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Alexander (representative of the "Property118 Action Group") v West Bromwich Mortgage

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  • Alexander (representative of the "Property118 Action Group") v West Bromwich Mortgage

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    This appeal concerns the proper construction of the contractual documentation relating to a "buy to let" interest only mortgage provided to the appellant, Mr Alexander ("the Borrower"), by the respondent, West Bromwich Mortgage Company Ltd ("the Lender").

    The mortgage offer stated that the term of the mortgage would be 25 years, that the interest rate would be fixed at 6.29% until 30 June 2010 and that thereafter it would be at a variable rate of 1.99% above the Bank of England Base Rate. This type of mortgage is commonly known as a "tracker" mortgage.

    The Lender's Mortgage Conditions state that the rate of interest specified in the mortgage offer (other than a fixed rate) may be varied by the Lender. They also state that the loan may be repayable in full on the giving of one month's notice by the Lender.

    The Borrower contends that these Conditions are inconsistent with the terms of the mortgage offer and are accordingly not incorporated into the contract. The Judge held that they were not inconsistent, were incorporated and so could be relied upon by the Lender. The Borrower appeals against that decision.

    Issue 1 - Was clause 5 of the Mortgage Conditions a term of the mortgage contract?
    "For all these reasons, in my judgment clause 5 is inconsistent with the Product Description and the method of rate variation set out in specially agreed Box 4 in the Offer Document and is accordingly not incorporated. "


    Issue 2 - Was the first bullet point of clause 14 of the Mortgage Conditions a term of the mortgage contract and/or, if so, did it permit the Lender to require the Borrower to repay the Loan in full together with any accrued interest and unpaid Charges merely by giving one month's notice, and absent any default by the Borrower?


    Appeal Allowed on both issues.
    Tags: None

  • #2
    Re: Alexander (representative of the "Property118 Action Group&quot v West Bromwich Mort

    Relevant News Article - http://www.property118.com/property1...-appeal/87296/

    Today was judgement day.


    I am delighted to announce that the Appeal Judges found in our favour on both of our legal arguments. To summarise:-


    1. West Bromwich Mortgage Company were not legally entitled to vary our mortgage interest rates in the absence of a change in the Bank of England base rates which our mortgages track “to the term end”


    2. West Bromwich Mortgage Company are not entitled to call in our mortgages unless borrowers are in default

    This ruling sends a clear message to other lenders who have acted in a similar manner, and to those who might have been considering following suit. There are thought to be in the region of one million tracker buy-to-let mortgages which could have been affected in this case had gone the wrong way.

    #staysafestayhome

    Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

    Received a Court Claim? Read >>>>> First Steps

    Comment


    • #3
      Re: Alexander (representative of the "Property118 Action Group&quot v West Bromwich Mort

      Statement from West Brom -http://www.wbfi.co.uk/statement-regarding-court-of-appeal-judgement

      While we are disappointed, we accept the Court of Appeal’s decision and so will be contacting all affected borrowers, including those who were not part of this action, to advise them of the outcome and that we will be reimbursing them any additional interest charged.

      Other saving or borrowing members do not need to take any action as a result of this news.

      The one-off cost of this will be approximately £27.5m.
      #staysafestayhome

      Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

      Received a Court Claim? Read >>>>> First Steps

      Comment


      • #4
        Re: Alexander (representative of the "Property118 Action Group&quot v West Bromwich Mort

        Good one.

        Comment


        • #5
          Re: Alexander (representative of the "Property118 Action Group&quot v West Bromwich Mort

          Originally posted by express and star
          The society more than doubled the tracker mortgage interest rate it was charging 6,700 landlords back in 2013, but the Court of Appeal ruled it was wrong to do so.

          Handing down the judgment, Lord Justice Hamblin ruled that interest rates on tracker mortgages should only rise with Bank of England base rates.

          The decision overturns a High Court ruling in January last year. The West Brom said it was 'disappointed' at the Appeal Court's decision.

          The case was sparked by the West Brom's decision to raise interest rates from 1.49 per cent to 3.49 per cent on mortgage tracker borrowers who had loans with West Bromwich Mortgage Company, its now defunct specialist lending arm.

          Landlord group Property 118, headed by Norfolk property investor Mark Alexander, raised around £500,000 from 400 landlords and instructed Cotswold Barristers to take on the West Brom.

          Writing on the Property 118 website, Mr Alexander said: "This ruling sends a clear message to other lenders who have acted in a similar manner, and to those who might have been considering following suit. There are thought to be in the region of one million tracker buy-to-let mortgages which could have been affected in this case had gone the wrong way.

          "I am extremely grateful to all of the Property118 Action Group members who didn’t lose faith in our quest for justice. My win will now be automatically applied to them due to the fact they were represented by my case."
          Read more at http://www.expressandstar.com/busine...vXVlEddqP21.99
          #staysafestayhome

          Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

          Received a Court Claim? Read >>>>> First Steps

          Comment

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