Nationwide reneging on Mortgage Charter

MWT

homesaver234 said:

That would mean they agreed the Charter in bad faith. Sounds very unlikely to me. They'd be slaughtered when they fail to abide.

The problem is they will also be 'slaughtered' if they permit borrowers to take one of these options without questions and then get sued for failing their duty to protect their customers from the consequences of that choice...

This is why it is taking a little while to get the legal framework clarified and their staff trained.

homesaver234

The problem is they will also be 'slaughtered' if they permit borrowers to take one of these options without questions and then get sued for failing their duty to protect their customers from the consequences of that choice...

Any such lender would and should have declined to sign the Charter, as indeed some others declined.

Any lender that's signed either does not have the above problem, or plans to reneg on the Charter which is surely unlikely.

MWT

homesaver234 said:

The problem is they will also be 'slaughtered' if they permit borrowers to take one of these options without questions and then get sued for failing their duty to protect their customers from the consequences of that choice...

Any such lender would and should have declined to sign the Charter, as indeed some others declined.

Any lender that's signed either does not have the above problem, or planes to reneg on the Charter which is surely unlikely.

Just wait a while longer so the details are clear for everyone on both sides, no point in rushing to judgement when we don't even know how these aspects will be handled yet...

ACG

homesaver234 said:

ACG said:

The building society have said they are not just going to allow people to switch to interest only without any questions. And depending on the answers to those questions they may refuse the request. 

Then they'll be in breach of their agreement to follow the Charter, which has:

A new agreement between lenders, the FCA and the government permitting customers to switch to an interest-only mortgage for six months ... if they choose to. Both options can be taken without a new affordability check

Ultimately the building society have basically said they have rules to follow with their governing body and those supersede this charter

That would mean they agreed the Charter in bad faith. Sounds very unlikely to me. They'd be slaughtered when they fail to abide.

I doubt it. Their defence would be:
1) We have legal obligations. 
2) We are basically ensuring that people are not going on interest only in order to go and pay for a holiday or a new TV. 

If your telling me they would get slaughtered for ensuring that people do not prioritise a holiday over their mortgage payment, I think we live on a different planet. 

They are opting to go above and beyond what they are legally required to do and they are going to implement an optional charter as best they can. But they have legal and regulatory requirements to follow. 

Surely it would be better for them to refuse than to be in the paper in 12 months time "My lender allowed me to go on interest only in order to go on holiday, now my payments are higher and it will cost me more in interest".

In any event, the smaller lenders are typically far more forgiving and prepared to work with you than the high street lenders anyway. Realistically this is going to have a bigger impact on the bigger lenders than it will on the smaller lenders. 

homesaver234

Just wait a while longer so the details are clear for everyone on both sides

The details are already clear. However they may indeed change, since Nationwide's stated position is unsustainable PR-wise.

homesaver234

Their defence would be:
1) We have legal obligations. 
2) We are basically ensuring that people are not going on interest only in order to go and pay for a holiday or a new TV. 

That would have been a defence to declining to sign the Mortgage Charter. It is no defence to signing it then failing to abide by it.

If your telling me they would get slaughtered for ensuring that people do not prioritise a holiday over their mortgage payment,

I didn't say anything like that. I said "They'd be slaughtered when they fail to abide."

they are going to implement an optional charter as best they can.

Govt. says they've agreed to the published terms, not some lesser "best as they can."

But they have legal and regulatory requirements to follow

Govt. and FCA have relaxed the requirements specifically to allow lenders to abide by the charter.

Surely it would be better for them to refuse than to be in the paper in 12 months time "My lender allowed me to go on interest only in order to go on holiday, now my payments are higher and it will cost me more in interest".

That would be a breach of the agreement the Govt. says they have signed. So not, not better. The agreement specifically allows interest-only without affordability checks. If they refuse to provide that, they are in breach of the Mortgage Charter.

MWT

homesaver234 said:

Just wait a while longer so the details are clear for everyone on both sides

The details are already clear. However they may indeed change, since Nationwide's stated position is unsustainable PR-wise.

You place way too much stock in an offhand comment from one front line rep, they are not making policy statements for Nationwide...

You really will just have to wait and see just how what has been agreed is implemented.

Once you can see that you can then decide if outrage or acceptance is appropriate...

ACG

homesaver234 said:

But they have legal and regulatory requirements to follow

Govt. and FCA have relaxed the requirements specifically to allow lenders to abide by the charter.

And Insurance?

Lets face it in reality this charter does very little extra in the real world. It is a publicity stunt for the government. They have said seeking advice wont affect your credit score - it never has. You cant get a bad score for asking for help. They have said you will not be repossessed within 12 months, I doubt many people lose their home within 12 months of missing the first payment.

Is that smoke and mirrors by the government or is it a genuine lack of understanding? 

homesaver234

You place way too much stock in an offhand comment from one front line rep, they are not making policy statements for Nationwide...

What ever made you think it was an offhand comment from one front line rep?? In fact she checked it with her manager and confirmed.

homesaver234

Lets face it in reality this charter does very little extra in the real world. It is a publicity stunt for the government. They have said seeking advice wont affect your credit score - it never has. You cant get a bad score for asking for help. They have said you will not be repossessed within 12 months, I doubt many people lose their home within 12 months of missing the first payment.

Is that smoke and mirrors by the government or is it a genuine lack of understanding?

A genuine lack of your understanding, I think.

Because the charter includes:

"
A new deal between lenders, the FCA and the government permitting customers who are up to date with their payments to:

* Switch to interest-only payments for six months or
* extend their mortgage term to reduce their monthly payments and give customers the option to revert to their original term within 6 months by contacting their lender
"


If you really think that is "very little extra", then you don't understand the current mortgage crisis.

Mortgage catastrophe brews in Britain as millions are pushed toward insolvency
https://www.cnbc.com/2023/06/26/uk-mortgage-crisis-millions-pushed-toward-the-brink-of-insolvency.html