What Does A Mortgage Contract Really Mean?

1 Mar

Today is a bitter day.  Today I have lost my battle against Skipton Building Society.

It is true; I was warned. Banks can do what the F they like regardless of any contract that you sign. It means jack all if they decide they don’t want to honour it.

Fairness? Roll over. That doesn’t exist.

So what happened?

Well you may remember I wrote about it here – it was a letter I received out of the blue from Skipton which essentially would change the key borrowing terms of my 25 year mortgage I had taken on an investment property.

The nuts and bolts were – after the 5 year fixed period had elapsed, rather than a ceiling of 3% above base being applied (as my contract clearly stated) Skipton decided to change the terms due to “exceptional circumstances” and charge what they felt like/ how much they wanted/ how much they needed to fill their coffers.  The rate they decided to charge me was 4.95% – some 1.45% ABOVE the agreed contract rate.

I argued. I ranted. I raved. I sent long letters. I sought out case laws. I contacted a consumer pressure group for a legal class action (details kindly provided by Nick P in his comments on my original blog).

I tried every which way.

I got nowhere.

So I went to the Ombudsman.  This could not be fair. How can it be that a bank decides because market conditions no longer suit them they can just change a 25 year contract?

Well they can. And so the Ombudsman letter tells me – it’s also fair.

And apparently the FSA also agree that what Skipton has done is fair. How is it fair for Skipton to renege on a key contract clause?

Apparently it’s fair because Skipton:

a) Informed it’s customers of it’s decision to breach the mortgage contract

b) Gave customers the “choice” that if they didn’t like this breach then they could leave.

That’s it – you got it, apparently the Skipton’s response “which resulted in a fair outcome for consumers” was the reponse:

If you don’t like it, FUCK OFF

Well, that would be great if I had a choice; I would leave.

But, the mortgage market is a mess. Nobody wants to lend.

So I had no choice, I had to stay with Skipton. For the privilege I also got to pay another 2% arrangement fee for my remortgage (which they were generously allowing me to do).  It wouldn’t feel so big a deal if this was just one property…but there were several.

In “fairness”, Skipton has made a killing out of me – it’s just added £1000s of pounds to every mortgage in arrangement fees and added more to the amount I owe at the end.  Of course, why shouldn’t I feel that is “fair” as the Ombudsman, FSA and Skipton tell me.

But then I am just the muppet who thought that a mortgage contract was a legal document and meant something. More fool me.

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