This is how Lloyds TSB is Ripping me off (Lloyds TSB)

Member Name: Peter Titmus

Product:	Lloyds TSB
Date:	27/08/09 (40 review reads)
Rating:

Advantages: None

Disadvantages: Huge additional costs

This is what lloyds TSB is doing to me.

Since I entered into my mortgage agreement in June 2009 the cost of Euro borrowing has substantially reduced in the short, medium and long term, as all financial indices prove. Indeed from a peak in late 2008 costs have fallen rapidly [see enclosed graphs]
Why is it therefore that whilst the cost of borrowing, as also reflected in Halifax BS Euro mortgages, has also gone down in the same period, Lloyds TSB alleges that its costs for Euro borrowing have increased?
When I secured my mortgage 3 month Euribor was averaging 1.255% and 12 month Euribor 1.626%, resulting in a 'cost of funds' rate offered by the bank of 1.47%; however calculated ['cost of funds' or whatever], patently somewhere between these two parameters. Please do not tell me that 'cost of funds' is not substantially correlated with Euribor, as clearly it was when I took out the mortgage; the offer rate being 1.47% as I have stated.
I admit that unlike many British and continental banks that have a transparent policy of linking mortgage costs to Euribor, Lloyds TSB has conceived the clever concept of 'cost of funds', which potentially can only lead to deceive its customers if not properly explained.
Today 3 month Euribor averages 0.849% and 12 month Euribor averages 1.324%, which should correlate or result in a 'cost of funds' to the bank of circa. 1.1%. This is not to suggest that I agree that the 12 months borrowing rate should have any correlation with my mortgage.
The conclusion is obvious; either Lloyds TSB has substantially altered the basis of its 'cost of funds' calculation or it is attempting to recover past losses going forward, losses which predate my mortgage. Whereas my mortgage rate should now be circa 2.69%, Lloyds TSB wishes to charge me circa. 3.54% [as suggested by email] or possibly 3.84% [as posted on its website], an additional profit to the bank of 77%/105% on my reasonable estimation of its cost.
Clearly Lloyds TSB does not wish to disclose the basis of its 'cost of funds' calculation as presumably the arrangement is indefensible. If I am taking the risk of the cost of borrowing, which I am it, this should relate to the term of that risk, which is 3 months. So what has changed in relation to how Lloyds TSB compiles its 'cost of funds', as clearly something fundamentally different has occurred?
The only option is for Lloyds TSB to be transparent with regard to how it precisely calculates its 'cost of funds' both historically and going forward.
If the actual direct and unadjusted cost of borrowing Euro funds to service my mortgage has truly increased, against all evidence available in the market and from other mortgage entities in the same banking group as Lloyds TSB, then I expect to fund any reasonable increase. However, on the evidence, this cannot be the case, indeed it can only be that Lloyds TSB has manipulated the basis of its 'cost of funds' by introducing other factors that exacerbate this cost way in excess of the direct cost of it purchasing Euro in the market. If I am error in this assumption please explain why.
It is clearly in the interest of borrowers that transparency prevails and with Euribor, now at 0.849%, it is the most cost effective option.
This is a bank funded and owned by the taxpayer, which has incurred considerable losses and which needs to repair its current balance sheet. Public accountability is a key issue, as is my interest as a borrower and a shareholder.
Key Data: Agreed mortgage rate June 2009 - 3.06%, being 1.47% base cost plus 1.59% profit.
Euribor indices June 2009 - 3 month 1.255%; 12 month 1.626%

Proposed mortgage rate July 2009 - 3.86%, being 2.27% base cost plus 1.59% profit
Euribor indices 21 August 2009 - 3 month 0.849%; 12 month 1.324%

My questions are:
1. What is the basis of 'cost of funds' and how is it calculated?
2. What changes have taken place with regard to the factors that determine 'cost of funds' since 3rd June 2009?
3. Why is the mortgage rate increasing by 0.80% or 54% in real terms on the June 2009 'cost of funds' rate?
4. Does Lloyds TSB really believe that increasing my mortgage payment by over 27%, within one month of accepting the offer, is either within the spirit or indeed the letter of the Agreement?
5. Why did Lloyds TSB not advised me in June 2009 of its pending excessive rate hike, occurring one month later, which would have altered the various mortgage comparables under my consideration?
6. Why does the current rate not reflect the fall in the cost of 3 month, 12 month, 1 year and 5 year borrowing, it being 106 % higher than current indices suggest it should be?
7. How much of the current increase in rates is due to historical losses and how much is due to current cost of borrowing?
8. How much of this increase is expected to add to bottom line lending profits from Lloyds TSB mortgage book in the current and subsequent accounting periods?
9. When other mortgage providers within the Lloyds TSB Group are announcing rate falls linked to Euribor [such as the Halifax Building Society], why are Lloyds TSB rates increasing at an alarming rate?
10. Given that the fall in the market cost of Euro loans is similar to the fall in the market cost of GBP loans, why are GBP loans and presumably the GBP 'cost of funds' now less expensive?
11. Why does Lloyds TSB believe it does not have to evidence its claims for rate increases to its customers?
12. I assume that you will treat this letter as an official complaint to be resolved through every avenue open to me and that you will not simply avoid answering my reasonable questions in an attempt to possibly circumvent to my right to be treated honestly and with respect?

Summary: How a greedy bank takes advantage of its customers