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Borrowers face crunch meeting in tracker rate hike legal battle

Borrowers fighting tracker rate rises by West Bromwich Building Society and the Bank of Ireland are hosting a crucial fundraising meeting in London tomorrow.

More than 400 borrowers have signed up to class actions against the lenders but the campaign wants 400 more clients in order to keep fighting.

The campaign, led by landlord website Property118, has received counsel opinion from two banking QCs and one senior banking barrister supporting the borrowers’ case.

The West Brom action is pushing to court while the Bank of Ireland case has been struggling for clients and funds.

Campaigners are asking for £500 per loan towards funding the legal costs. 

In September, West Brom told 6,700 of its buy-to-let tracker customers their rates would increase by 2 per cent on 1 December.

Last May, BoI increased buy-to-let tracker rates by 1.75 per to 4.49 per cent above base. Residential borrowers saw rates rise to 3.99 per cent in October.

Law Department solicitor Justin Selig, who is representing the borrowers, says: “We are pressing ahead with litigation against both lenders and have called a meeting with our clients this Thursday in central London. At the meeting we will be outlining our legal strategy and advising our clients on the best way forward.

“In order for us to pursue the case we would like to recruit a further 400 or so clients.”

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Comments

There are 9 comments at the moment, we would love to hear your opinion too.

  1. Borrowers may be better off spending that £500 to simply remortgage onto better terms elsewhere.

  2. If they are not winners – then the Solicitors certainly will be!

  3. You just don’t get it – if West Brom get away with this illegal rate hike (effectively they are saying that no tracker products actually track BOE and can be changed at any time they fancy it) – then ALL lenders will see this open door and BTL (and who knows whether Residential mortgages will follow suit) products interest rates will be hiked up at will……

  4. Just try re mortgaging anywhere else at any terms let alone “better” if you are in your late 60’s. Nobody wants to know if your portfolio does not look too sharp. The irony is that many of the affected WB borrowers only went in for BTL to augment their retirement income. They can’t remortgage unless capital values improve and WB know it so their response “go remortgage if you don’t like our rate hike” is yet another example of their cynicism in believing they have borrowers over a barrel.

    And Susanne Lord is spot saying “You just don’t get it” re other lenders hovering like vultures hoping WB can win in court and setting a precedent for them to jump on this extremely nasty bandwagon.

    The remark about solicitors’ fees is contemptuous.

  5. Re “You just don’t get it – if West Brom get away with this illegal rate hike (effectively they are saying that no tracker products actually track BOE and can be changed at any time they fancy it) – then ALL lenders will see this open door and BTL (and who knows whether Residential mortgages will follow suit) products interest rates will be hiked up at will……”

    Susan what is illegal about the rate hike? It clearly has a clause for emergencies which it has invoked due to the financial meltdown. Lenders have these clauses have these clauses as part of there business continuity planning. It’s lawful, get over it.

    I bet even with the increase it is less than 2008 when interest rates were far higher. The legal argument is already won, the rate increase is in place and all you are doing is lining the pocket of a solicitor on an already lost battle.

    It’s a dead story, people are losing interest fast. If you don’t like the mortgage just remortgage else where.

  6. Rothchild, you think the legal argument is already won (by the West Brom)? Are you unable to read? Which bit of the sentence ‘The campaign…has received counsel opinion from two banking QCs and one senior banking barrister supporting the borrowers’ case’ are you incapable of understanding? You’re an idiot.

  7. Let me guess, all paid from you perhaps?

    How about an independent view where you don’t pay them and they are not going to make money from you in the future? The regulators who looked into are not supporting your case.

    Now Mark tell me if your mortgage payments are still cheaper than in 2008 and you are making savings from this?

  8. The rate hike is illegal because it was hidden away in small print. The law says (there’s a Latin name for it) that material matters like WB reserving the right to up interest rates on a whim must be contained in the letter of offer. Ofcom have just taken the mobile phone companies to task over this very issue when they tried it on. Unfortuntately there is no regulatory body who has the will or the teeth to do likewise for BTL borrowers.

  9. Simon, as Richard has stated, there is no regulatory body which has the teeth to adequately oversee the BTL market. This isn’t to say therefore that the West Brom’s action are legal. A court will decide this. Maybe we will win, maybe we will lose, but your argument is really poor and seems based on nothing more than your apparent bitterness directed towards BTL investors.

    In regards to your second point, I fail to see why it is at all relevant whether my current mortgage payments are still cheaper than they were in 2008. Are you saying that as long as I’m paying less than I was in 2008, it’s entirely at the discretion of the West Brom to set the rate as they see fit (despite selling a ‘tracker rate’ mortgage). If the BoE rate had increased and gone beyond what it was in 2008, I would now rightfully be paying more (and would have no reason to complain). But you’re essentially arguing that if rates go up, I lose, and if rates go down, I lose. What I am currently paying is totally irrelevant. What is relevant is that the West Brom sold a mortgage product which clearly stated (including most importantly on the mortgage offer) that my mortgage will track the BoE rate and give me the security of knowing that my payments will therefore alter accordingly – not whenever the West Brom decide they want to increase their profit margins.

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