ERC and my reasons advice required please

[adamski]

Hi All

 

I have done some reading and have now decided to embark on reclaiming ERC charges even though the site advcoates otherwise.

 

I will be using unfair terms and extortionate credit bargains any advice appreciated.

[frustrated46]

Please see Evan v Cherry Tree Finance Ltd 2008 EWCA Civ 33, in which an early redemption penalty was found to be unfair under UTCCR 99.

 

and Falco Finance Ltd v Gough 1999: in which the judge said that there should be no clog on the equity of redemption. This is a principle that everyone should be entitled to reply and clear a mortgage without unreasonable obstructions being put in their path; although he did point out that lender should be entitled to recover their costs arising from an early redemption (which would in any case be a lot less than what they charge).

[frustrated46]

I really believe there is a way forward here but it just hasn't been done with exactly the right combination of argument yet. I am working on it myself and intend to go forward.

 

Frustrated.

[adamski]

Excellent, thanks for that a great help.

I will sending of my first letters shortly.

[adamski]

Its a shame this has been laid to rest because of past faliures.

I guess it is now upto the individualto make up their minds on how to proceed with minimum risk

[varda]

I would also like to do something about ERC as I suffered £7300 18 months ago with Accord. But the new mortgage was with them aswell as the old one. The £7300 meant I had to take out a bigger mortgage with them and I had only 19 years left but then had to increase to 24 years. It's a disgrace and there must be something somewhere that makes this unlawful.

[credit allergy]

The problem in the past is the lack of contract breach. Therefore the penalty issue is defended. Again the UTCRR talks about disproportianiate charges but only where someone has failed to fulfil an obligation ie not paid etc.

However every stated case that we all refer to in both this and other matters has taken somebody to be brave and gone for for it. I have a large mortgage shortfall of charges and interest from a repo and everything I read makes me think that it is worth a fight. The parody is that yes people have lost but the reasons for their loss just make a victory easier to plan, because those pitfalls can be avoided.

[credit allergy]

I have just read the Cherry tree appeal case. It seems like good news and interesting that they did not appeal on the unfairness issue just whether the regs applied to this case as the banks have don in the charges saga. I need to read the orginal case and also is this decision binding. Lastly if they go for costs in a shortfall case can they claim mortgage broker commission fees and loss of profit. This is very good news it is in black and white that a Judge in Leeds found ERC to be unfair! The MODS need to be informed

[credit allergy]

I have read the Cherry Tree case which appears good news. I cannot find the orginal hearing from LEEDS so we do not know about the unfairness issue. Did the judge just say its unfair, we need to know why and what it was based upon. Is the Appeal case legally binding where does it leave the erc issue?

[credit allergy]

I cannont find the orginal case so have reached a dead end. We need to know why it was ruled unfair and deemed a penalty. The challenge is stopping mortgage companies saying it isnt a penalty but a reasonable pre estimate of costs. When the OFT delivered their views on credit card charges they stated that the charge should reflect any cost that would be recoverable in a legal damages claim. Then you start talking about actual or remote losses for instance is the commission to an indepenedent mortgage broker recoverable or a remote loss. This is why it would be helpful to find out the reasons for the unfairness ruling, but it certainly moves things forward.

[frustrated46]

Hi, apologies for being absent, I was in RL.

 

I think there are two different arguments, depending on your circumstances. If you have not breached the contract and paid on time, but just wanted to change mortgage product, the Gough case and plenty of others all say that there should not be unfair obstacles put in your way - this goes back through 150 years and more of common law rules. This is the argument I would use if I had not breached the contract.

 

Having breached the mortgage contract myself, and to avoid repossession sold quickly, I will be arguing the Evan v Cherry Tree Finance route.

 

Have already filed but I don't want to go into it too much yet, not being paranoid or anything...

 

Obviously, I am not recommending ANYONE follow this route. I don't mind being on my own on this, but will let you know what happens.

 

I find it VERY interesting that the bank in the Evan v Cherry Tree case did not appeal on the grounds that the ERC was not unfair, but that the customer was not a consumer under UCTCCR because they thought the loan was for a business.

 

Frustrated.

[spinaltap]

I wish you success in your case.

 

My situation seems much like yours. I took the ERC claim to the FOS but it was rejected on the grounds 'it is not a penalty but a charge for exercising an option'. Like you I had no choice but to sell (and pay £18000 ERC). I find the FOS logic too simplistic and I feel that they do not want to be the organisation that opens the flood gates, which is what would happen if they agreed that the ERC can be deemed to be unfair in some circumstances.

[credit allergy]

Has anyone seen the court record from the orginal Evans case. I have read the appeal but it only focuses on the appeal issue which wasnt the unfairness issue. I also find it very interesting that the unfairness point issue was not questioned in the appeal but it is difficult without seeing the orginal case. It might be that Cherry Tree thought they had a stronger case on the non consumer issue. Lastly it was a deputy High Court Judge in LEEDS in the orginal case does this mean it is case law and a stated case. Therefore can we use it as a reference point. Finally if a mortgage is redeemed but leaves a shortfall is the contract still in force. If not how can a company use the legal idemnity clause any ideas?

[spinaltap]

I have come acrosss the OFT Guidance on Unfair Terms and para 5.9 seems to have particular relevance to ERCs

 

The link is here and I would welcome comments

 

http://www.oft.gov.uk/shared_oft/reports/unfair_contract_terms/oft311.pdf

[Betty2]

I have come acrosss the OFT Guidance on Unfair Terms and para 5.9 seems to have particular relevance to ERCs

 

The link is here and I would welcome comments

 

www.oft.gov.uk/shared_oft/reports/unfair_contract_terms/oft311.pdf

 

Again, it seems to come back around to the question " who decides if the term had the effect of an unfair penalty" ?

[adamski]

OK

Its looks loike C&G are the best bet, they have sent me a letter back.

 

I redeemed the mortgage with one month left to run before the ERC would no longer apply they charged me £5000 at least in ERC, they say that because the last payment was returned unpaid they charged me the ERC they would have let it go other wise, this to me is grossly unfair I was told to cancel the direct debit and all was well, I have written a letter back saying refund me the ERC minus the last months payment I think that is fair.

 

Any advice ideas etc welcome please

[KGF]

Grateful to know how this is proceeding. Have you actually applied to have your ERC claimed back? I have the potential to do the same with SPML and its for £23k!!! So I am keen to know how far you have got and whether I can help?

[adamski]

I WON!!!!!!!!!!!!!!!!!!!

 

Today recieved a letter from C&G stating they were wrong to charge me an ERC and they are refunding the charge plus 8% interest over 4 years yesssssssssssssssssssssss

 

My best refund yet.

[northdesk]

I am currently asking Abbey National to refund me some of the Product related Charges from my 6 year fixed rate cash back mortgage , I previously lost out on getting the refund for me having to pay the cashback in full despite redeeming the mortgage after 3 years 2 months , so would have paid back half of it.

What I have also just noticed is that I have also been charged my fixed rate which was 7.45% [6% + 1.45% for cashback] , this was for a penalty period of 300 months , when the fixed rate and cash back was only for 72 months of which I had already paid 38 months. Just wandering if anybody else has had this problem and what my chances are of getting a refund

[northdesk]

does anybody agree that the following term in my contract is misleading as to regarding my cashback.

 

If on or before 31st Jan 2006 you redeem this or any subsequent mortgage you must repay the cashback to us unless you transfer the cashback loan to another property for the balance of the fixed rate period and the fee period.

 

My complaint is that it does not clearly indicate that the cashback should be paid back in full. I thought it just meant that what ever the shortfall of payments that hadnt been made to cover the cashback would be charged .I feel that to take back all of the cashback when I had paid 38 months of the 72 month fixed rate period is an unfair condition in my contract. The cashback was £2200 and my fixed rate was 6% + 1.45 = 7.45% over 6 years .

For me to get an erc of £2200 for cash back and 7.45% x 300 at balance of £35570.59 = £2178 as a fee , I feel this doesnt reflect the true cost to Abbey. I would appreciate it if anybody has a view on this to assist me with my claim.