Barclays / Woolwich Mortgage reserve

agarnett

It's not that different. Same lender, and as a Barclays customer, I know the lender for years sold mortgages (and "reserve" loan facilities) without doing any burdensome checking of such things as affordability or indeed what collateral would be used to pay of the final mortgage balance. Indeed my first mortgage with Barclays/Woolwich was the first one I'd ever had (and I'd had several by then) which did not require me to assign endowment policies that had been previously assigned to other lenders.

When endowment mortgages were all the rage, they weren't called "interest only". Those of us who know a little more than the average customer who signs what is put under their nose and thanks God for it and then goes back to work, knew that without an assigned endowment policy or tax free lump sum expected from an assigned pension, a mortgage is a dubious "interest only" arrangement. Mortgage sellers never laboured the fact. They just wanted to lend money and reap their monthly rewards for doing so. And when I negotiated a massive increase in my reserve some years ago because someone told me I could just ask and expect a nod, I only had to wave my arms a little bit about whether I might ever use it. Come to think of it, I think some reserves might correctly be called "Not even interest only - just nothing at all until the end if that's how you the customer likes it"!

It's all the same deal - its a question of very dubious selling and previous lack of affordability and/or checking for existence of actual loan collateral.

30 and 40 years ago, why were lenders asking for endowment policies to be assigned to them for chrissakes? So they could make sure that the collateral still existed and premiums were still being paid, of course.

And just like everything is blandly digitised now, the actual checking of serious paper periodically clearly was something the lenders decided they could let slide ...

Now FCA have been asking lenders questions ... hence this thread. Barclays/Woolwich reserves are supposedly secured loans, but in many cases they never before really checked the security :rotfl:

getmore4less

I still have all the docs from around 2003/4 when we switched over.

they were marketed as the "Woolwich Flexible Mortgage"

"Not even interest only - just nothing at all until the end if that's how you the customer likes it"!

In practice they were all like this if you did not pay the interest it just accrued(daily interest added monthly) as long as you did not exceed the reserve limit.

They did have the option to set up what they called loan pots where you change the OD(some or all of what you used) to a regular loan with payments(I believe these were lost around 2007 when they were converted to Barclay Mortgage Current accounts).

With offsets it worked a little different as net debt interest just used up some of your payment, and could cause underpayment if this was bigger than the mortgage balance.

Barclays/Woolwich reserves are supposedly secured loans, but in many cases they never before really checked the security

They were secured overdrafts, and the limit of Mortgage+reserve was 90% LTV that was the basis for the security.


It is clear in ALL the documentation and marketing material from that era the reserve is a SVR(unless offset where it is at the mortgage rate).


From the flexible mortgage T&C AD275 09/2001 (still in use in 2004)

39.1 We reserve the right to withdraw any unused part of your Mortgage reserve Account reserve limit for any reason at our total discretion with immediate effect.

FordyF

Should I make repayments monthly to my mortgage current account or to my mortgage reserve account (my mortgage currently has a rebalancing feature) I so don’t understand how this works . ?

amnblog

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