Good Morning,

I'm seeking some advice/direction from you for my mother following my fathers death in 2014. Her mortgage started in 2002 and was called a Natwest Foundations Mortgage, it was effectively an arranged credit line that allowed you to borrow up to the value of the property and pay off extra amounts when suited. Natwest withdrew this product and started locking peoples money in, there was widespread complaint online about this. At this time from research, many customers moved to other products offered by the bank however my father insisted he was staying on the product. Still to this day that mortgage is in place, it reached the 14 year term in 2015 and has rolled on a SVR extension for 3.5 years...

I have drafted for my mother with her consent, the issues that she has with her mortgage. Some advice and direction would be greatly appreciated.

Issue 1 - Natwest Payment Protector sold as Life Insurance with Mortgage

Foundations Mortgage Account taken in 2002 – This was done 100% at home by an Natwest advisor called XXXXXX XXXXX. We have hand written letters that were included in the SAR that show this. Natwest say that they have no records to indicate he ever worked within the company. I feel this is crucial to my complaint as XXXXX XXXXX completed the mortgage with myself and husband at home and advised us on everything. We were advised we had to take a life insurance product called ‘Natwest Payment Protector’ in order for the mortgage to go ahead.

From the beginning of the mortgage up until my husband’s death in July 2014, we were led to believe that the Natwest Payment Protector was Life Insurance on the house. It is proven that this is what we believed as when my husband had his first heart attack in May 2008, he contacted Natwest to try and freeze the account. At no point did he use the Natwest Payment Protector whilst sick, which is apparently what it was for! We both were led to believe this was Life Insurance. At this point, I am upset that Natwest did not inform us what this product actually did - If they had, it would have covered the payments whilst he was sick and also would have made us aware of the product they had mis-sold at a time when we could have done something about it. This has had a huge financial effect on myself.

Natwest have produced after many letters to the bank, a document with my husbands signature agreeing to the costs and benefit of the NatWest Payment Protector… This was not signed by myself nor do I believe my husband signed this understanding what it was he was signing – I stress, the Natwest advisor forcibly made us take this product as part of the ‘deal’ and this product was ‘Life Insurance.’

Issue 2 - Failing to supply information under SAR

My initial SAR request was handled carelessly and was to say the least, incomplete. It was missing huge amounts of information and the majority of what was sent was not legible.

I complained about this and specifically requested it to be resent as well as information pertinent to the mortgage to be sent. Following this second request – there is still clearly information missing.

Issue 3 - The original mortgage agreement/contract and terms and conditions

Despite two subject access requests being submitted a Natwest complaints handler has informed me that – quote ‘A further search has been completed by the Mortgage Operations Centre and they have been unable to locate a copy of your original mortgage offer’. I find this un-acceptable and ask on what grounds this mortgage is enforceable under the CCA between 2006 and 2016?

Further to this, despite two subject access requests and specifically asking via letter to the Chief Exec’s office on more than one occasion Natwest have failed to supply the original ‘Terms & Conditions’ of the mortgage. Nor have I been supplied a reason as to why these are not available. In fact, since asking for this information shortly after my husband passed away in July 2014 I have not seen any paperwork produced by Natwest that form an ‘agreed mortgage contract’ nor an ‘agreed credit arrangement’.

Issue 4 - Status of mortgage agreement during the years 2002 to 2018 leading to issues surrounding compliance of the CCA in 2006 and FCA Regulations at the ‘supposed’ end of term.

My understanding from recent research is that this mortgage is a pre-2004 First Charge Mortgage that was unregulated when put in to place in 2002.

2002 – 2006 Between these years the mortgage should have complied with the CCA, however from research it seems like the £25,000 barrier stops this from being required… In the Natwest supplied SAR upon opening the loan, I find it very convenient that there is a column entitled CCA (Consumer Credit Act) – marked with ‘NO’. I would like this explained to me as the bank deemed this important information to record however I was never informed of a regulatory body nor law that would be/become important… Is this a fair relationship?

2006-2016 Between these years the CCA was amended significantly and as this loan is a pre-2004 first charge mortgage, from my understanding it was subject to compliance with the CCA between 30th March 2006 and 21st March 2016 when the mortgage becomes regulated by the FCA – see PS17/6. During this period, several compliance failings occurred however two of which I feel are significantly important:

Failure to send NOSIA – At no point was a specified notice of sums in arrears sent, by trawling through statements I can see that this should have happened several times. The first of which took within the 2006 onwards period is May 2008. Failure to do this would make the agreement 'unenforceable' until notice is given.

Failure to send Annual Statements – None sent. Failure to do this would make the agreement 'unenforceable' until notice is given.

During this period of time, my husband had passed away and I was completely unaware that the bank had these obligations to me. Further to this, I made several complaints via telephone and in branch as I didn’t even have access to my mortgage account online. Furthermore – I still don’t have access to this online now! (August 2018)

Issue 5 - Product Extension Concerns

June 2015 – August 2018 (Taking into account FCA Regulations enforced on 21st March 2016)

It is my understanding that the verbally agreed extensions following the ‘supposed’ end of term mortgage are subject to the rules and regulations of the FCA now. This loan extension and all monies paid on this ‘extension’ should have been a ‘Regulated Mortgage Contract’ and there should be certain paperwork in place, such as a Loan Contract, Terms & Conditions, Key Facts, Annual Statements etc. There have been serious failings by the bank to comply with FCA regulations during this period.

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Thank you for any advice and direction in advance.

Hi and Welcome to CAG

Most mortgages were unregulated and not covered by the CCA1974

MCOB applies to regulated mortgage contracts

Some useful links :-

http://www.slaughterandmay.com/media/760154/consumer_credit_act_2006_amendments_to_the_consumer_credit_act_1974.pdf

https://www.theguardian.com/money/2009/jun/28/natwest-mortgage-insurance

https://www.theguardian.com/money/2012/may/05/homebuyers-shun-mortgage-protection

https://www.handbook.fca.org.uk/handbook/MCOB/1/6.html

http://www.thisismoney.co.uk/money/mortgageshome/article-1593906/Loophole-puts-borrowers-at-risk.html

I cant find any information with regards Natwest Payment Protector sold as Life Insurance with Mortgage...the product was withdrawn...apart from one version sold to sole traders (Business)

Regards

Andy

Thanks for your response Andy.

I can see that the mortgage was un-regulated in 2002 when taken out. However, in 2006 with the amendments to the CCA - does this at that point apply to this mortgage? Or only new mortgages from that date?

Best Wishes,

Joe

No....I dont think it was retrospective.

In November 2015 the Government made legislation which means the administration of and other activities relating to pre-2004 first charge CCA mortgages will become regulated mortgage activities from 21 March 2016. Mortgage regulation under the Financial Services andMarkets Act 2000 (FSMA) began on 31 October 2004.

Mortgages entered into before that date are regulated under the CCA and CONC, provided that they did not exceed the financial

threshold in place when they were entered into. This threshold was:

• £25,000 between 1 May 1998 and 31 October 2004

• £15,000 between 20 May 1985 and 1 May 1998

• £5,000 before 20 May 1985

The legislation will mean that the CCA will no longer generally apply to these loans. In CP15/36 we consulted on applying our existing mortgage regime to these loans in the same way as it applies to firms in relation to other regulated mortgage contracts, with some limited modifications or exceptions.

Thanks Andy,

So I am correct that from 21st March 2016, were bound by the rules of the FCA's MCOBS for this existing mortgage?

Surely before this date they must have had some kind of law/act that covered at least some of their responsibilities?

What do you make of the fact they cannot find the original mortgage offer or terms and conditions?

Thanks Again

Your initial post is quite intensive and covering 3 main concerns.....

Mortgage protection policy

Data protection

Mortgage agreement (Unregulated) unfairness.

As regards to them not being able to find the offer or the agreement and T&Cs...well the same could be said of yourself.....I have copies of every mortgage I have entered into in my files.

What do you wish to achieve and what is your main requirement. Simplify your complaint and deal with one issue per stage.

Andy

Well, this is it! What is my best route of attack with this. Realistically my mother feels that the ppi policy masked as life insurance should have relinquished her mortgage...

Secondly, the mortgage agreement itself - it doesn't strike me that it is fair.

Joe

Then the MPPI is the priority and you should report this to the FOS/FCA

As for the agreement...I assume a 25 years agreement...whether its fair or unfair its irrelevant to your problem.?

Andy

Hi Andy,

Sorry for not coming back to you sooner. We battle on.

This was an unusual product and the bank started 'buying people' out of their mortgages and moving them to different products... Screams alarm bells to me. I have found the original T&C of this mortgage - would you be able to look at this and see if there is anything we can use in this fight?

Foundations Terms & Conditions.pdf

Have you sent a D SAR to NW to see what data they hold in connection to this Mortgage ?

May be of interest re Mortgage Regulation pre MCOBS

https://www.cml.org.uk/policy/policy-updates/all/the-evolution-of-mortgage-regulation/