UB changing terms on U First account before drawdown

My take on this is as follows:
Your loan offer is a contract agreed between the bank & the other parties of the mortgage.
I note the above relates to Ulster Bank. Check the general terms of conditions. Its usually a seperate booklet. If this relates to a house purchase then I imagine it states that the loan offer will be valid for 3 months. Therefore the contract should be valid for 3 months meaning you have 3 months to drawdown. The warning on the front of the loan offer stating rates can go up & down is a central bank / regulator warning and mainly refers to SVR rates can go up and down. This warning is on all their correspondence and therefore I feel does not refer to a warning that rates can be changed by the bank when they wish. They cant if its a fixed rate so this is a flawed argument. The loan offer & its conditions is valid per the term advised in the general terms & conditions.

The bank will try to bluff you and refer to this front page warning however this should be challenged and brought to the attention of your solicitor. Try to go to a solicitor rather than the Central Bank. I feel the Central Bank process is biased in favour of the banks.

Has anybody else experienced situations in which SVR linked products or fixed rates were changed prior to drawdown and within the term advised on the general terms & conditions?

makesense001 said:

They cant if its a fixed rate so this is a flawed argument.

Click to expand...

It may be a two year old thread, but you are incorrect.
the drawdown of a fixed rate mortgage is on the rate that is applicable at the time of drawdown, as stated earlier in the thread.
its in the ts&cs.

If its specifically set in the T&C well then thats fair enough. However I know for a fact that its not set in Ulster Banks T&C.

when a fixed rate is on loan offer a special condition is set that states the rate at drawdown will be the rate applicable

Ulster Bank doesnt state this. Im sure other lenders are the same.
Note: Customers should check their loan offers in detail.

I have seen a few recently and just today. And it does state it in the special conditions.

Rameire,
I have yet to see this condition. Can you quote it please and exactly where?

Hi makessense

I would imagine that the terms and conditions change over time. So it could be in Rameire's terms but not yours (although it is unlikely).

You need to ask your bank where it says that the rate may change before drawdown. If it's not there or if it's not clear, then you have grounds for complaint. The final decision would be the Ombudsman's.

Brendan

Thanks Brendan,

Yes I feel alot of customers who either a/ had their fixed rate changed or b/ had their margin on their variable based product changed prior to drawdown and still within the term (IE mortgage must be drawn down within 3 months) of their loan offer are being charged too much and due a large refund. Im not 100% sure re fixed rates but defintely re variable rate margins.

Im just surprised this hasnt raised its head in a major way yet. I know for a fact that Ulster Bank are changing rates prior to drawdown.

This is def one worth checking out,

"The fixed rate quoted shall be subject to variation prior to drawdown in accordance with any variations in the fixed rate offered by the Bank."

this is the fixed rate condition that should be on a loan offer with a fixed rate.

Thanks Ram,
Is that condition on the loan offer or general terms & conditions? I presume you have seen this on UB offers?
Condition noted re fixed rate but it really does lead to bad bank practice if the rate was changed and applied without the customers knowledge prior to drawdown.

Did you ever see any similar conditions thats relates to a margin on a variable rate products though? The same idea though relating to a variable and not fixed?
I have seen no sign of such.

sorry,
this condition is actually on the loan offer, ( this is what I meant before when I said it was in the conditions, apologies for not clearing that up before ) I am not sure if it is in the booklet.
I would have assumed that the bank would communicate with the customer to advise them of the rate change before drawdown.

as for the variable rate, the following is the condition which again is on the loan offer
"The Variable rate quoted shall be subject to variation prior to drawdown in accordance with any variations in the Flexible Variable rate offered by the Company."

once again I would assume that if the rate changed before drawdown, the customer would be advised.

This type of condition has been common for many years on fixed rate mortgages with some banks, in the past I would always advise customers that the fixed rate was not actually fixed until the day it was drawn down and could vary up until then. Customers were advised routinely if the rate changed before drawdown and given the option of sticking with the new one or picking another product. This is also the situation where sometimes the rate would go down rather than up and customers automatically got the lower rate then, it was not all one way traffic upwards over the years.

At various times over the years some banks offered the option to pay a fee to book the fixed rate offered which would guarantee it for a few months or so, different banks had different processes but it is not uncommon.

Thank You ..
Ram, are you quoting that from a UB loan offer? I have honestly never seen that.


Im not satisfied that the condition would actually cover the bank off. Obviously variable rates can go up and down (as the central bank warning states) but it does not mention that the margin on the variable rate product can be amended.

Would you believe I still don't have this issue sorted. Anybody have similar issues?

If I had a contract with a bank or anyone else, and I thought that they were trying to overcharge me on the contract i would stop paying them completely until the situation was resolved.

Realistically no bank is going to take any action against a customer based on their own biased interpretation of a contract.

At the end of the day it comes to this, the bank is in court and is asked "when is an offer at x% valid for 3 months, not valid for 3 months".

It is an unanswerable question and no bank will put themselves in that position.

The banks (and lots of other big organisations, telcos termination charges for example) rely on the fact that people are afraid of them to get away with all sorts of things.

And if people put up with this then they get what they deserve.

Hi makessense

What is there to resolve?

You have an interpretation of your contract which differs from UB. This happens from time to time.

You discuss it with the bank informally first.
If they don't resolve it to your satisfaction, then you make a formal complaint and ask for a Final Response Letter.
When you get this, you make a formal complaint to the Ombudsman who will make the final decision.

In most cases I have seen, the letters of offer were crystal clear. The rate will be the rate operational on date of drawdown. If UB has worded their letter of offer to you incorrectly, then go to the Ombudsman as soon as possible.

On the tracker mortgages, UB reject all claims even where the Ombudsman has ruled against them on the issue in question. They force the borrower to go to the Ombudsman on the grounds that they know that many of the borrowers won't bother or won't persevere. And in some cases, the Ombudsman will just make a perverse deicision in favour of UB.

I doubt that this is happening here. I suspect that you are just interpreting the material incorrectly. But if you are right and UB is in the wrong, then go for it. Please do publish the outcome here. Because if it's wrong for you, it's a systematic error on UB's part and many others could benefit.

Thank You Brendan & Cremeegg,
Actually I've been working on this issue for 24 months now and Id actually say Im a subject matter specialist on the Consumer Credit Act surrounding this issue. It does not relate to a tracker but relates to a fixed margin on their SVR. ie their U First Flexible product.
The bank have confirmed that the margin at drawdown is applied as a fixed margin over the life of the mortgage rather than the margin per the loan offer. Many loan offers are valid for 3 months (condition 13A as per general terms & conditions circa 2008). General Terms & Conditions changed sometime after this. Now Ulster Bank are saying there is nowhere on the loan offer that states the U First Flexible product tracks the SVR. It obviously does plus I located correspondence stating the product tracks the banks variable rate.

I have seen general terms & conditions booklets issued though after this date that state the margin at drawdown should apply which to some point is okay however even having said that I would question the legality of a loan offer that applies a fixed margin to a mortgage only after the mortgage has drawdown. ie the customer does not know what fixed margin is to apply until after drawdown. Though this is slightly off topic.

Back to my first paragraph - As per the banks position I know for certain that this is a systematic error. Not sure how widespread the issue is though as it would only effect customers in which the SVR changed within the 3 month valid loan offer period. But yes I will post up. It wont be with the Ombudsman for another 9-12 months though.

Does anybody have similar experiences?

Hi makes sense

This is interesting.

Would you mind telling the story in as much detail as possible in chronological order. It's hard to piece it together from the large number of posts.

I don't understand why it's taking you 12 months to go to the Ombudsman.

Brendan

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