barracad v GMAC (Early Redemption Penalty)

[barracad]

Decided to give this a go as it's a little unclear as to whether people are having any success with this. So today I've sent a prelim letter asking for my redemption penalty of £3218.13 to be refunded.

[SPROUTY]

sounds like a fantastic idea did you modify letter to mention redemption penalty specificly or just send it "as is" if modified could you post a copy.

 

One thought though, when we took out our mortgage with Gmac we were told it was part of the General Motors Union Pension Fund, bearing in mind the link between US unions and The Mafia, do you have room in your bed for a horses head (re the Godfather) if things "come to a head"?

[barracad]

Just an amended version of the prelim letter to make it relevant to redemption fees.

 

I won't post it here as it's just the basic prelim template but with a few words changed here and there so it makes sense.

[SPROUTY]

thanks barracad,

will send one off to the woolwich and keep you posted!

[feelingfine]

WELL DONE ! Barracad!

Would love to hear what they come back with?

when they sent a letter back to my solicitor they said something on the lines of the follwowing:

 

''when Mr & Mr X took our mortgage offer, it was a favourable rate (that made me laugh) around 6-ish % discounted for 1yr.

We incorperate an Early Settlement Figure built into the pricing of a product and should be veiwed in conjunction with the entire product rather than on its own.

An E.R.C therefore not only takes into account the cost of funding, but also acts as a natural hedge against the loss of future income throughout the expected term of the mortgage''

 

our barrister / solictor wrote the follwoing in reply:

 

Thankyou for your letter of xxx .

The combined effects of 3 and 9 in the conditions which you sent us show an early repayment charge will be made if the borrower defaults on the mortgage.

As this is a payment which you claim is a result of the borrower's breach of contract, then it is necessary for you to show that it is a Genuine pre-estimate of loss, rather than a penalty .

Given the amount in question, and the fact that seperate provisions are made for the recovery of your expenses, it appears that you are attempting to rely on a penalty clause, which is not enforcable in a court of law.

We would therefor be greatful if you would provide us with details of how the payment sought relates to your actual loss (if any).

As this is information you MUST already have , we expect your detailed reply within seven days.

 

 

Still waiting for a reply from the solicitor as to the cost if i were to sue?

 

Hope you get on OK

BE LUCKY!

[nona]

Hi all,

I'm finding this very interesting as I paid an early redemtion fee to Bradford and Bingley 5 years ago, This came about because i was relocaaitng and needed to move mortgage but they wouldn't give me anothe r one even though i was already with them. I am also now in a situation where i habe to pay a penalty if i move mortgage before October(3 yr tie in period) however, i think i have seen something in recent correspondence which states a redemtion charge even after the 3 year priod. This is with Platform Funding.

 

Keep us posted. I'll be watching this thread with interest

 

Good luck

Nona

[barracad]

I've just found this what I think is quite interesting

 

Office of Fair Trading Test for Excessive Redemption Charges

3. A term in a mortgage agreement which requires the borrower to pay more for breaching the contract terms than actual costs and losses caused to the lender by the breach (or a genuine pre-estimate of that) is likely to be regarded as an unfair penalty and to be unenforceable both at common law and (in a consumer mortgage) under the Unfair Terms in Consumer Contracts Regulations. A redemption charge may be regarded as a penalty even if it is expressed as the price for exercising a right rather than a consequence of breaking the agreement.

[lickthewallfatboy]

nice one Barracad-that's an excellent find and can be used in communications with lenders.It's good to have something "official" to fall back on......

[Jane Austen]

Hi Barracad

 

I sent an exploratory prelim to GMAC in June and received a fob off letter. Charges in line with Ts and Cs and the early redemption fee was built in to the pricing of our mortgage offer etc etc.

 

I am sending a more official prelim letter based on the one in the library similar to yours.

 

We were threatened with repossession at one point so I am eager to have my revenge. They make enough from their exorbitant interest charges without any extra.

 

Let's see what this brings. I'll follow your thread with interest. (That wasn't an intentional pun!)

[dolly]

I've just found this what I think is quite interesting

 

Office of Fair Trading Test for Excessive Redemption Charges

 

That is a blinding piece of information....you've done yourself proud with that one

[genesco]

This is a very interesting read, I am just completing on my mortgage, so after 2morrow I shall be sending them the first letter. Will this work with any mortgage, I had to go with kensington on an interest only mortgage because I had a ccj, I was on a discount rate for 1 year then the interest went up extortionate so I decided it would be better to paid the redemption fee, than to wait another 2 years paying interest only and pay out more money in the end. so I had to pay £9000+ redemption fee. I asked them if they could move me to a repayment with a lower interest rate and they said no.

1. Can I make a claim

2. Do I have to get a Solicitor, if I do, can I claim back the solicitors fee aswell.

3. Is there a spacific forum for this topic

[zootscoot]

Hi Genesco,

 

1. Yes you can claim - but you probably really want to know if the claim will be successful? Theoretically the charges are unlawful and should therefore be recoverable, although as of yet this is relatively untested. As you can see there are a few claims in the process at the moment.

2. You can get a solicitor - The size of your claim will take you to the county court rather than the small claims. You can claim the solicitor's fee - only if you win. If you lose you will have to pay your own solicitors plus Kensington's solicitors fees. It might be worth checkng out the no win no fee offers.

3.Specific forum? - yes you're in it! You might want to start a new thread when start your process.

 

Hope this helps

 

Zoot

[barracad]

Weird - My prelim has been returned to sender saying the address is unknown even though it is the address shown on the redemption statement, letterheaded paper, their website, and companies house.

 

Hmmmm.... :-|

[murphy55]

Hi Barracad

 

Interesting that you received your letter back. Did you send it recorded delivery?...Just wandered if you would post the address you sent it to. I have drafted my prelim letter for my redemption figures back but will hang fire if someone can post correct address.

 

Thanks. :-|

[gizmo111]

Weird - My prelim has been returned to sender saying the address is unknown even though it is the address shown on the redemption statement, letterheaded paper, their website, and companies house.

 

Hmmmm.... :-|

 

had exactly same with citicards, stuck it back in post unrecorded and it got there ok!

[Jane Austen]

Hi everyone

 

The address I sent my DPA to was:

 

GMAC Residential Funding

Communications House

Shuttleworth Mead Business Park

Blackburn Road

Padiham

BURNLEY

BB12 7SN

 

All statements came back OK. I posted my prelim to them yesterday to the same address and recorded. Let's see what happens.

[murphy55]

Hi All

 

I have typed my prelim letter but will need some guidence. I've decided to start a new thread for this Murphy Vs GMAC.

 

Any Advice Appreciated....

[Jane Austen]

Reply from my prelim received today so the address in post 16 above works.

[n01gooner]

This is my first post and I was drawn to this website by work colleagues and told it was possible to claim back bank charges. I have also paid a massive redemption penalty with our friends GMAC. Any advice on how to set the wheels in motion to claim back both my bank charges and this ridiculous redemption fee would be greatly appreciated.

[keren29]

Interesting thread. I'm with GMAC (not through choice, was fobbed off by the IFA at the time who said they were the only option as I had a paid CCJ for the princely sum of £592) and tied in for three years. It runs out next May and I am desparate to escape. If I leave now, redemption is 3% of a 105k mortgage and I've been trying to stick it out.

 

I'll keep an eye on this thread to see how it goes as if it is a victory, I might bring forward my escape plan and then go for the redemption fee to be refunded.

[njtkc]

Re: barracad v GMAC (Early Redemption Penalty)

 

read your thread and all the notes......I'm going to try aswell. They stung us for £2,518.50 in Sept 01.

[Guest willowb]

What happened barracad?

 

Wxx

[monkey_uk]

*BUMP*

 

Any news barracad?

[barracad]

No... my bad.... got completely sidetracked.

 

Need to start again I think, at least we have Zoot's fab templates now

 

Thanks for the reminder! ;-)

[FairlyNiceChap]

Barracad

 

If you are starting again can I suggest if there is any danger of this going to Fast Track etc that you at least consider CCR and Exemplary damages. This might scare them off - it could be a huge award & could set precedent. and as far as my birdbrain is concerned the comments below speak for themselves. There are also somwhere??? r eferences to Exemplary damages being appropriate to multiple claimants and where tort feasor is "fleeing from the law" - ie exactly what they are doing

 

http://www.lawcom.gov.uk/docs/lc247.pdf

 

Categories test for exemplary damages - wrongful conduct which has been calculated by the defendant to make a profit for himself which may well exceed the compensation payable to the plaintiff

 

The second difference is that exemplary damages may be awarded even though they exceed the amount of the gain made by the tortfeasor. The effective pursuit of punishment may require awards of exemplary damages to exceed the restitutionary measure: they are concerned with punishment and not simply with stripping away the fruits of the defendant’s wrongdoing. As Lord Diplock said in

Broome v Cassell,

To restrict the damages recoverable to the actual gain made by the

defendant if it exceeded the loss caused to the plaintiff, would leave a

defendant contemplating an unlawful act with the certainty that he had nothing to lose to balance against the chance that the plaintiff might never sue him or, if he did, might fail in the hazards of litigation.

 

It is only if there is a prospect that the damages may exceed the defendant’s gain that the social purpose of this category is achieved - to teach a wrong-doer that tort does not pay