the mortgage works - this cant be right!

[audiobookman]

Hi,

our mortgage is currently 10 years old, we started of in the bristol and west, then it went to another company i cannot remember the name, then the bank of ireland, and now its moved to the mortgage works (part of the nationwide building society).

The changing of companies hasnt been an issue for us as we have always been in fixed rate.

 

Anyhow we got a letter today which has confused me, or its designed to probo rip people off.

Our fixed rate is coming to an end next year but the way the mortgage works seems a bit suspect.

 

they have stated anyone on standard varible rate will remain on it until april (currently at 2.99%) then move over to TMW residential managed rate (RMR) which is currently at a whopping 4.79%!!!!.

as a consession they are letting customers stay on the svr until april (how nice and deacent of them)

 

Is this normal pratice now in mortgage companys - we have been sheltered because of the fixed rates, or should i just jump the sinking ship as soon as the fixed rate expires.

any insight to this?

thanks

[sillygirl1]

Check to see what is available, you may find it hard to jump ship but after 10 years without missing a payment you may find you can get a mainstream deal - but watch out for the newer 'administration and set up fees' which can cost as much as £5,000.

[dlawly]

This to me STINKS. 14,000 peoples mortgages have been handed over to 'the mortgage works' which is part of the nationwide. Its actually the buy to let arm of nationwide.

So these customers who were on SVR of 2.99% are now told they are being moved to 4.79% in March 2012. This despite their being numerous letters saying their will be no changes to the terms and conditions. They get around this as the terms state the mortgage can be sold to another bank who can change the interest rates.

Why havent they automatically put the BOI customers onto the nationwide SVR od 2.5% ? or kept them at 2.99% ? i'll tell you why, it's not profitable enough for them. They know that people wont be able to pay effectiviely double what they were paying and will move to one of their fixed rate deals which are still higher than the BOI SVR.

Natiowide have a lot to answer for, a lot of these 14,000 will not for criteria to take out a new mortgage as things have really tightened up regarding new mortgage lending. Many families will now face either paying nearly double the mortgage they were used to paying or face repossesion putting people who can currently afford their mortgages onto the council list. It stinks to high heaven.

I urge all BOI customers to contact their local MP's to get this brought up in the commons so these greedy bankers can be stopped. The banks got this country in the state it is and now they are technically robbing people (albeit within the law) to get money back. The law needs changing! God forbid the impact this decision by Nationwide could have on somebody feeling vulnerable and finding things a struggle, its enough to send anyone over the edge.

[audiobookman]

i take it you got the letter as well yesterday??,

i was gobsmacked with it, i took out the best mortgage i could fine when we purchased, we went into our local bristol and west and they offered us an excellent fixed rate deal for the time, and they were excellent to deal with. I remember when we first purchased how helpful they were - one month because of strike action at work i struggled - they agreed to suspend payment that month and just up the payments before the next statement was due saving intrest and late payment fees - they were excellent for us.

we have gone from a mainstream bank to an unknown entity, we have always payed on time and we dont actually owe that much now (Well below 30k).

I dont really want to move mortgages as its such a pain in the rear, but i think i will be having a word with my independant mortgage advisor to see if he can get me anther fixed term mortgage to term, we have been paying approx 5% all the way though.

also were not buy to let so have someone must have made a mistake with us maybe?

[audiobookman]

oh well just spoke to them, the lady i spoke to was very nice but its correct,

she said they had been inundated with ex boi calls expressing thier displeasure at this hike, i only called to get my balance and redemption date, i have until july before my fixed rate comes to an end so i can spend a bit of time assessing the market.

i think a call to my mp may also be on the cards.

[dlawly]

there does some to be some confusion, some people reading other blogs on this subject seem to think this is just affecting 'buy to let mortgages' Let me be clear these are all HOMEOWNER mortgages that nationwide have put into their 'buy to let' arm of the business i.e 'the mortgage works' as they offer the highest SVRs. The governement certainly need to crack down on practices like this. I believe this move will see thousands of hard working families homeless, these are people who can afford to pay their mortgages at the current BOI SVR or be even better off with the nationwide SVR but the greedy banks have just doubled their interest rates with the click of a finger.

I ask all people reading this to imagine they are on a standard variable rate and their lender sends a letter to say it being doubled ? you would be devasted? surely they cant do this you would ask? well the answer is they can and they will. Only government can stop this disgusting corrupt banking industry.

[justice4people]

Yes, I also got the same TMW letter advising of the increase in SVR from 2.99% to 4.79%!

 

Can't believe this, the letter had the cheek to say' your terms and conditions have not changed!' How is approx. doubling our interest rate not changing what we signed up to with BOI?

 

After 10 years of being with BOI- change will be inevitable however, can't believe that TMW are 'waffling' in letter saying that decision to increase is not fully decided - When I called to discuss I was informed that this will most likely occur!! Of course it will happen, more money in the pockets of the banks. Why can't TMW be transparent and say - we want to make more money out of you because we can!

 

I have written to Rip of Britain, Dominic Littlewood, Watchdog, contacted the FSO and complained that I am dissatisfied to TWM complaints team- this is injustice to the people. TMW needs to explain how can they as lenders increase rates by 1.8% in today's financial climate and in view of the fact that the BoE base rate is low- common sense is not being applied.

 

TMW needs to understand business is about PEOPLE and they are in the business of dealing with PEOPLE not numbers on a paper. Some of us clients have been with BOI for 10 years, paid responsibly each month, made over payments when possible and should be treated with respect and not ripped off like this.

 

All BOI mortgage owners moved to TMW - need to act and speak up. Remember the unfair client charges charged by a certain high st bank- the people standing and speaking up, stopped the situation.

 

I will be writing to my MP too.

 

We need to get onto face book and continue to unite the 14,000 account holders transferred to TMW as I can't believe that any of them will be accepting of this situ? Certain that they will be losing owners who can afford to move. Those that can't are the most venerable and are being exploited in this situ. We have a few weeks before the new SVR are enforced on us.

 

 

 

Check out comments on money saving expert forum. The mortgage works subject title.

Edited December 17, 2011 by justice4people

[dumpster]

I got the same letter, l also couldn't believe it, although I suppose I could in all honesty. Mines only about a 30% LTV so I shouldn't have too much trouble moving. But I'm more worried about my Rental mortgage that has also gone over to TMW a while back, but thats on a Lifetime Base rate tracker so I'm really hoping they can't get out of that one at the moment.

After a quick look around the HSBC seem to offer the best. I don't want a fixed, had that till this year and overpaid all the way, my guess is rates will stay low for a long time yet, so a Tracker is still my favoured option. HSBC do a lifetime tracker for about 3% if IRRC, fee free as well, which could work out ok. Only slight worry is they seem to be about to be swallowed by Santander and I really don't want anything to do with that shower of sh1te.

I am just wondering whether to get onto this in the new year rather than wait till April when other things may have happened to make it even harder. There were some announcemnets yesterday about making applications harder, as if thats going to help get money moving:|

Edited December 20, 2011 by dumpster

[Philippe]

I also received the same letter, and I could not believe it either. First I was incredulous: how can a lender change a Standard Variable Rate of 2.99% by a Residential Managed Rate of 4.79% with a simple letter? Then I read all the blogs and articles from newspapers, including the FT, and realised it was no mistake. I am now so angry that I am shaking as I write this.

 

My partner and I took our mortgage in 2007. It was an interest only mortgage with a discounted rate for the first 3 years. We made regular overpayments (10% without early repayment charges), so that by the end of the discounted rate period, when our rate increased to standard SVR, the monthly interest payments were manageable.

 

I lost my job in 2008 as a result of the banking crisis. Luckily I had sufficient savings so we continued to pay our interest payments without any problem. In March 2011 my situation changed dramatically. As a result of a motorbike accident, I suffered serious injuries and I am now paraplegic. I am still in hospital completing my rehabilitation, but am hoping to be discharged sometime in early 2012, although I will still be going to the clinic as an outpatient for a while.

 

The letter from The Mortgage Works could not come at a worse time for me. I had planned to spend most of the rest of my savings to make my house wheelchair friendly. My partner has just agreed with his employer to take a 6-month sabbatical to oversee the works and be there when I come home, using his savings to help me at a very difficult time of our lives. With no prospect of being able to work in the foreseeable future, I simply cannot move my mortgage. The 1.80% rate increase means that I have to either use my savings to make a massive overpayment in order to reduce interest payments for a house I can no longer live in, or make my house accessible but swallow the rate increase which means my interest payments will be totally unsustainable.

 

We simply cannot accept that TMW replaces the BOI SVR of 2.99% by a "RMR" rate of 4.79%, a 60% increase! The letter is outrageous and their "concession" to keep the current rate until March 2012 demeaning. As stated in their letter, TMW is a subsidiary of Nationwide so we must demand the same Base Mortgage Rate as Nationwide customers for mortgages reserved before April 2009, i.e. 2.50%.

 

We need to unite and threaten to put the name of Nationwide to shame. We should use the full power of the internet to mount a campaign against Nationwide. They may be right legally speaking (although this is questionable), but commercially this is completely out of order and if we make sufficient noise they will have to retreat.

 

Can someone start this Facebook page and all 14,000 mortgage holders will sign up and send to their friends etc?

[mechanic2012]

i am also one of the 14000 people that Nationwide seem smug about, as they see this a way of makeing a fast buck. As i dont see many complaints from 14000 customers most of you must be ok about paying more money,let alone paying it to an internet based company TMW you will not be able to walk into Nationwide branches to discuss your mortgage.so you want to jump ship 2 year fixed may cost you £900-1200 even a no fee pakage has a min fee. What we have is people power 14000 so when they send you direct debit mandate,dont send it back or sign it because they will take what they like, set up standing order for the amount you paid BOI 14000 mortgages in arrears 14000 repossesions i dont think so, the gov will not let happen.The banks got us in this mess they just want to bang some more nails in the coffin.

[echomiaow]

I too am affected by the transfer of my mortgage from BOI to TMW and not happy about potential hike of nearly 60% I have taken my complaint to the Council of Mortgage Lenders who although can't complain about the commercil aspects of the transfer of business, said they were happy to lodge complaint with TMW. Not sure this will do anything but feel we all need to make some kind of stand so urge others doing this too. You can easily find contact details by googling them. I've also written to my MP, again probably not a lot he can do but might be worth as many of us as possible making some noise about this.

 

I happened to listen to Money Box today on R4 where the transfer was briefly discussed - mainly highlighting the lack of clarity in the letter sent from TMW just before Christmas to those affected with no firm indication as to when the SVR hike will take place.

 

Apparently Nationwide claim the reason the transfer was made to TMW their subsidiary company rather than directly to Nationwide was down to 'better IT systems' TMW have. Not sure I believe that one!

 

According to Ray Bolger from John Charcol who was on the programme, there may be some possibility of ex BOI mortgagers having access to Nationwides mortgage products at some point, though no mention of whether the Nationwide 3.99% SVR would be available. Again, very much based on what gets announced over next couple of months I suppose...

[St Anthony]

I too have a BOI Mortgage and received a letter from The Mortgage Works informing me that in March my mortgage repayments would in real terms increase 62.42% !!!!

 

The reply I received to my complaint from The Mortgage Works Customer Services, signed Elizabeth Saunders has a phone number for contact 01064 855634 that is a non-existent number.

 

What they are doing is a deliberate attempt to rip-us off. I am livid.

[dumpster]

The mortgage works no's are

0845 4545800

or 0800 212508 for arrears

or according to 'say no to' the std landline is 01202 560606 (they also list 01202 793129)

 

The no St Anthony shows looks like it should be 01604 which is I believe Northampton code.

 

Does anyone know if there is a dedicated website, or campaign being started anywhere. Won't do no good us all just whinging on here!!

Edited January 10, 2012 by dumpster

[mkAndyC]

ok, just getting up to speed on this and glad we're not alone. I too am absolutely livid about this and, having never missed a payment on anything to be expected to be grateful or the rate I expected "as a concession" is insulting.

 

Will check out Twitter etc to see if anything is going on this, and MP as well. Keep us all posted

[mkAndyC]

and another thing - did anyone's last payment to the BOI on their statement increase? We incurred a higher charge for the payment made in December. No-one at the BOI can explain it! Plus, having come on to the 2.99 SVR the amount taken by the mortgage works is still equal to the previous amount taken by the BOI on their fixed rate

[mkAndyC]

This on the Nationwide Press Site -

Announcing the deal, Graham Beale, Chief Executive of Nationwide, said: "This is excellent news for Nationwide and for our customers. We have acquired a high quality portfolio of low-risk mortgages with an impressive LTV ratio that brings real value to the Society.

"Our new customers can take confidence in the fact that their mortgages are now being looked after by the world's biggest building society with over 150 years experience of helping people own their home."

So - £1.1bn of low risk value to the Society, we can "take confidence" in the facts mentioned and also that we're likely to be stiffed by them if we do nothing because of TMW kind "concession". Letter to Mr Beale being written.

[FromManchester]

We hope this information could be of some value to any of the 14.000-15,000 BOI customers in the same situation.

 

Last 8th of November, as soon as we heard about our mortgage being transfer from BOI to TMW and realised that the interest rate was going to increase from 2.99% to 4.79%, we started to send letters of complain which are now leading to legal action against both Bank of Ireland and TMW. Our only hope is that Financial Omsbudsman Service will receive enough numbers of similar complains about this lucrative operation, and will therefore will take it seriously.

 

These are our steps so far:

1- Sent a letter of complain to Mike Joyce, head of UK mortgages at the Bank of Ireland saying that we are not giving consent to BOI to transfer our mortgage even if they improve the conditions (conditions are worse, obviously)

We had a letter of acknowledgement and a final letter in response from Chris Borrow, Complains management BOI who referred us to the Financial Omsbudsman Service.

 

2- Letter to Mr Paul Howard Head of Accounts at The Mortgage Works notifying that we are not providing consent for the transfer to take effect, although by no means we have the intention to stop paying the mortgage to BOI.

 

3- Sent a formal email complain to Financial Ombudsman Service followed by printed paperwork documenting the complain alongside their form which can be downloaded online. FOS require to fill the form and send it by snail mail, alongside any other documents (correspondence and letters of complain being made first). Important: You need to complain first to BOI before FOS and get the letters of acknowledgement from BOI.

 

4- We also complained to Consumer Direct, the government-funded consumer advice service but that was a waste of time.

 

The legal base of our complain (this may depend on each mortgage contract) is that section 23 of our BOI Mortgage contract is reads "Our Power to Transfer the Mortgage' in the mortgage conditions 2006 guide for England and Wales (Edition one), Bank of Ireland Mortgages, it states that the lender (BOI) may transfer the Mortgage Conditions, Offer and any separate agreements without the any further agreement from the customer (we), if the transferee (The Mortgage Works) thinks that the policy is no less favourable to the customer (we)"

 

Obviously, increasing the interest rate makes the new contract less favourable for the customer. This is probably why TMW is keeping the same interest rate at the date of the transfer and wait until March to increase it. Peter Jones, Head of Mortgages servicing of TMW UK says in his letter of December 13th, 2011 that they keep 2.99% interest (SVR charged customers) for two months 'as a concession' and that 'they will honour your current interest rate' until March. Of course, Peter Jones is a man with a great sense of humour (or whoever writes his letters). In any case, it is very obvious to anyone that the transfer did result in less favourable conditions and that BOIMortgage might be exercising abuse of power under these circumstances by not consulting customers and by ignoring section 23

 

=============

 

Whom to write?

 

==================Bank of Ireland ==================

Chirs Burrow, Complains Manager, Customer Relationship, Mortgage

email:lending.resolutions[AT]boipluk.co.uk

----

FAO Mike Joyce, Head of UK Mortgages ;

cc/ Customer Relations Mortgages Bank

Bank of Ireland

Head Office, 40 Mespil Road, Dublin 4, Ireland

 

================== The Mortgage Works==================

 

FAO Paul Howard

Head of Corporate Accounts

The Mortgage Works

Portman House

Richmond Hill

Bournemouth

Dorset

BH2 6EP

----

================== Financial Ombudsman Service==================

Search the URL in google. I can't post this message otherwise.

External Enquiries email-> complaint.info[AT]financial-ombudsman.org.uk

Financial Ombudsman Service |South Quay Plaza, 183 Marsh Wall, London, E14 9SR

T: 020 7093 5500 | Fax 020 7093 7375

 

==================Consumer Direct, ==================

 

Search the URL in google. I can't post this message otherwise.

 

===================================================

 

Note: In the first half of 2011 BOI received 295 cases of complain and Bank of Scotland 13.021

[John Hanna]

Thanks for all the information provided which is very usefull. I am one of the 14000 BOI affected customers and will be following your steps immediately. Pls keep us informed of any progress or action to be taken.

[driving70]

We too are affected by the switch, been with B.O.I since 1999, feel so let down, i wrote them a letter stating our displeasure about a month ago, all we've recieved back is a final mortgage statement, are any of you guys in the process of switching to another lender, or staying put to see if anything changes?

[Philippe]

Thanks "fromManchester" for the details on how to take action.This is great!

We will write the letters and emails as soon as possible and keep readers of this blog informed

EVERYBODY should do so for their own sake and also in the interest of having the whole 14,000 customers taking action

there is power in numbers!

[mechanic2012]

We too are affected by the switch, been with B.O.I since 1999, feel so let down, i wrote them a letter stating our displeasure about a month ago, all we've recieved back is a final mortgage statement, are any of you guys in the process of switching to another lender, or staying put to see if anything changes?

 

i have looked at switching to another lender even packages with no fee you still have to pay around £300 we are not going to switch for nothing unless you no different we should have gone to Nationwide not TMW now they will charge us to move from TMW to them if they have any good deals WIN WIN for Nationwide

[echomiaow]

Thanks FromManchester for your v helpful advice, I too have lodged complaint about this with Financial Ombudsman as well as written to TMW and Nationwide CEO.

 

I also have specifically asked Nationwide when we will be offered chance at switching to their products (Nationwide's SVR is 3.99%) as per the Money Box prog report from Ray Boulger and will also be requesting if we are allowed to switch that we aren8t charged, though cynically I would think theyd try to make even more money out of us by not waiving costs for new product!

 

I also thought it an idea to complain to Financial Services Authority about potential breach of clause 23 of BOIs mortgage terms, and on their website they have a section on Unfair Contract Terms - log onto fsa website and go to consumer information then unfair contracts. You can complete a complaint form online. You are given a ref number and requested to send all relevant docs as a follow up via email or post.

 

Worth a try I'd have thought and like others I'd urge as many affected people as possible to make as much noise as possible about this!

[driving70]

i have looked at switching to another lender even packages with no fee you still have to pay around £300 we are not going to switch for nothing unless you no different we should have gone to Nationwide not TMW now they will charge us to move from TMW to them if they have any good deals WIN WIN for Nationwide

 

Are TMR going to charge us an exit fee? because when i asked someone on the phone they said there would not be, why would it cost £300 to move?

[mechanic2012]

Are TMR going to charge us an exit fee? because when i asked someone on the phone they said there would not be, why would it cost £300 to move?

 

it will cost you £300 or more to switch to another lender,this charge will be from the new lender not exit fee from TMW. Why dont you get a quote from another lender if it has no charges what so ever let me know

[FromManchester]

More progress from our side (steps below):

- We called TMW and ask for the cost of transferring our BOI (nowTMW) mortgage out and it is £195, which is the cost of the redemption fee. The person on the phone was very polite and correct, (which makes you think that those who work for a company are not always the same as those who make their policies)

- We have now decided to move our mortgage out and we are looking for an ethical bank as any of the others are 'the same dog with a different collar'.

- We googled for an 'ethical bank' and we found a few listed on the wikipedia definition. Called one of them (don't want to give you the name in case you think we have something to do with it) and we got a couple of quotes for their mortgage products after quite a lengthy verbal questionnaire.

- Option A: The best one for us is one with variable rate (don't give you the name of the product either), which is a 2.69% above Bank of England's Base Rate (currently 0.5%) so 3.19%, which makes our mortgage less than £10 higher than what we currently pay. We must open an account with them and transfer salaries etc but we wanted to do that anyway as we do not want any further banking business with Bank of Ireland as a result. Cancellation fee is 1% for the first 3 years then zero as it is a lifetime product. Yesterday we received the mortgage conditions on the letterbox. The problem I see in the long run is if the BOE raises the Bass rate in the future (they are historically low) but this would affect any other variable rate mortgage.

- Option B: As for fixed rate options, there is another option which is 3.39% or 3.59% for the next five years. The problem is that there is a £999 initial fee (£150+£849%) which we are not willing to pay (alongside theTMW £195 mentioned above).

- A final option that we are evaluating at the minute is to put the house on the market and say bye-bye to our banking 'friends' for life (as we own 2/3rds of the estimated property value). This means that we will have to rent/let for the next few years but that's alright. So we are having a proper property evaluation next week but the mortgage.

The mortgage swap to the ethical bank (we hope they are so) is going to happen yes or yes though and then we will see from that.