Mortgage Charter Problem at Nationwide-?

Muriel24

I have been informed by a Nationwide mortgage advisor that I am unable to use the provisions of the Mortgage Charter because there is less than 12 months left to run on my current mortgage term.    I have read the Mortgage Charter in full and it does not mention any such limitation or exception.   Please could someone confirm whether the advice I was given is correct?

marcia_

 What do you want to use the charter for? 

Nationwide https://www.nationwide.co.uk/mortgages/existing-mortgage-members/home-support-hub/

Muriel24

Hi Marcia, I wanted to extend my term to reduce my monthly outgoings, potentially switching back in 6 months' time.  I had read the Nationwide website, including the page you have mentioned (about the Mortgage Charter) and saw no reason why I shouldn't be able to do this.  However, I was informed by a Nationwide mortgage advisor (who in turn was advised by her internal helpline) that I couldn't do this under the Mortgage Charter as there were fewer than 12 months remaining on my term.

Muriel24

Can anyone please answer my query about the provisions of the Mortgage Charter?  Nationwide has taken the view that it cannot be used by anyone with less than 12 months remaining on their mortgage term, regardless of any other criteria....-?

mybestattempt

My understanding of the charter is that it sets out various options you can apply for, it doesn't mean you're automatically entitled to any of them.

The charter allows you to ask, but Nationwide can refuse.

Muriel24

Thanks very much @mybestattempt - I wonder if you could you point me in the direction of written confirmation of this?    Below is the only document Citizen's Advice have (which is the one I've been looking at):

www.gov.uk/government/publications/mortgage-charter/mortgage-charter

The relevant para being: 

"Signatories to the Charter have agreed:...

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"

but it doesn't seem to suggest any discretion on the part of the lender-?

marcia_

Muriel24 said:

Thanks very much @mybestattempt - I wonder if you could you point me in the direction of written confirmation of this?    Below is the only document Citizen's Advice have (which is the one I've been looking at):

www.gov.uk/government/publications/mortgage-charter/mortgage-charter

The relevant para being: 

"Signatories to the Charter have agreed:...

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"

but it doesn't seem to suggest any discretion on the part of the lender-?

 Its s charter not a Law which means they can apply it or not as they see fit 

mybestattempt

https://www.gov.uk/government/publications/mortgage-charter/mortgage-charter#the-charter

This only mentions extending a mortgage term as something that's an option to help, depending on the borrowers circumstances, so clearly, to me, it's at the lender's discretion.

Muriel24

Thanks Both.

It's my understanding that a Charter, once signed, is effective to grant legal rights from the signatory to the persons identified in it under English Common Law (eg. Magna Carta).  It's not something that signatories can then pick and choose from.   That's why I'm looking for some specific wording either in the document itself or in a supporting or overarching document of which I am unaware which allows a signatory to impose its own limitations and exceptions/use its discretion in relation to its provisions.
   
The quote in my previous post is lifted directly from the Charter itself - here is the relevant section in full with the part I am seeking to rely on in bold type:

"Signatories to this Charter have agreed:

• From 26th June, a borrower will not be forced to leave their home without their consent unless in exceptional circumstances, in less than a year from their first missed payment.
• With effect from 10th July customers approaching the end of a fixed rate deal will have the chance to lock in a deal up to six months ahead. They will also be able to manage their new deal and request a better like for like deal with their lender right up until their new term starts, if one is available.

• 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

These options can be taken by customers who are up to date with their payments without a new affordability check or affecting their credit score. Customers who are currently in arrears should continue to work with their lender for the support that they need."

There is no element of discretion implied in this effective clause, hence my query.

Muriel24

I’m pleased to be able to report that Nationwide have now apologised for their mistake – I was correct; the provisions of the Mortgage Charter do apply in cases where there are less than 12 months left to run on a mortgage term - and confirmed they would be happy to help me with this.   (Per the Citizen’s Advice Bureau’s suggestion I raised a complaint with Nationwide, who dealt with it within 4 working days).  I hope this will be helpful for someone else.

Muriel24

(@Phoenix72) Ha!  Thankfully that wasn't necessary...    Not everyone's cup of tea it seems; but it was the most well-known example of a charter I could think of by way of illustration...