Nationwide reneging on Mortgage Charter

MWT

ACG said:

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

Much like the statement that everyone would get help with their energy bills over winter... ... except for those who didn't...

Equal measures of needing to calm the markets with supportive sounding words, and careful avoidance of anything that will be too impactful for the lenders...

Going to take some tap-dancing to get everything in place, but even if it is in place and exactly as the sound-bites have stated, it really isn't going to make a huge difference to those that really are in trouble, and may actually be counter-productive for those who try to use it even though they are not really in trouble...

ACG

homesaver234 said:

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

What do you think lenders did before this charter if people were having payment difficulties? 
It wasnt just a case of going straight to repossess. They would try to sort out a payment plan and/or ensure the arrears never increased. 

That could involve a number of things such as altering the term, allowing payment holidays etc.  (https://www.nationwide.co.uk/mortgages/existing-mortgage-members/payment-holidays/ - this is nationwides wording, but many lenders had their own versions)

Brie

homesaver234 said:

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.

So 2 people out of how many thousands of employees haven't kept up to date with every single thing a large corporation is doing.  

homesaver234

What do you think lenders did before this charter if people were having payment difficulties?

NOT allow switch to interest-only with no affordability check. That's what,

They would try to sort out a payment plan

I really wonder which bit of "no affordability check" you don't understand.

homesaver234

So 2 people out of how many thousands of employees haven't kept up to date with every single thing a large corporation is doing.

You've presented no evidence for that. I assume that's because you have no evidence for that.

Brie

homesaver234 said:

So 2 people out of how many thousands of employees haven't kept up to date with every single thing a large corporation is doing.

You've presented no evidence for that. I assume that's because you have no evidence for that.

Personal experience.  Take my word for it that not everyone gets trained - they are on holiday, off sick, asleep and there's no real check that they understand everything that they are supposed to know about other than after the fact quality checks on their correspondence and phone calls.  Which will never get fed back to you as a customer but might put a small black mark on the employee's performance record.  

Do you have any evidence of being told the wrong information??  I suspect it's personal experience as well.

MWT

homesaver234 said:

NOT allow switch to interest-only with no affordability check. That's what,

Customers are still not going to be allowed to switch to interest-only, they are going to be allowed to make only interest payments for a period of up to 6 months, their mortgage product will remain repayment, and at the end of the 6 month period the unpaid capital component which has accrued will have to be addressed, most likely by increased monthly payments, so they will return to a higher payment than they were struggling with at the start of the 6 month period.

As per Nationwide...

homesaver234

Do you have any evidence of being told the wrong information??

Yes. As I already said. The phone call.

homesaver234

Customers are still not going to be allowed to switch to interest-only

The Charter says you're wrong: "* Switch to interest-only payments for six months"

they are going to be allowed to make only interest payments for a period of up to 6 months

Now you're saying you're wrong.

and at the end of the 6 month period the unpaid capital component which has accrued will have to be addressed

Capital does not accrue. You really are confused.

so they will return to a higher payment than they were struggling with at the start of the 6 month period.

You don't know that. It may be higher, same, or lower - depending on the interest rate.

MattMattMattUK

homesaver234 said:

Customers are still not going to be allowed to switch to interest-only

The Charter says you're wrong: "* Switch to interest-only payments for six months"

they are going to be allowed to make only interest payments for a period of up to 6 months

Now you're saying you're wrong.

They are not switching to an interest only mortgage, they are still within their original mortgage product, just with a temporary variation to the terms, to paying only the interest for six months, there is a fundamental difference, even if you are unable to understand that.

homesaver234 said:

and at the end of the 6 month period the unpaid capital component which has accrued will have to be addressed

Capital does not accrue. You really are confused.

The capital repayments will have accrued because they are not be being repaid, they did not say that capital will accrue, but "unpaid capital component", if you choose to deliberately misread things then that is an issue with your comprehension, not with the information. 

homesaver234 said:

so they will return to a higher payment than they were struggling with at the start of the 6 month period.

You don't know that. It may be higher, same, or lower - depending on the interest rate.

With almost all certainty. The prospect of interest rates falling in the next six months are somewhere between zero and none, therefore kicking the can down the road for six months is not going to help the vast majority of people. For those that do not extend their term then their monthly repayments will be higher, for those that do then there may be a small reduction in repayments, for most, with the same term length but now needing higher payments to meet their obligation to clear down the mortgage by the end of the term, the payments will increase.