Abbey in Mortgage Warning

[Olf]

http://news.bbc.co.uk/1/hi/business/7781043.stm

This was predicted in P&P some time ago with some people saying 'they wouldn't dare' and others saying ' don't count on it'. Looks like it's moving closer. It's not going to be a happy morning the day that letter arrives...

[Maxf]

Santander are also cutting 1200 uk jobs at the start of next year.

ETA - I think I was one of the ones who said they wouldnt do this for residential customers. Happy to admit I was wrong, although the flexible mortgages arent exactly your common or garden mortgage.

Edited by Maxf on Saturday 13th December 10:19

[groucho]

Is B & B going to go bust again. I rescued my money just in time out of Icesave.

[Yugguy]

Beeb news said Abbey said they would not be enforcing it at this time.

[Olf]

Maxf said:

Santander are also cutting 1200 uk jobs at the start of next year.

ETA - I think I was one of the ones who said they wouldnt do this for residential customers. Happy to admit I was wrong, although the flexible mortgages arent exactly your common or garden mortgage.

Edited by Maxf on Saturday 13th December 10:19

Thin end of the wedge if you ask me. Flexible mortgage customers are arguably the ones you would pick on first because if you're offsetting your mortgage what would you do if your mortgage interest rate had fallen through the floor? Take the money and bung it into the highest interest product on the market. For Abbey that could mean people taking thousands of pounds out of their flexible mortgage which might be as low as 2.5% at the moment and banging it fee free into Abbey's Instant Access Saver at 4.5%.

[astroarcadia]

Yugguy said:

Beeb news said Abbey said they would not be enforcing it at this time.

.......but would not rule it out in the future.

[Balmoral Green]

If you have a car loan, that too is secured on a depreciating asset. The lender doesn't care about that as long as you keep your payments up, so why should they on a mortgage. If you start to miss payments, then fair enough. I'm not surprised they aren't going to act on this though, if someone is managing to pay, asking for more money from them may just tip over the edge someone who is managing, just.

[Olf]

Yugguy said:

Beeb news said Abbey said they would not be enforcing it at this time.

At this time... That doesn't give you a warm feeling does it?

[Olf]

Balmoral Green said:

If you have a car loan, that too is secured on a depreciating asset. The lender doesn't care about that as long as you keep your payments up, so why should they on a mortgage. If you start to miss payments, then fair enough. I'm not surprised they aren't going to act on this though, if someone is managing to pay, asking for more money from them may just tip over the edge someone who is managing, just.

Could be because we're not all driving around in 250k cars.

[Balmoral Green]

Olf said:

Could be because we're not all driving around in 250k cars.

Point taken, but in principle it is similar, and in percentage terms, a car loses far more than a house, and monthly repayments can be mortgage sized.

[Olf]

swerni said:

But it's a standard condition on a flexible mortgage.

I've had offsets for years and that clause has always been there.
It's not hidden away either, on my latest with HSBC it's on the summary sheets.

Don't really see what people have to complain about.

You're sooo cool and well informed. You should post on here more regularly.

[smack]

For a BTL, I expect it as it is a business loan.
But would be suprised if they margin call a personal mortgage on a residence. That would get the Sun and Daily Mail ranting and raving.

[G Brown]

Balmoral Green said:

If you have a car loan, that too is secured on a depreciating asset. The lender doesn't care about that as long as you keep your payments up, so why should they on a mortgage.

I'm guessing it costs more for them to fund it if the average house in their portfolio has high LTV.

[Road Pest]

offset or flexible mortgages are for cash rich. Therefore I can see why the Abbey would do this as it targets the people who are most likely to be able to overpay or pay off a lump sum.

Also it reminds people who were thinking of taking money out of the reserve that it might not be there to take. I'm with Swerni on this one.

[jimmyb]

Road Pest said:

offset or flexible mortgages are for cash rich. Therefore I can see why the Abbey would do this as it targets the people who are most likely to be able to overpay or pay off a lump sum.

Also it reminds people who were thinking of taking money out of the reserve that it might not be there to take. I'm with Swerni on this one.

+1

Cant see them actually just deciding to demand money back as it would be a massive PR no no and may get the politicians involved though banks dont seem overly concerned with what the politicians have to say.


It is merely a warning shot at all the people thinking of taking money out and a way of raising capital from those who can afford to repay the balance early.

[robm3]

It gets worse for Abbey mortgage holders on a tracker too (I'm one) they have a clause that says they can adjust their uplift on BOE rate when it drops below 3.5%

Which means although I currently pay 1% above Bank of England rate, because that rate has dropped below 3.5% they can now increase my uplift e.g. to 2 or 3 percent above BOE. And here's the kicker, if the BOE rate then goes up again, Abbey can keep the increase!!

[CzechItOut]

In the video it says they were unable to draw down extra funds for home improvements and then shows a plug socket that isn't attached to the wall. Is this bloke unable to use a fking screw-driver?

[Balmoral Green]

The film crew would have done things like that, they would have set the place up a bit, then put stuff back as it was afterwards, guarantee it.

You don't really think all pensioners have a tartan rug and an old one bar electric fire for the million pound gas bill stories do you?

[Soovy]

It was me that pointed this out three months ago and got shouted down.

These letters are being sent out to tens of thousands of people right now.

Further letters will be going to BTL mortgagees who will be expected to inject cash sums into their mortgages within 14 days to make their equity up to the preagreed level.

A lesson here, READ contracts BEFORE you sign them. Then you don't get a surprise, see?

[Balmoral Green]

Fair enough Soov, but I would wager that even having read the contract and that particular clause, most would have still signed it anyway.