OAKWOOD Home Loans Admin Fee Scandal

[S Anders]

I had a mortgage with GMAC which was then sold to Oakwood Homeloans. Oakwood recently sent me a letter requesting a copy of my home insurance to check I was appropriately covered, and added that there would be an annual £25 admin fee for checking this. My Mortgage advisor told me I shouldn't have to pay this as I signed the T's & C's with GMAC, not Oakwood, but Oakwood disagreed. My mortgage advisor then suggested I invoice Oakwood for the administration they asked of me, which I did, and as expected, they refused to pay. One rule for them! I know it's not much, but it's the principal. If they're asking all their customers to send them a copy of their insurance documents and charging them £25 to check it, that's a lot of extra money for probably 30 seconds work. Any ideas on how to stand up to them?

[Penfold92]

Hi,

 

The trouble is if you check GMAC's offer you will see a "own insurance" charge as well...This is a suspect charge to say the least (take it from a mortgage broker as well!) but they have got away with it for years... You can write and complain, but unless you are going for other charges I don't think you will get anywhere (unless they are feeling generous) without going to Court and for £25 that is ridiculous...

 

Sorry for not being much help on this...

 

Penfold

[kamico]

Hi,

 

I have the same problem and I am in the prossess of writing to Oakwood with a complaint. I have originally taken the mortgage with GMAC, but on the offer is says plainly that it is a £40 one off admin charge because we did not take their insurance.

 

According to the offer and contract that I have signed with GMAC, no other admin fees are due when my insurance expires. Therefore Oakwood are in breach of FSA regulations as they did not abide by the contract they have purchased form GMAC.

 

If anyone has any thoughts, please let me know.

[iconoclash]

Hi - ditto GMAC to Oakwood etc. Had a row with them re insurance - they asked for their name to be noted on the schedule which we did but they went ahead and charged us anyway - they then said it was because we didnt send them the full schedule of ins document - I have yet to find any notice of this requirement as it was all provided originally to GMAC - over a year it looks to be about £650 and no option/choices etc - not sure this is legal but will add it to my defence since they are now trying repo action!! Good luck with yours - will let you know if I find out anything further.

[Desert Orchid]

Hi thereRe the admin fee, they cannot charge if the policy is a rolling policy from year to year with no changes, especially if say you have a flat which is managed by a factor.RegardsD. Orchid

[daktadre]

well my issue wth oakwood is not the admin fee,, its actually the insurance schedule charges that they slam onto your account and even though i have written to them and told them that as the flat is in a building runned by another company that looks after its well being and building insurance and that the management office have moved and i haven't heard from them or had any new schedule they have just included the charges to my account and have charged me this month which is an extra £40!!! ontop of my monthly mortgage payments.

 

Is this legal? when they are fully aware from last insurance schedule i sent them that it is dealt with by the building management.

[angy_oakwood_customer]

As this topic comes up high in googles results for oakwood insuance fee, I thought I'd sign up and post my experiences with them. I was also previously a customer of GMAC RFC and I also get letters yearly about the 'own insurance fee'.

 

On receipt of the first letter, I sent back two responses. The first was my insurance schedule (no need to withhold that from them, it is part of the terms and conditions afterall). The second was a considered complaint letter, written after having a good read of the guidelines at the FOS

 

My letter stated that I did not accept the fee as it was not part of my terms and conditions with GMAC RFC and included a copy of the one page of the original mortgage offer that included GMAC's terms - a £40 fee, added to the mortgage at the start, to 'approve' my insurance. I finished off by stating that if they did not refund the fee I would take the matter up with the FOS.

 

A response was received a couple of days later from their complaints department, including a full copy of the GMAC-RFC Ts&Cs, and quoting two parts of it. One pertaining to the 'approval' of the mortgage being required (section 2.1c), and the other to their right to change their tarrif (section 11.4).

 

I responded to these points that a) the policy had already been 'approved' by GMAC and they shouldn't be charging a fee when there is no change to the policy other than the end date and that b) the changes to the tarrif clause in their Ts&Cs was qualified by '... to reflect the nature of the work we do' and since they were still my mortgage company, and there had been no change to their business with me, then this clause should not apply in my case.

 

I also added that the fee seemed to be anti-competitive, after having a bit of a read of this:

Competition law - the basics | OUT-LAW.COM

 

Shortly after, I received a response, this time from the insurance department (i.e. not the complaints dept) saying they had refunded the £25 own insurance fee. No apology or explanation, just a refund.

 

So, to summarise:

- don't give up after one letter

- be specific about what you're complaint is, and quote the Ts&Cs back at them

- don't expect an apology

 

I expect this will be the last time I deal with Oakwood anyway, as I've found a far better mortgage deal and I can't wait to say goodbye to them

Edited November 19, 2008 by jonni2bad

[chuggabug]

Hi, I too am an Oakwood home loans customer and they tried the same Insurance [problem] with me too. This as far as I'm concerned is an annual excuse for them to make a financial windfall into their company. Resist it at all costs and speak with someone from the FSA if Necessary.

 

I have a separate issue which i need guidance on and I would appreciate anyone's help on this matter. I started out a Gmac rfc customer too and they gave me a fixed rate of 5.49% interest on my mortgage for the first two years. On the Gmac's T & Cs it states that on January 1 2009 my mortgage then follows Gmacs standard variable rate, which at the time of taking out the mortgage in November 2006 was 6.74% which was the standard interest rate of that time.

 

In short Gmac sold my mortgage to Oakwood Home Loans and they have different T&C's. My question is that from January 2009 should my mortgage now follow Oakwood Home Loans SVR or Gmacs SVR? The question is relevent because On December the 1st before the bank Of England reduced the Interest rates by a further 1%, Gmacs Standard variable rate was 5.49% which coincidently is exactly the same as my fixed rate so I stand to make no gains in January as Gmac have refused their customers any further drops in their SVR. Oakwood Home Loans by comparison had their SVR set to 4.9% as of the 1st of December.

 

Incidently Oakwood Home Loans have sent me a letter in advance stating that my Mortgagae payments wont change as from Jan1st 2009 which assumes that they are living to the letter of Gmacs T&C's.

 

Can anyone advise me if this is legal?

[Penfold92]

Hi Chuggabug and welcome to the forums. Really you should start a thread on your own situation, but in brief Oakwood should be following GMAC's t&C and so what they have said is correct. There is no harm however in calling them up and quering the fact that the deal has ended and therefore you are now a complete customer of theirs and should therefore follow their SVR...Not sure you will get anyway, but worth a shot!

 

As a mortgage broker, I know that most of us would have got back in contact with you to ensure you never ended up on SVR anyway, so perhalps you should go back to your original broker and see if you can get something even better as unless you have no choice SVR is never the best place to be...

 

Good luck

[supersleuth]

The FSA regulations state that a mortgage lender has to treat its customers fairly. It's the TCF principle (for what its worth!!). Thus, Oakwood cannot discriminate against borrowers and charge some of its borrowers more than others. It is not a question of whose T&C's are being applied. Oakwood have taken an assignment of GMAC's contract with you. Whatever GMAC could do to you, so too can Oakwood because at law, Oakwood are deemed to be GMAC for the purposes of your T&C's.

 

The GMAC T&C state that if the mortgage is assigned/transferred, then the new lender will have the right to set the SVR. Thus, whatever rate Oakwood has set as its SVR, that is the rate that it should charge ALL its borrowers including YOU. This is in compliance with, and consistent with, your GMAC T&C's. Because, once GMAC assigned its right to set the interest rate, the GMAC SVR does not apply (but see below for the rising interest rate exception). Thus, under your GMAC T&C's and under the FSA regulations, your SVR should be 4.9% because, Oakwood have set its SVR at 4.9%.

 

To be clear and to iterate -This does not mean that your T&Cs have changed. It means that under YOUR GMAC T&C's, that GMAC have exercised its right to assign its contractual rights and powers to Oakwood. Included in the rights and powers that GMAC assigned to Oakwood, Oakwood assumed GMACs powers and rights to set and determine YOUR SVR. Oakwood have set its SVR at 4.9%. Thus whatever SVR Oakwood set, is the rate that you should be charged. Consequently, Oakwood cannot be heard to say that your contract is governed by the GMAC SVR, just because the GMAC SVRs are at the moment higher and it suits them to charge you more than their other customers.

 

If Oakwood charge you more than the 4.9%, then be sure, that Oakwood are overcharging you. These lenders cut their cloth to suit themselves all the time. When interest rates are falling they look to the GMAC rates and charge you the higher rate, but look at what happens when the interest rates were rising:-

 

The flip side to this argument. It is when the new lender wants to charge more than the GMAC SVR. When interest rates are rising, the new lenders usually overcharges its GMAC borrowers over and above the GMAC SVR. At present, I have a mortgage that charges MORE than the GMAC SVR namely, Basinghall Finance plc. My argument is: that GMAC can only assign the contractual rights that it actually possesses. As GMAC was contractually bound to charge no more than its SVR, then a new lender cannot charge MORE THAN that which GMAC could contractually charge. Which means that a new lender cannot set the interest rate to charge MORE than GMAC's SVR, but as the new lender has the right to set the interest rate, there is no reason why that interest rate cannot be set at LESS THAN the GMAC SVR.

 

The upshot is at law, you are in what's called 'privity' of contract with Oakwood. It is the GMAC T&C's that are applicable to your account. Oakwood step into the shoes of GMAC. Whatever GMAC can and cannot do under the contract now goes for Oakwood.

 

In summary, GMAC contracts that have been assigned and securitised (which your mortgage 99% likely has been securitised), are always being overcharged in one way or another. In your case you will be overcharged because the new lender looks to GMAC's SVR (which is higher) and makes you believe that that is the rate you should pay, BUT when interest rates are rising, the lender will charge you more than GMAC and tell you that the T&C's give them power and liberty to charge you over the GMAC rate. They take their cake and eat it.

 

If you've followed this, the upshot is: you are being overcharged. There is a breach of your GMAC T&C's and a breach of the FSA's treating customers fairly.

 

I've just checked the GMAC site, its SVR today is 5.75%. You truly are being overcharged to the tune of 0.85%. Fight on for the 4.9%.

Edited December 11, 2008 by supersleuth
correct typos

[chuggabug]

After reading Penfolds post I contacted the FSA by Phone and explained my situation. They are going to get someone to call me with the legal way forward sometime tomorrow. If they say I should be paying Oakwoods SVR which is lower than Gmacs then I will apply to the FSA to put this in writing to me. If in the new year Oakwood charge me Gmacs Svr and refuse to budge then maybe I will be in a position to sue them at which point I will seek legal advice. To be honest I hate these compamies as they are all in each others pockets and we the consumers are all being taken for a huge rollercoaster ride where they pocket all the cash.

 

Worse still is that Gmac are charging 3.75% over the bank of Englands interest rates. I really think this government should bring in regulations that forces all financial institutions that lend money to only charge a mimum of 1.5% over the BOE interest rates. Well thats my gripe for tonight but I will update this forum tomorrow with whatever the FSA tell me.

[chuggabug]

Superslueth was absolutely bang on in his post re: - the application of SVR's. The FSA confirmed that companies have to act in a way which is indiscriminate. From a commercial point of view a company like Oakwood can legally revert to an SVR of anther company who's contract originated from that source. However in doing so they would end up with many differant and complex contractual situations due to their wide customer base. If scrutinised by a government Ombudsman a company in this situation would cleary be seen to be a practising discriminatory policies right across its business model. Customers in this situation cleary have a legitimate argument pointing to unfairness being practiced by the company that manages its mortgage. It follows that Companies regulated by the FSA are expected to show that their business model reflects fairness to all its customers. In retrospect the FSA would take a very dim view of a companies charging its customers the SVR of another financial organisation irrespective of legal jargon within agreements. Companies are therefore expected at any given time to show that they are conforming to government legistion which regulates them.

[5020]

Hi, I too am an Oakwood home loans and I have received a letter saying the rate will be 3.99%. ( I was with Gmac before they sold it to Oakwood. I have been on a fixed rate of 5.49% interest for the first two years. On the Gmac's T & Cs it states that on January 1 2009 my mortgage will be 6.74%)

 

My question is What is the SVR for Oakwood Homeloans at the moment and how come I am 3.99%. (I am not complaining, I am just confused)

[chuggabug]

The SVR is the (standard variable Rate) that a loan company uses to charge its customers Interest on their mortgages. Like you, I too was on a fixed rate of 5.75% for two yrs ending on the 30th of December 2008. If we were still Gmac customers and assuming Interest rates hadn't fallen then we'd probably be on the 6.75% standard variable rate of interest or higher depending on what rate the bank of England were charging.

 

All said its fortunate that Gmac sold our mortgages on to Oakwood Home Loans as I believe that GMAC haven't past on interest rates reductions to their customers and its possible you'd still be on 5.75% (their SVR). In other words you would be paying the same amount of money that you were paying on the fixed rate that you've had for the last two yrs.

 

Fortunately for us Oakwood Home Loans have passed on interest rate cuts and dropped their SVR to 3.99%. This in my view betters the name and reputation of Oakwood Home Loans who to date have had a lot of bad press.

[JonCris]

I agree any lender who is trying to be fair to it's customers should be praised particularly if that lender has in the past not behaved entirely well. As for the rest who don't give a dam a pox on them

[5020]

The SVR is the (standard variable Rate) that a loan company uses to charge its customers Interest on their mortgages. Like you, I too was on a fixed rate of 5.75% for two yrs ending on the 30th of December 2008. If we were still Gmac customers and assuming Interest rates hadn't fallen then we'd probably be on the 6.75% standard variable rate of interest or higher depending on what rate the bank of England were charging.

 

All said its fortunate that Gmac sold our mortgages on to Oakwood Home Loans as I believe that GMAC haven't past on interest rates reductions to their customers and its possible you'd still be on 5.75% (their SVR). In other words you would be paying the same amount of money that you were paying on the fixed rate that you've had for the last two yrs.

 

Fortunately for us Oakwood Home Loans have passed on interest rate cuts and dropped their SVR to 3.99%. This in my view betters the name and reputation of Oakwood Home Loans who to date have had a lot of bad press.

 

 

Thanks for the reply. Its nice to know Oakwood are passing on the cuts.

[oldhound]

we have a building insurance problem with oakwood homes in 2008 we took out our own building insurance and not with oakwood but it seems we have been paying for there insurance as well as our own jan 2008 a rolling insurance with the AA. a copy of the insurance was sent to the oakwood showing there interest in the property since contacting oakwood they are now looking into this mistake why we were charged £40 lenders fee £20.19 per month insurance which we told them we did not want as we would get our own we also in march 2008 recieved a statement from them wich stated the customer has there own building insurance we were also charged a checking charge of £25

[iconoclash]

Hi - I've recently dealt with a similar problem with Oakwood. They do try very hard to make you pay their insurance instead - that way they can rake in more money yet have a huge 'blanket' policy for all customers thats cheap for them and doesnt cover you either! They also have losts of little clauses in the mortgage conditions about showing them the insurance schedule and them agreeing with it first, however, as you had informed them that you have your own cover and it was acceeptabale before, I dont see how it can be unacceptable now. I would ask them to reverse those charges (claim back the premiums and any other associated fees eg., 'customers own insurance fee = £25) and send copies to prove your continuing policy. I dont see how that can refute it. Good luck:)

[Bill_Pine]

Ive also had a request for house insurance and the 25 quid charge for "looking over the policy" joke!

 

It would help me and others if someone who has successfully reclaimed the dough to post up a letter template...

 

Like most of us, I dont mind paying house insurance but I really do object to a 25 quid charge for looking over it!

[iconoclash]

Ive also had a request for house insurance and the 25 quid charge for "looking over the policy" joke!

 

It would help me and others if someone who has successfully reclaimed the dough to post up a letter template...

 

Like most of us, I dont mind paying house insurance but I really do object to a 25 quid charge for looking over it!

Hi - I dont have a template/draft letter but if you write to Insurance Department at Oakwood and state your case, dependant on what that is, e.g: if you have your own ins. then you dont need theirs too - check your agreement. Mine was with GMAC originally and I paid the £40 at the start to have my own policy - thereafter they tried to charge me this fee but I argued it and theyve been removed. Let us know. good luck:)

[boatyboy]

I have had a look at my partners problems regarding her morgage provider called Oakwood Homeloans Ltd. I have also spent two hours reading posts on here, thank you for the terrific informative information. It therefore prompts me to add a few words regarding the considerable gall and down right arrogance displayed by Oakwood. I have learned from their statements that my hardworking professional honest lady has been charged like many of you for insurance on a flat, when insurance is clearly in place. The amount charged is £50.66 per month. A good stand alone policy would be about £200 a year. This add ups to £607.92. the good news there is none. The place is insured by the freeholder in another of the three flats. They have also charged £40.

 

Worse I have picked up a charge of £828. for solicitors costs and another £828 for legal costs. Strangely solicitors costs have been refunded. Not the legal fees ? We have no clue where these charges have come from, further we have received a letter from Oakwood with a list of their costs, none appear regarding those above, except for recovery of arrears (£100) this is not the case.

Also learned from this site is that interest from the 01/03/2009 is to be reduced to 2.99% another poster on another thread tells us that they are paying 2.49% reply 6.

http://www.consumeractiongroup.co.uk/forum/mortgage-companies/186942-oakwood-home-loans-question.html

This .5% difference may not sound much, but on a large amount is very important. However this has been posted which is very helpfull

The FSA regulations state that a mortgage lender has to treat its customers fairly. It's the TCF principle (for what its worth!!). Thus, Oakwood cannot discriminate against borrowers and charge some of its borrowers more than others. Reply 10

http://www.consumeractiongroup.co.uk/forum/mortgage-companies/146323-oakwood-home-loans-admin.html

So the letter I am putting together asking some serious questions regarding Oakwood Homeloans has been helped greatly by the information on here, so thank you all for bothering. My personal view is that the Government of the time in this case Labour should be guarding the honest working people against these pompous sharks, by proper enforceable regulations. Why are they not ?

[supersleuth]

Hi Boatyboy,

 

The government won't protect us from these sharks, because once they've served their paymasters whilst in office, they then go an collect their paychecks from the banks when they leave office - e.g. Blair working at JP Morgan.

 

Plus, the FSA, the FOS...and the courts, will not protect us either. And yet, the government apparently wants to "rebuild" confidence in the financial system. Until the government, courts and regulators actually do something substantive to root out, expose and punish these criminals, I for one will never again have any confidence in any of our institutions - they're all as corrupt as the banks.

[Fingers60]

Good news if you have a mortgage with Oakwood.

They are desperate to have their mortgages repaid.

I know a guy with a £270k mortgage and they have discounted this to £215K if he repays now.

[Frustration overload 16]

We have had a direct debit mandate with a company before it got taken over by oakwood. Since then they have taken £1500 of our hard earned money for no reason.

 

I believe that Oakwood have a Mole inside various banks such as Barclays to keep an eye on our accounts and when there is sufficient money they let oakwood know and they "grab grab grab".

 

So Anyone who finds theirselves in my position or coming to it I would strongly advise you to change your direct debit mandate to a standing order charge. This will put you in complete control over who get the money and when.

 

 

regarding oakwood home loans recent behaviour of which is highly unproffessional I am calling on all the people who want oakwood to be shown for the money grabbing theives they really are. So i call people to be part of a Multi-Party Action against Oakwood to finally take them to court. Please dont delay and contact me on :-

 

Email - ch001m4354@blueyonder.co.uk

Home Phone - 01772468814

 

 

We wish to finally put a stop to this injustice done to the people who thought that Oakwood could be trusted.

Edited July 9, 2009 by Frustration overload 16

[42man]

Just adding this here for those who may not have seen it on this thread - BBC NEWS | Business | Lender to repay 46,000 borrowers