NW lending code and OFT Guidelines

[Creamlily]

:beagle:I wonder if anyone out there has knowledge of Nat West's internal debt collecting procedures? I have an ongoing problem with Nat West emanating out of a business loan from 2004. I borrowed money to renovate and sell a house but, unfortunately, the builder had a car accident making the build take considerably longer than it should and then three sales in a row fell through. Nat West forced the sale of the house in question and then came after me for my personal guarantee of £50,000. The reason behind my question, though, is that I have found it enormously difficult to deal with them. At no point do they appear to have even paid lip service to the Lending Standards Board or OFT guidance on dealing with customers in financial difficulty and I cannot find anything that says that they have to or any way that sanctions can be imposed on them for failure to follow such guidelines. Even a complaint to the FoS, whilst acknowledging that NW failed me in many respects, did not result in any form of sanction. From looking at other posts on various forums it would appear that my experience with NW is not unique and this is how I think they operate and why.
Nat West are not there for the customer they are there to make money for themselves and their shareholders and to pay out bonuses, When an account is in difficulty they will assess the best way forward to maximise money for the bank in the short term. They are, therefore, not interested in exploring ways to help their customers to ensure a longer term (ultimately more profitable) solution to potentially short term financial problems in favour of maximising short term gains. In my case the house I was renovating had a massive amount of equity so, initially, they did not put pressure on me to sell but did ignore every letter I sent updating them on the issues around the build and my personal difficulties around cash flow. I tried to engage Nat West in a conversation about potential restructure of my loan to help me survive until the house sold. Clearly they did not have to restructure anything but there was not even the mearest suggestion that I was worthy of any kind of attention as their customer and, from their perspective, with a loan increasing at 2% over base daily and equity of well over £100,000, no incentive to engage with me given the amount of money I was bringing in for the bank. When the third sale fell through it was just before the Northern Rock collapse and that changed their attitude immediately ending in a forced sale at £125,000 below the valuation and pursuing me for my personal guarantee. I, therefore have more knowledge than anyone would want of their internal solicitors (Green & Co) and their truly horrible staff. I have a charging order on my house which they are going to try to enforce (and I am going to try to lift) on 23rd March.
Does anyone know what framework is in place to make banks follow OFT and LSB rules or are they just decoration? Are there sanctions for banks who don't follow them and, if so, who imposes them? Is there anyone out there who might have access to internal guidance issued to NW staff on how to deal with customer's in financial difficulty?
Any and all help gratefully received.

[andrew1]

Re: NW lending code and OFT Guidelines

I was going to post my own thread on this (and will later) but this may assist creamlily too.

When I had difficulties with Santander/Abbey I requested and received, after some hassle, their Lending Policy Document which I understand all banks have apparently. It's the holy grail of their lending policy which staff use as a guideline to providing loans and mortgages to customers.

Perhaps those more knowledgable of the internal proceedures of NatWest might be able to suggest how one goes about getting one of these which in my case relates to Mid 2007? Creamlily might like to go digging for one of these too perhaps? Any suggestions welcomed.

Andrew1

[leclerc]

Re: NW lending code and OFT Guidelines

I was going to post my own thread on this (and will later) but this may assist creamlily too.

When I had difficulties with Santander/Abbey I requested and received, after some hassle, their Lending Policy Document which I understand all banks have apparently. It's the holy grail of their lending policy which staff use as a guideline to providing loans and mortgages to customers.

Perhaps those more knowledgable of the internal proceedures of NatWest might be able to suggest how one goes about getting one of these which in my case relates to Mid 2007? Creamlily might like to go digging for one of these too perhaps? Any suggestions welcomed.

Andrew1

If I did I would have posted. In fact, I kinda only just found out earlier on that the lending code does cover personal guarantees .

[andrew1]

Re: NW lending code and OFT Guidelines

If I did I would have posted. In fact, I kinda only just found out earlier on that the lending code does cover personal guarantees .

Is that the main Banking Industry Lending Code you refer to leclerc or is that the specific NatWest one as I am relating above to with Abbey's Lending Policy Document?

I personally could really do with a copy of the NatWest Lending Policy Document as it appears Creamlily could too by the sounds of things.

[Creamlily]

Re: NW lending code and OFT Guidelines

Have just been search for lending policy document via google and have failed to come up with anything so far. Will keep on looking but it's certainly not obvious yet!

[leclerc]

Re: NW lending code and OFT Guidelines

The Lending Code itself, I was referring to.
Section 7

Guarantees for personal and micro-enterprise lending
119. Regular financial information about the person on whose behalf a guarantee/indemnity or other security is given
should always be made available to the guarantor or granters of third party security (‘granters’), so that they can
assess the likelihood of being called upon to pay, as long as permission is given and confidentiality is not breached.
120. If the guarantor or granter requests confidential financial information (with the exception of the current level of liability),
such as details of balances, copy statements, etc, the customer’s consent should first be obtained.
121. It is important that guarantors or granters receive independent legal advice to help them understand the full nature of
their commitment and the potential implications of their decision. Case law on this issue is well developed and
subscribers should encourage, as far as possible, potential guarantors or granters to take independent advice.
Subscribers may wish to go further than what is covered in this section and require a potential guarantor or granter
who refuses to take legal advice to sign a declaration to that effect. In any case, the recommendation to take
independent legal advice, and the potential consequences of their decision, should be stated clearly on all appropriate
documents that the guarantor or granter is asked to sign.
122. In relation to guarantees/indemnities, subscribers must also inform guarantors or granters that, by giving the
guarantee/indemnity or other third party security, they may have to pay instead of or as well as the customer.
Subscribers must also tell the guarantor the extent of their liability, including the addition of interest and charges after
demand has been made. When independent legal advice has been given, it may be assumed that the solicitor will
have explained the nature of all monies and continuing security, if appropriate. Depending on the nature and structure
of facilities, subscribers may choose to explain these features to those customers who have declined independent
legal advice (and should always do so when requested by any guarantor).
123. Subscribers should not take an unlimited guarantee from an individual other than to support a customer’s liabilities
under a merchant agreement. However, other forms of unlimited third party security may be taken from an individual,
provided that the limit of the granter’s liability is explained in a side letter. This is to avoid the need to take fresh
security, with the associated expense and inconvenience to customers, each time a facility changes.
124. ‘Unlimited’ applies to the capital amount of the loan and excludes interest, charges and arrears etc. An explanation of
this should be covered in the guarantee/indemnity or other security documents that the guarantor is asked to sign.
125. In the case of limited companies, which are part of the same group structure, subscribers may continue to take
unlimited guarantees from the constituent companies in support of borrowing by other companies in the group.