Spanish practices?

The credit crunch is crunching quite well for some people! By that I mean they are getting the frights from frightful bankers. You'd think some coroporate types would engage their brains before pushing the button on the computer so that the machine could spew out another unread missive?

Abbey National is not what it seems to most. It is now a Spanish owned bank. By Santander to be precise. They want to keep their coffers sound in 2009. Now I don't blame them for that. What I do say is that it is underhand to be sending out letters warning customers of the impact of lower house prices on their mortgage contracts, by alluding to a clause in the contract. A clause that was so far down the small print that nobody thought fit to mention it in the first place!!

A spokeswoman for Abbey has reassured customers the bank had "not invoked this particular clause" and had "no current intention to". "What we would say though, is that in a falling house price environment, it is prudent for people on flexible deals who find themselves at over 90% LTV [loan-to-value ratio] to look at whether they can afford to make any overpayments," she said. "If they can pay off some capital to bring their LTV down, we would encourage them to do so."

So this is a way of getting hard-pressed people to cough up extra cash at a very hard time. Here's how one couple felt about the shocking news!

Posted in: Abbey Bank,banks,credit crunch