No Change of Circumstance

US president, Ronald Reagan once said, “Governments view of the economy could be summed up in a few short phrases: If it moves tax it. If it keeps moving regulate it. And if it stops moving subsidise it” however, if this is indeed the economic philosophy of our politicians it is clear there is great deal of latitude in its interpretation. While in the UK recent “Pasty” tax u-turns have put to bed George Osborne’s theory, if it’s warm and it moves it should be taxed, when it comes to the banks “If it keeps moving regulate it” barely seems to have registered on the To Do list while Reagan’s “if it stops moving subsidise it” theory is not only alive and well but also firmly secured on the shoulders of the general public.

Despite tax payer funded bailouts and recession related job losses resulting in a constant stream of repossessions, for some, the economic crisis has delivered an exceptionally good few years.  Recent reports indicate a 3% decline in wages (in real terms) is the norm for most of us while, in contrast, the banking elite have enjoyed a very respectable 37% increase in their remuneration packages. Furthermore Ferdinand Mounts “ New Few”  have been basking in an exceedingly comfortable 49% increase on 2010 earnings which, for some, amounts to more than 900 times that of an average wage packet. 

Although David Cameron may wish us to believe we are all “in this together”, good sense dictates we are most definitely not. Not only has Obama’s “settlement” to rescue homeowners with underwater mortgages fallen foul of state governors discretionary powers to use these funds to prop up their deficits, in the UK, despite a government directive stately RBS must treat its distressed customers fairly, our honourable leaders quickly sold on shortfall debt arising from RBS repossessions to replenish the coffers depleted by bank bailouts.

As the gap widens between the rich and the poor and irresponsible banking continues to go unpunished and unregulated, it is only the Icelandic government who appear to have addressed the distress of the individual.  Debt forgiveness of residential mortgages over 110% of their 2008 valuations has not only played a huge part in rescuing their economy but it has saved a large proportion of their householders too. In the UK, however, while oligarchs continue to rule our politicians and reports of banking fraud regularly surfaces from within both HBOS and Lloyds, those with Bank of Scotland created mortgage shortfalls can only look forward to endless years of persecution born out regulatory lethargy.

Ferdinand Mount says, “Britain will begin to heal its divisions only when oligarchs and their opposite, the poor, are reconnected to the rest of the society, so that the first are no longer seen as uncontrollable and the second as irredeemable” but unfortunately, for the less than affluent individual, I cannot see this ever becoming a government directive because, if my own HBOS experience is anything to go by, the government along with our errant bankers have one fundamental view in common.

As far as the individual is concerned, they simply do not care.

Busy Getting Nowhere

American journalist and author Sidney J Harris once said, “The two words information and communication are often used interchangeably, but they signify quite different things. Information is giving out: communication is getting through” and while it remains abundantly clear I am still a long way off getting through to banking giants Lloyds and HBOS, I have been the recipient of a varied and plentiful supply of information from varied number of sources in the interim.

I have recently discovered,

·        Friend’s committee meetings, contrary to popular opinion, are not a forum from which to explore new ideas but instead serve purely to facilitate more of the same.

·        BT Internet Hotspots, unlike their TV advertising campaign would have you believe, can only be accessed by spending a inordinate amount of time on the phone to their overseas call centre.

·       Private landlords who substantially reduce the rent are often loath to spend money on essential structural repairs to five hundred year old properties regardless of the consequences.

·        Parliamentary Ombudsmen, despite their swift reply to my consumer complaint, have completely miss-understood the nature of my grievance in the name of efficiency.

And

·        Government guidelines along with the guidelines of the Financial Ombudsman Service for banks dealing with customers in arrears, or facing repossession are completely irrelevant when the FOS assess the merits of a formal complaint.

It appears, despite my tentative forays onto twitter and the plethora of information I have subsequently gleaned from all who have kindly responded to my posts, for those of us who remain locked in battle with the banks, it remains we still have a inordinately long way to go to successfully communicate our predicament to both the government and their banking regulators. I do, however, take some solace in the words of both American anthropologist Margaret Mead and the twelve year old Canadian girl who quoted them when she expertly explained how banks have defrauded and robbed our economy on U-Tube this week, “Never doubt that a small group of people can change the world. Indeed it is the only thing that ever has.”

I sincerely hope she is correct.

Sink or Swim

In the mid 1800’s American activist, journalist and abolitionist William Lloyd Garrison said, “You cannot possibly have a broader base for government than that which includes all the people with all their rights and with an equal power to maintain their rights.” He was speaking in support of the emancipation of slaves at the time and, although I do not pretend to claim the banking crisis is equal in abhorrence to the plight of the twelve million Africans who were sold into slavery between the sixteenth and nineteenth centuries, there are definitely parallels.

Like the slave traders, there are a number of bankers worldwide who have pursued personal gain with no regard for the pain and suffering levied on others. When those enslaved by debt could no longer afford their mortgages, often as result of austerity related job losses, these bankers threw them out of their homes along with their families without a backward glance. Having systematically asset stripped the global economy to line their own pockets, this very same fraternity has maintained an aloof detachment from the cruelty their psychopathic and narcissistic actions have had on their victims. Masterfully in denial of all culpability, they have stood by while millions of homeowners (forecasters predict twenty five million foreclosures in the US alone) had both their livelihoods and their equity removed from their grasp with a single expertly placed blow.

Shackled indefinitely to mortgage shortfalls as a direct result of bank profiteering, and bullied and beaten by the banks henchmen, the individual is also expected to pay the price of the global economic crisis. In contrast the bankers are still enjoying remunerations of up to 500 hundred times that of the national average earnings. For many of those trapped in debt sentences for life, emancipation is unimaginable and with debt forgiveness out of the question, it is little wonder there has been a 36% increase in the suicide rate. Even more staggering, this figure by far exceeds the 21% increase in suicides during the Great Depression of the 1930s.
Throughout the years of financial crisis help for those paying the consequences has definitely not been at hand. Our own government has paid little more than lip service to the much needed rescue packages promised to those experiencing mortgage distress while news of a further drop in share price for many of the “too big to fail” UK banks following the announcement of two billion dollars in losses at “too complicated to control”JP Morgan only serves to highlight how little has changed since the onset of the global recession.

While the Greeks and the Spanish struggle to reach any solution at all, newly elected French prime minister, Francoise Hollande has his task firmly in his sights when he declares, “My principal adversary has no name, it has no face, and it does not belong to a political party, it has never presented its candidature and has never been elected but it still governs. This adversary is the world of finance” but, encouraging as his words are, he too has yet to deliver.

However, in the US, it appears the tide may at last be turning.

Distressed homeowners with underwater mortgages and more than two months of arrears are to receive aid in the form of principal reduction in an effort to enable them to stay in their homes. After yearlong government negotiations the banks in question hope to avoid 850 million dollars of penalties by financing a rescue package for the individual which not only avoids the huge costs and the heartache of foreclosure, but helps those in difficulties get back on their feet. Although some would say the twenty five billion dollars set aside to implement this is still not enough and the banks have, once again, got off lightly, it is a far cry from the heartless foreclosure policies of the UK’s banking industry.

Delighted to hear our American cousins are soon to benefit from the support of a government prepared to take their errant bankers to task, I cannot help but wonder why a similar settlement has proved impossible to arrange for sufferers of negative equity mortgages here in the UK. Had this been the case when I was in the grips of repossession at the hands of HBOS, my story would have been very different to that which I tell now.

Thomas Jefferson, third president of the United States once said, “When people fear the government there is tyranny: when the government fear the people there is liberty” and hearing these words I am left wondering what outcome to expect for my family and I when, as is the case in the UK, our government fears the banks.                                                                                                               

Blame and Circumstance

Jean Paul Getty once said, “If you owe the bank one hundred dollars that’s your problem, if you owe them a hundred million dollars then that is their problem” and while a global economic recession gives rise to worldwide fretting over trillions, democracy remains the process by which the "powers that be" choose to allocate the blame.

For  Antonio Horta Osario, chief executive officer of  41% tax payer owned banking giant Lloyds, it is over enthusiastic claims management companies swamping his administrators for PPI compensation who are getting his goat. Lloyds are expected to pay out an estimated five hundred million pounds to clients to whom they have miss-sold PPI. Mr Horta Osario says one in four claims submitted by these companies are for individuals who are not eligible for compensation nor have they been customers of the bank and says this blanket approach to the claims process is not only slowing it down but costing Lloyds money. His has publically stated “ it is fraud and it must stop”. However he has not felt the need to make such strong statements about Lloyds Banking Group’s own HBOS executives, despite the knowledge several are now facing criminal charges for alleged financial crimes which have cost the indivual and the economy billions.

Defence secretary, Philip Hammond, has also chosen to point his accusing finger this week declaring he is of the opinion it is the individual who “over borrowed in the economic boom who must now admit to their part in the financial crisis”. He says the banks had to lend to someone and these people should “accept responsibility for the consequences of their own choices” rather than conveniently cast the blame on the banks.  However, when speaking of the period in which he helped formulate David Cameron’s economic strategy in opposition he says, “We started living a lifestyle both in private consumption and in public consumption which could we not afford [and it] ran away with us” so unsurprisingly it appears the governments take on the financial is what is sauce for the goose is not necessarily sauce for the gander.

In contrast, Mervyn King, Governor of the Bank of England, previously reluctant to lay the blame at anyone’s door, now tells us it is “the failure of a system” that is at fault and not the individual. Speaking of “a slow and steady recovery coming during the course of 2012” he admits the Bank of England must take a “share of the responsibility” for the financial crisis and “with benefit of hind sight should have shouted from the rooftops that a financial system had been built in which banks were too important to fail, that banks had grown too quickly and borrowed too much, and that so-called “ light-touch regulation hadn’t prevented any of this”.

It also seems HBOS auditors KPMG may well be shouldering some blame this week following reports an official investigation by the Financial Reporting Committee to investigate their conduct following HBOS whistle blower Paul Moore’s letter to the Treasury Select Committee sighting an inaccuracy in their forensic audit regarding his dismissal as global head of regulatory risk in 2005. Mr Moore was “let go” because he disagreed with the board’s attitude to risk and warned that HBOS’s lending strategy had become dangerously over heated. He believes KPMG’s decision to record this event as “a clash of personalities” was wholly misleading to the Lloyds takeover of 2008 and eventually cost the tax payer a further millions in government bailout support . Mr Moore blames the fact that, “money seems to be more important to KMPG’s strategy than integrity and professionalism”.

And

Stephen Hester, chief executive officer of 84% taxpayer own Royal Bank of Scotland is also casting the blame this week and its not, as one might expect on his predecessor Fred Goodwin who has already been stripped of his knighthood, is facing criminal charges for fraud and may well have past bonuses recalled to help fund PPI compensation. Instead Mr Hester’s eight gardeners on his 7 million pound, 350 acre Oxfordshire estate tell us rain has blighted attendance of the annual charitable opening of his twenty five acre gardens. It may not have crossed Mr Hester’s mind his infamous fight to keep his £963,000 bonus earlier this year despite a dip of 36% on its share price, a first quarter loss of 1.4 billion and further RBS job losses ,bringing the total to almost 50% of its pre- crisis work force, might well have had something to do with the public's disinterest in his garden.

Founder of the Firestone Tyre and Rubber Company, Harvey S Firestone once said, “A man with a surplus can control circumstance, but a man without a surplus is controlled by circumstance and often has no opportunity to exercise judgement”. However if this week is anything to go by, this rule seems seldom to apply and it is for this reason I live in hope that, despite a life now lived without surplus, I will have the opportunity to exercise my own judgement in my ongoing personal battle with HBOS and will, one day, enjoy a result as a consequence of public opinion insisting the banks ultimately accept the blame.

Unequal Shares

Thomas Jefferson, third president of the US, once said, “I believe that banking institutions are more dangerous to our liberties than standing armies. If [we] ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and the corporations that grow up around [the banks] will deprive the people of all property until their children wake up homeless.... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs,”  and if the 8,500 mortgage litigation cases against them are anything to go by, HBOS and Barclays are about to prove Jefferson’s words of warning  are correct.

A recent report warns banking giants Barclays and HBOS may well have to reimburse their customers for charges amounting to hundreds of millions. This is because HBOS’s and Barclays' shared appreciation mortgages, which offer an interest free capital sum in exchange for seventy-five percentage of the borrower’s equity, have harvested vast rewards for the bank at wholly excessive expense to the mortgagees. Some homes have appreciated by £300,000 in the 10 years since the loans were made meaning homeowners have had to pay more than £200,000 on loans as little as £25,000. These products were designed and targeted at low income customers who were quite often elderly and have proved doubly lucrative for the lenders because properties values were in the doldrums when many of these products were sold. This gave the banks the perfect window of opportunity to acquire a  substantial slice of an often vulnerable individual’s future equity for a minimal outlay throughout the depressed years of property growth in1990’s.

Hilary Messer of RWP solicitors is waiting for more people to come forward before she brings this proposed class action formally to the attention of HBOS, Barclays and the courts but it cannot have made it any easier for those Barclays share holders aware of this pending lawsuit to know there could be a demand for a further 850 million pounds on top of the ongoing costs of the PPI claims and the impact of the government bailouts. Neither can it help to be made aware that less than half of Barclay’s chief executive Bob Diamond’s pay packet is to be growth related. Little wonder so many shareholders were vocal in their discontent to discover Bob Diamond is to enjoy a 2.7 million bonus on top of his 1.35 million salary in addition to the 5.7 million he has already received to cover his tax bill. However, it must have been nothing short of incendiary to find Barclays staff bonuses of 2.25 billion pounds in 2011were triple the 730 million pounds paid out in dividends to share holders.

While David Cameron says the lack of economic recovery is, “very, very, disappointing” and Ed Milliband blames the present governments “catastrophic”  polices and lack of meaningful banking reform, it is clear from the actions of Barclays and HBOS they remain blissfully detached from the effect the first double dip recession we’ve had since the 1970’s and the impact it is having on the rest of us. Instead their executives continue to feather their own nests and, in the case of the Bank of Scotland, attempt to paper over the cracks with an advert created  by London-based advertising agency RKCR/Y&R and developed “to reassert traditional values”. It tells us, “You never know what is going to be round the corner, or what twists and turns life is going to take.” I beg to differ. I have always found past performance to be a reasonable indicator of what’s on the cards for the future and in the case of HBOS and Barclays it is clearly going to be more of the same. It is because of this my personal battle with LLoyds and HBOS is destined to be a long one as is, I suspect, any hope of economic recovery.

Thomas Jefferson also said, “It is error alone which needs the support of the government while truth can stand by itself” and sadly for us, it seems he’s right again.

Rainy Days and Lost Luggage

Self help writer Maya Angelou says, “You can tell a lot about a person by the way they handle rainy days, lost luggage and tangled Christmas lights” so I am pleased to disclose rainy days are a weather condition to which thirty four years of continuous parenting has not only supplied a ring side seat for many hours of wet suited, watery fun but they have also been the backdrop for numerous convivial gatherings in front of a roaring fire while inclement weather fills reservoirs in a single down pour.  Lost luggage has also been an integral part of my life and although I have not endured its inconvenience whilst in transit, five children, six grandchildren and a husband with short-term memory loss has meant I am never more than a whisper away from a panic filled enquiry as to the whereabouts of something vital. I find an un-flustered approach to the retracing of steps seldom disappoints but on the rare occasions it fails a plentiful supply of spares usually saves the day.

However, the task of tackling tangled Christmas lights could easily be a euphemism for my increasingly complicated battle with HBOS via the Financial Ombudsman’s Service. Not unlike its namesake an inordinate amount of time is required along with a steely determination and an excellent pair of glasses with which to spot the intricacies of the task at hand. With this in mind I recently allocated my first child free day since the Easter holidays for the preparation of a response to the Financial Ombudsman Services latest letter in which they claim my HBOS complaint is outside their jurisdiction on the grounds of timescale.

 I have asked my adjudicator to consider the following points;

·        HBOS have neglected to provide a full and final response to any of my letters of complaint and for this reason should not be left to decide when my six month window of opportunity to complain commences.

·        When jurisdiction issues were raised by HBOS at outset (March 2011) I was invited to respond to their argument. On 27 April 2011 I replied with my defence (which the FOS acknowledged on 5 May) and I was then invited by the FOS on 15 May to proceed with the completion and return of their complaint form.

·        In the FOS’s letter of 15 March 2012 upholding HBOS’s jurisdiction objections, no mention is made of my correspondence of 27 April 2011or my subsequent letter of 16 June 2011 in which I thank the FOS for supporting my jurisdiction appeal.

·        When the jurisdiction issue was raised once again by the FOS on 21 July 2011, I wrote on 25 July 2011 to explain I believed it had already been dealt with in my letter of 17 April 2011. No further mention was made of jurisdiction issues until 14 December 2011despite three further FOS letters to me in the meantime.

·        Stating I was unaware of the six month deadline to complain is simply not true. I was only unaware that HBOS had already started the six month clock ticking because of the ambiguous nature of their letters.

And,

·        Withdrawing eligibility to an extension of time for my future responses to the FOS gives HBOS a huge and unfair advantage over me as lone complainant.

Safe in the knowledge my five page letter will be rocking several boats before the week is out, I am left to ponder the content of another HBOS response. My additional and separate FOS complaint sights HBOS’s over valuation of my home in May 2006 as pivotal to my family’s financial down fall and entirely responsible for the shortfall arising from the forced sale of my home in April 2009.  Having already waited two months for a reply to a letter HBOS claim they have never received, I have now discovered HBOS are to enjoy an additional two months in which to formulate their reply.

Sadly I have no reason to believe I will be hearing HBOS offer me anything like the words of Bank of America Chief Executive Officer, Brian T Moynihan who recently said,

“It's time to acknowledge that our Bank isn't working anymore—not just for the market, but for people, our real customers. We've paid $8.58 billion in relief to borrowers and $3.24 billion in fines. We face lawsuits and claims from citizens, companies, and state and local governments. There is even a petition with the Federal Reserve to break up our bank, adding yet more uncertainty to our position. Finally, we've found ourselves front-and-centre in the national foreclosure crisis, and deep in unpopular investments like coal, at a time when climate change is a growing societal concern.”

Instead, I am in no doubt that despite damning FSA reports, HBOS will be making no confessions nor will they have plans to shelter the individual from the economic down pour their actions have caused.  In contrast I suspect many of us will be losing much more than our luggage as a direct result of their “terrible corporate governance” and it will not only be me left untangling far in  excess of a few Christmas lights this year. It will be business as usual for HBOS as there is no incentive for them to behave otherwise and the Financial Ombudsman’s Service will remain characteristically ineffective in the wake of the ever increasing demand for justice through a complaints process that constantly creaks in protest to the unprecedented rise in the number of complaints.

Maya Angelou also said, “There is no greater agony than bearing an untold story”... [and while]... “I can be changed by it I refuse to be reduced by it.” I am pleased to report that regardless of the rain, the lost luggage and the tangled Christmas lights, these remain my sentiments precisely!

Capitalism and Punishment

Winston Churchill once said, “The inherent vice of capitalism is the unequal sharing of blessings: the inherent virtue of socialism is the equal sharing of miseries” and, despite more than a fifty year interval, capitalist principals continue to force feed financial misery to the masses while our corporate and banking elite remain free to enjoy, and retain, the blessings of bailouts, rescue packages and sweet heart tax deals designed exclusively for their benefit. 
 
One might have thought embracing capitalism would provide the freedom to fail as well as the freedom to suceed but it appears the favoured few have remained remarkably unhampered by their failures and their bad decisions have instead achieved freedom from consequence via the government supported socialising of their losses.  In contrast I, not unlike the banks, but an individual with an unrecoverable deficit void of asset backing, continue to be on the receiving end of a “holier than thou” attitude towards a hand I have been dealt as a direct result of flawed banking risk management policies which saw many of the world’s largest banks run out of money in 2008.

Since then, with only the aid a few charitable hours of CAB time and the help of my trusty friend Christine, I have endeavoured to explain my impoverished circumstances to all our creditors. I have explained over and over again my husband’s vulnerable state of mind has resulted in a low paid job which leaves us nothing to offer towards the repayment of our million pound deficit and repeatedly described the enormous strain constant requests for money have had on our health, our marriage and our children’s family life. Our creditors should be in no doubt that their balances are unrecoverable, not least, because each and every letter has been supported with both financial and medical evidence.

For the past three and a half years I have borne the anxiety of our ordeals alone. I have done this in the knowledge that suicide was never far from my husband’s mind when the burden was his.  Compelled to do everything within my power to prevent my youngest three children enduring the loss of a father in an identical manner to that which their older sisters suffered more than twenty years ago I have, inch by inch, with the help of family, friends and nothing short of huge personal resolve, pieced together a modest lifestyle and a supportive family environment against all the odds.

Year in and year out I have dutifully and covertly prepared financial statements and medical reports for our creditor’s perusal far from sight of my husband’s glancing eye. With each creditors update I always enclose an appeal for a compassionate write off in the light of our unchanged circumstances. This year, however, there has been one fundamental difference to the content of this message of misery because, to my immense joy, not to mention unbridled relief, our most recent medical report states my husband is no longer contemplating taking his own life.

But,

Despite the obvious benefits of this news to me and my children, the Financial Ombudsman’s Service now tell me it is precisely because of the improvement in my husband’s health that Lloyds TSB are now unwilling to consider debt forgiveness at all. After three long years of living with the fear of an intolerable outcome, I am now told Lloyds TSB are looking for a less uplifting change in my husband’s health to be able to reconsidered my family and I for a share in the blessings that came only their way in recent years and not mine.

Unlike Lloyds TSB’s own chief executive, Antonio Horta Osorio, it appears I am destined to enjoy no respite from debt fighting stress. There will be no government bailouts for me nor will there be time off to catch up on my disturbed and troubled sleep. It appears the only hope of freedom from the misery of capitalism’s failures for me is in the unpalatable event of my husband’s demise.

American philosopher Henry David Thoreau once said, “The price of anything is the amount of life you are prepared to exchange for it”, and I was recently shocked to hear that in China a seventeen year old boy’s kidney was the going rate of exchange for an ipad and an iphone.  I am, however, nothing short of astounded to discover that in the UK, the going rate of exchange for £25,000 of unsecured Lloyds credit card debt is no less than the life of a forty six year old family man. Sadly, I cannot see any amount of tightening of the regulatory screws will ever address this.