Mashreq Mortgagemortgage

Review updated:

Mashreq have decided to change the terms of their loan agreement.

Join the mailing list if something similar happened to you as we will be fighting this in court:


They were changing to basis upon which interest is calculated on our mortgage from 6 month EIBOR+3% to the bank's own arbitrary rate of 7.5%. Just to give you an indication this is a rise of just nearly 2.5% in one go or a 50% rise in our rates. Mashreq say it is due to the difficult economic times.

Please see details below:

My husband is a corporate lawyer so we been lucky enough to get detailed legal advice on the terms of our Loan Agreement and have spoken to two banking lawyers with over 50 years experience between them. Each of them have categorically and unequivocally confirmed that there is nothing in our Loan Agreement that gives Mashreq the right to do this. The Loan Agreement quite clearly states that interest payments can only rise in line with EIBOR. By making a change to the basis upon which interest is calculated they are making a unilateral change to the terms of our Loan Agreement without our consent and are therefore flagrantly breaching the terms of our agreement. This all at a time when interest rates are dropping.

We have written back to Mashreq in strong terms but Mashreq stuck to their ground. We assume that because they have security cheques they will just hold these as a gun to our head. We also appreciate that raising a court action on our own will be expensive and although guaranteed success there is no provision which allows a successful party to recover costs under UAE law.

Please can anyone who is in the same position please let me have your contact details or email my husband on [protected]@HOTMAIL.COM. If we work as a group and take this matter to the press both in the UAE and the UK (the UK press will have a field day with this kind of story about Dubai just now) we will have a better chance of success. If 10 or 20 or even 30 affected parties get together and agree to raise one court action that is successful and share the legal costs it will make it very easy for all involved to challenge what is a frankly disgusting way for a major bank to behave.

I appreciate that other banks may have done this but I would remind you we have taken detailed legal advice and Mashreq are breaching our Loan Agreement. I would be surprised if nobody else is in the same position. Please spread the word amongst as many of your friends as possible so we can fight this.

I am going to start a Facebook group, please can you post this on your Faceook or Myspace pages. My husband wants to get as many affected customers together as possible and have a meeting to discuss options. He is also happy to share the legal advice we obtained.

We can't change our mortgage due to negative equity, so we have to fight this as a group. Please spread this around in whatever way you can.

Thank you so much.

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  • Be
      Jan 02, 2010

    I agree.

    +2 Votes
  • De
      Jan 02, 2010

    For the record the key clause under discussion is as follows:

    “For the avoidance of doubt, any amendment or change in the interest rate hereunder or the issuance of a new or revised repayment schedule, shall not be considered an amendment to this agreement and shall be binding on the Borrower from the date of the issue”.

    How can “an amendment” not be considered “an amendment”? This clause does not identify which party is entitled to make this amendment. Thus by Mashreq's own argument, we as the borrower could choose to amend the contract and be bound by its terms. This is ridiculous but this is what the bank is proposing.

    I am no lawyer but I do speak and read English as a first language. Even if the document legally allows Mashreq to make the change they are proposing – the product that they have offered has been mis-sold in a misleading way with a completely unreasonable clause – according to Mashreq interpretation our “agreement” can simply be changed at any time – thus it is not an agreement because it has no bounds.

    This would be illegal in any mature banking market as this clause was not made explicitly clear in any documentation. Under the newly proposed terms Mashreq could for example ‘legally’ alter the repayment schedule such that we had to repay the loan in full within one month. Is this reasonable? I think not. Do we wish to expose ourselves to a completely open ended and ambiguous mortgage agreement for the next 15-20 which can be changed “from time to time” according to the new contract? I think not.

    I hope that this case will help for this market to reach a greater level of maturity. Unfortunately it looks like we may have a bit of a struggle but it will be worth it for ourselves and to help create fair practice and rekindle the trust that is necessary between banks and customers to ensure a thriving future economy.

    +2 Votes
  • Sa
      Jan 02, 2010

    Yes .. what Mashreq is doing is outrageous.. I am one of the affected customers and I would definitely want to be a part of this fight till the end

    +1 Votes

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