you not taken out the fixed rate term before the crisis occurred.'

    Finally.
    'I have instructed the Woolwich B.S to compose a compensatory package for losses arisen.'

    Then there's something missing. As the conclusion as quoted is stating the plainly obvious.

    While the reason for compensation is so obviously missing from the edit.
    "The human understanding when it has once adopted an opinion ... draws all things else to support and agree with it." - Francis Bacon (1561 – 1626)
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  • edited 14 May 2014 at 5:03PM
    Let_Us_SeeLet_Us_See Forumite
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    edited 14 May 2014 at 5:03PM

    Firstly.
    'There was nothing to make me think the bank could predict the the potential impact on interest rates created by the imminent banking crisis.'

    However.
    'Whilst interest rates are unpredictable and any global event might potentially have an effect, the effect on interest rates came about as a result of the banking sector.'

    Therefore.
    'I conclude you would have been able to achieve a better rate of interest had you not taken out the fixed rate term before the crisis occurred.'

    Finally.
    'I have instructed the Woolwich B.S to compose a compensatory package for losses arisen.'

    Personally, I am staggered by the decision, if not the convoluted decision making process of the FoS. Firstly, they admit the bank could not predict rates an imminent banking crisis. Secondly, they confirm rates are unpredictable and can reflect global events, and finally, they evidenced that you could of achieved a better rate of interest had you not taken out a fixed rate.

    I am positive there were lower variable rates available than your 10 year fixed rate, but they would not allow you to budget your mortgage payments or protect you from increases in interest rates, which I imagine was your main reason for applying for a fixed rate?

    Whilst I have no faith in banks I simply cannot believe this decision. I look forward to the press picking up this story as the ramifications could be far reaching.
  • Thrugelmir wrote: »
    Then there's something missing. As the conclusion as quoted is stating the plainly obvious.

    While the reason for compensation is so obviously missing from the edit.

    That's two posts since you posted you were no longer going to submit to the thread!!!!
  • Leon_WLeon_W Forumite
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    Interesting thread.


    I suppose the only way to settle it one way or the other is to post up the letter somewhere jonesoswestry ?

  • dunstonhdunstonh Forumite
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    Given the ramifications of this decision, I expect the media will pick up on it quickly. They do tend to look at ombudsman decisions and publish weird or unusual outcomes. This one has the potential to end fixed rate mortgages and is a major story. Until then, I remain sceptical. Either that or its a rogue adjudicator who will get overruled by an ombudsman upon appeal or there is some other issue not mentioned which is creating some outcome we cant see.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • ThrugelmirThrugelmir Forumite
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    That's two posts since you posted you were no longer going to submit to the thread!!!!

    Apologies if I have touched a nerve.

    I'm merely interested in the reasoning behind the decision as has far reaching ramifications. These extend well beyond your individual case in which I have no interest.
    "The human understanding when it has once adopted an opinion ... draws all things else to support and agree with it." - Francis Bacon (1561 – 1626)
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