| Product: |
Abbey National |
| Date: |
02/11/08 (564 review reads) |
| Rating: |
 |
Advantages: Small print terms protect Abbey from property price falls
Disadvantages: Are Abbey customers having to make up shortfalls in cash
Flexible Plus Mortgage Account holders cash grab by Abbey?
Flexible Plus Morgage account holders appear to have had their properties revalued downwards to reflect Abbeys' mass revaluation of the current market value of their properties. This appears to be done on a regional basis. So all customers with a property in a particular region may have been notified that their property has been revalued downwards by the same regional percentage.
Cash Grab?
To make up the shortfall in the drop in property prices it seems that Abbey may be able to and may now be demanding cash payments from customers based on their estimate of their customers current property value.
Small print clauses in Abbeys Flexible Plus Mortgage accounts terms and conditions appear to allow for such a revaluation. However, nothing in the terms and conditions applicable to property current market value would seem to allow a customers property value being estimated.
In Yorkshire a 9.00% plus reduction in current market property prices appears to have been arbitarily applied by Abbey. Although the Land Registry House Price Index shows a much lower house price fall in the region
As an example if a customer has a property in Yorkshire with a 90% LTV mortgage with a property worth £120,000 when the property was valued at the time the mortgage was taken out that customer may be facing a demand from Abbey of 9.00% plus in cash terms.
If any Abbey customers have more information please let everyone know of the details. This possible cash grab needs publicising.
Summary: Abbey Flexible Plus Mortgage Shock
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Last comments:
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- 03/11/08 In reply to cmh4135
I am not aware of any other mortgage products that include the facility by the leder to revalue a loan downwards after completion. I have a number of mortgages (personal and buy to let) I am not aware of any other lender having terms and conditions that allow decreasing the loan amount throughout a loan period.
cmh413 5 comment implies that this is a standard term with all lenders. Is this correct?
Any info would be useful. |
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- 02/11/08 Ultimately, a mortgage is a loan secured against your property. As such, where the value of the security falls a lender is entitled to revalue the underlying security and require the borrower to maintain a Loan to Value ratio which is at or below the level originally agreed in the loan (or the level that the LTV should have reached if all payments to date had been made). Where the market drops significantly the risk to the bank is increased and they will exercise this right. If it were any other way then mortgage rates would need to be significantly higher and would be approaching the unsecured levels that one sees on credit cards and similar unsecured borrowing. |
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- 02/11/08 i think abbey have awful customer service. They can chuck money at you one minute and demand it back the next. :O( |
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