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Results: Is it fair banking institutes have gained with fixed rate mortgages just before sub-p

Yes

70.59% • 24 votes

No

23.53% • 8 votes

Don't know

5.88% • 2 votes

You may not vote on this poll

34 votes in total.

  • FIRST POST
    jonesoswestry
    fixed mortgages should banks gain from their sub-prime fiasco
    • #1
    • 26th Mar 14, 5:57 PM
    fixed mortgages should banks gain from their sub-prime fiasco 26th Mar 14 at 5:57 PM
    We have an issue with a 10 year fix we took out in 2006, on 2 fronts.
    We have been in touch with the Woolwich and the FSA (now FOS ).

    When we took out our 10 year fix with the Woolwich we were obviously unaware, and would not expect, that the banks had been involved in a sub-prime lending ticking bomb which would affect future interest rates for the next decade. Our decision to take out the mortgage

    At the time, 23rd august 2006, and I still have the documentation to prove this, the Woolwich was offering a better rate for a ten year fix than a 3 year fix and 5 year fix and better than their variable rate at the time.
    How often will you see one lender offer a 10 year fix interest rate lower than their 3year or 5year fix.

    Our issues are:-

    A. It has always seemed unfair that we have suffered by paying a higher rate and the banks have benefited as a result of their bad financial practices.
    B. Did they know this was about to happen and where therefore offering lower rates to entice as many people in before the event.

    Wikipedia states that the banks became aware of the sub-prime bomb in the summer of 2006.

    Do people think Woolwich knew and is it fair they have gained from the banking bad practise they were part of.
    This may refer to other lending institutes.
    Last edited by jonesoswestry; 27-03-2014 at 11:01 AM. Reason: pedantic reply
Page 4
  • jonesoswestry

    Had they not done these bad practices then you would have the same rate as you do now. You'd have a smug feeling that you made the right choice because rates didn't come down, but you'd still be paying the same as you are now.
    Originally posted by JimmyTheWig
    For someone who disagrees with me you always seem to quote my issues very well.

    Come on over to the dark side Luke
    • dunstonh
    • By dunstonh 28th Mar 14, 1:20 PM
    • 98,579 Posts
    • 67,061 Thanks
    dunstonh
    Not a Man u fan.

    Ill give you an analogy:-

    What if I put a bet on a horse race and the bookmaker then runs out in front of the horse and stops it from winning.
    He has therefore affected my chances of being on a winning horse and pocketed the money in the process???
    Originally posted by jonesoswestry
    Not a good analogy as you have got exactly what you bought.

    Perhaps a better analogy is that you put the bet on Wednesday and it rained on Friday and the ground was heavy on Saturday which no longer suited the horse you bet one.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • BillJones
    Whilst I am pleased for everyone to have their own views I need to clear up several inaccuracies about our knowledge of how mortgages work and add a bit more background information.
    Originally posted by jonesoswestry
    I trade interest rates for a living, son, you are living a fantasy life if you thiink that you can "clear up" the market for me that I've lived for twelve hours a day for several decades.
  • jonesoswestry
    I trade interest rates for a living, son, you are living a fantasy life if you thiink that you can "clear up" the market for me that I've lived for twelve hours a day for several decades.
    Originally posted by BillJones
    Totally lost me dad
  • BillJones
    Totally lost me dad
    Originally posted by jonesoswestry
    Well yes, but to repeat your own comment fromm previously, that says more about you tan it does about me.

    If you want a more detailed explanation as to why your complaint is misguided, from the point of view of someone paid to trade interest rates professionally, then you could always ask for it, but as what you seem to actually want is to act in a patronising fashion towards anyone who tries to help you out, I'll not expect a response in that direction.

    Your complaint demonstrates a real ignorance of interest rates, mortgages, and financial markets, and has a real seam of conspiracy theory running through it.
    • 007stuart
    • By 007stuart 28th Mar 14, 1:44 PM
    • 44 Posts
    • 63 Thanks
    007stuart
    I really think the OP is totally oblivious to the real world and it seems this thread is beginning to go the way of the infamous Subway thread.


    Whatever is said by others the OP ignores or disparages, could OP be a troll?
  • BillJones
    Not a good analogy as you have got exactly what you bought.

    Perhaps a better analogy is that you put the bet on Wednesday and it rained on Friday and the ground was heavy on Saturday which no longer suited the horse you bet one.
    Originally posted by dunstonh
    Precisely. Plus, of course, he'd need to assume that the bookmaker knew that the rain was coming, but offered "teaser" odds on a horse that he knew would suffer in the wet.
    • Thrugelmir
    • By Thrugelmir 28th Mar 14, 1:46 PM
    • 66,351 Posts
    • 58,401 Thanks
    Thrugelmir
    Since accusing me of patronising drivel and suggesting that I comment or shut up. You have made 7 responses to other posters without even acknowledging mine.

    I am happy to debate with anyone. Totally respect their views if we disagree. Also admit my own mistakes. So I refer you back to my original comment also something you said in response to another poster.

    That isn't relevant for me.
    You are just another person that I commonly have dealt with in many years of working within finance. That acts like a kid in the playground. Full of bravo but can't behave like an adult when they hear something they don't want to hear. Attempts to muddy the waters with unrelated issues.

    My original post was spot on. I was wasting my time. I suggest you read and learn as that's what's great about this forum.

    Don't bother telling me to shut up again. As this is my last contribution to the thread.
    “Risk comes from not knowing what you are doing. – Warren Buffett”
    • JimmyTheWig
    • By JimmyTheWig 28th Mar 14, 1:50 PM
    • 11,915 Posts
    • 11,435 Thanks
    JimmyTheWig
    Not a Man u fan.
    Originally posted by jonesoswestry
    Me neither. Which is why I would be selling the signatures rather than keeping them!


    Ill give you an analogy:-

    What if I put a bet on a horse race and the bookmaker then runs out in front of the horse and stops it from winning.
    He has therefore affected my chances of being on a winning horse and pocketed the money in the process???
    I'm afraid this is round the wrong way again.
    I would claim that going for a variable rate (or even a short(er) term fix) is more like gambling. When you place a bet the future outcome is unknown. With a fixed rate (especially one that lasts the duration of the whole mortgage term) there is no unknown.
    So your horse race analogy would be like going for a variable rate mortgage (or a shorter term fix) then the bank doing naughty things and pushing rates up.
    What happened is more like this...

    You consider putting a bet on horse A. [Variable rate or shorter term fix mortgage.]
    The odds [interest rates] aren't favourable so you decide not to. [Long term fixed rate mortgage.]
    The bookmaker [bank] runs in front of horse B [lends irresponsibly and manipulates rates] and horse A wins [it turns out a variable rate would have been cheaper in the end].

    But you didn't bet [you went for a long term fixed rate mortgage] so the outcome of the race [which mortgage would have been better in hindsight] is irrelevant to you.

    You'd be kicking yourself for not betting on horse A [for not getting a variable rate deal] but the fact that horse A won [interest rates came down] and the reason that that happened don't affect your outcome.

    Again, all you've lost by the bookmaker's naughty actions is the smug feeling that you would have got had horse B romped home to victory.
  • jonesoswestry
    Since accusing me of patronising drivel and suggesting that I comment or shut up. You have made 7 responses to other posters without even acknowledging mine.

    I am happy to debate with anyone. Totally respect their views if we disagree. Also admit my own mistakes. So I refer you back to my original comment also something you said in response to another poster.



    You are just another person that I commonly have dealt with in many years of working within finance. That acts like a kid in the playground. Full of bravo but can't behave like an adult when they hear something they don't want to hear. Attempts to muddy the waters with unrelated issues.

    My original post was spot on. I was wasting my time. I suggest you read and learn as that's what's great about this forum.

    Don't bother telling me to shut up again. As this is my last contribution to the thread.
    Originally posted by Thrugelmir
    please dont go
    • Mortgage_Mark
    • By Mortgage_Mark 28th Mar 14, 2:01 PM
    • 851 Posts
    • 352 Thanks
    Mortgage_Mark
    Unless I've missed something over the past four, admittedly very interesting, pages - if you weren't advised on the product, where exactly do you think your complaint should be upheld?

    That's like buying a Ford Ka and taking it back 5 years later and claiming it wasn't fit for purpose because you started a family three years after buying it...?
    I am a mortgage adviser.

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • jonesoswestry
    Well yes, but to repeat your own comment fromm previously, that says more about you tan it does about me.

    If you want a more detailed explanation as to why your complaint is misguided, from the point of view of someone paid to trade interest rates professionally, then you could always ask for it, but as what you seem to actually want is to act in a patronising fashion towards anyone who tries to help you out, I'll not expect a response in that direction.

    Your complaint demonstrates a real ignorance of interest rates, mortgages, and financial markets, and has a real seam of conspiracy theory running through it.
    Originally posted by BillJones
    I dont think ive tried act in a patronising way with anyone who has tried to help, only anyone has acted in a patronising way to me. ie calling me son
  • jonesoswestry
    Unless I've missed something over the past four, admittedly very interesting, pages - if you weren't advised on the product, where exactly do you think your complaint should be upheld?

    That's like buying a Ford Ka and taking it back 5 years later and claiming it wasn't fit for purpose because you started a family three years after buying it...?
    Originally posted by Mortgage_Mark
    Back to the patronising threads I write of.
    Its nothing like your analogy at all.
  • jonesoswestry
    Me neither. Which is why I would be selling the signatures rather than keeping them!



    I'm afraid this is round the wrong way again.
    I would claim that going for a variable rate (or even a short(er) term fix) is more like gambling. When you place a bet the future outcome is unknown. With a fixed rate (especially one that lasts the duration of the whole mortgage term) there is no unknown.
    So your horse race analogy would be like going for a variable rate mortgage (or a shorter term fix) then the bank doing naughty things and pushing rates up.
    What happened is more like this...

    You consider putting a bet on horse A. [Variable rate or shorter term fix mortgage.]
    The odds [interest rates] aren't favourable so you decide not to. [Long term fixed rate mortgage.]
    The bookmaker [bank] runs in front of horse B [lends irresponsibly and manipulates rates] and horse A wins [it turns out a variable rate would have been cheaper in the end].

    But you didn't bet [you went for a long term fixed rate mortgage] so the outcome of the race [which mortgage would have been better in hindsight] is irrelevant to you.

    You'd be kicking yourself for not betting on horse A [for not getting a variable rate deal] but the fact that horse A won [interest rates came down] and the reason that that happened don't affect your outcome.

    Again, all you've lost by the bookmaker's naughty actions is the smug feeling that you would have got had horse B romped home to victory.
    Originally posted by JimmyTheWig
    The only trouble with this revised analogy is I wouldn't let the odds affect my choice.
    My choice would be on past form like whether on not the horse I was backing had fallen before and likely to let me down by poor form.
    • Mortgage_Mark
    • By Mortgage_Mark 28th Mar 14, 2:27 PM
    • 851 Posts
    • 352 Thanks
    Mortgage_Mark
    Back to the patronising threads I write of.
    Its nothing like your analogy at all.
    Originally posted by jonesoswestry
    You mention patronising posts and yet you fail to answer a genuine question I had for you?

    Good luck with your complaint, however frivolous people may deem it.
    I am a mortgage adviser.

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • jonesoswestry
    Unless I've missed something over the past four, admittedly very interesting, pages - if you weren't advised on the product, where exactly do you think your complaint should be upheld?
    Originally posted by Mortgage_Mark
    In answer to the question at risk of being accused of whining.

    Where did I ever say I was advised....my complaint is how could I have possibly known that the banks had been buying up subprime loans that would affect the interest rate for 5 years?
    I think I may have mentioned this at some point somewhere Ill have to look back.
    • Mortgage_Mark
    • By Mortgage_Mark 28th Mar 14, 2:47 PM
    • 851 Posts
    • 352 Thanks
    Mortgage_Mark
    But the point is that you bought a product that met your needs at that time. Similar to my car analogy, at the time you bought the car, it was what you needed. The manufacturer can't be held responsible for the fact that you wanted a different product half way through - they sold the product at the agreed price.

    When they lent you that money, it was priced at the level they'd 'bought' it for, so they haven't 'made money' out of you at all - the level of interest rates after you've taken out that mortgage are irrelevant, they've paid the price for your particular loan at the point you took it out.
    I am a mortgage adviser.

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • jonesoswestry
    But the point is that you bought a product that met your needs at that time. Similar to my car analogy, at the time you bought the car, it was what you needed. The manufacturer can't be held responsible for the fact that you wanted a different product half way through - they sold the product at the agreed price.

    When they lent you that money, it was priced at the level they'd 'bought' it for, so they haven't 'made money' out of you at all - the level of interest rates after you've taken out that mortgage are irrelevant, they've paid the price for your particular loan at the point you took it out.
    Originally posted by Mortgage_Mark
    It is relevant to Barclays/Woolwich but not me but I do get your point on not made money out of me.
  • jonesoswestry
    Not a good analogy as you have got exactly what you bought.

    Perhaps a better analogy is that you put the bet on Wednesday and it rained on Friday and the ground was heavy on Saturday which no longer suited the horse you bet one.
    Originally posted by dunstonh

    Back in the room, I nearly missed your thread.

    You analogy fails to see this would be an act of god and not an act incompetence.
    • JimmyTheWig
    • By JimmyTheWig 28th Mar 14, 3:16 PM
    • 11,915 Posts
    • 11,435 Thanks
    JimmyTheWig
    The only trouble with this revised analogy is I wouldn't let the odds affect my choice.
    My choice would be on past form like whether on not the horse I was backing had fallen before and likely to let me down by poor form.
    Originally posted by jonesoswestry
    What? So if you were offered odds of 100/1 on a roll of a fair die landing on 6 you wouldn't take it? [Or, at least, no more likely to take it than if the odds were 2/1?]
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