Homeowners who have not missed a single mortgage payment could still be threatened with repossession by lenders who use an emergency clause to demand that the entire loan is repaid at short notice.
Peter and Marian Addyman, who live in St Leonards, East Sussex, received a letter this month from NatWest part of the Royal Bank of Scotland, which is majority-owned by the Government insisting that they repay a £226,000 mortgage within 30 days or face repossession.
The couple, who have never failed to make a mortgage repayment, bought their new-build five-bedroom property for £250,000 in 2004. When their initial mortgage deal expired at the beginning of the year, they took out an interest-only tracker loan at 0.04 per cent above the Bank of England base rate.
Their local MP, Michael Foster, who has twice written to the bank to request an explanation, said of the mortgage: The bank are obviously not making any money out of it but they agreed it.
The Council of Mortgage Lenders said that the clause allowing lenders to demand that a mortgage be repaid at short notice existed in the small print of almost every mortgage in Britain, although it was meant to cover only exceptional circumstances. This month a judge supported the right of lenders to repossess properties at will under a law dating back to 1925.
NatWest has refused to explain why the mortgage is being withdrawn. The case is being investigated by the Financial Ombudsman Service.
Usury, banks are always allowed to call in their loan
If you sign a contract to repay them and forget to remove that clause you are at the mercy of the bank.
Its going to be happening in 2009 pretty widespread
Henry North , London, UK
If its simply a small fine print clause that will rob the people of their equity and the courts are in agreance with the clause then expose it for what it is. Our power to fight this and not let it become a global situation comes from the knowledge we gain and how we use it, tell everyone!
P. Lemmond, London, Canada
The article doesn't seem to contain all the details however this sort of action from the banks that have been bailed out (for realists) or rescued (happy talkers) can be expected in future. I don't see why these people, who both have jobs, can't scale down their lives and rent cheaply for a while.
http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5385975.ece
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