Northern Rock Together Mortgage - Has anyone challenged?

[freemydebt]

Hello,

 

I am seeking advice on a together mortgage that I took out in 2005. I have been fortunate enough to have recently sold my property but the sale price falls short of the combined secured and unsecured part of the NR together mortgage. The two options I have is that :

 

1. I only repay the secured amount to NR and come out with about £10k. This however will leave me with a £25k unsecured loan with NR upping the APR rate by 6%.

 

2. I repay the secured amount plus 10k towards the unsecured sum. This then leaves me with a £15k unsecured loan with NR upping the APR rate by 6%.

 

I am considering option 1 and then I'll maybe try to challenge NR over the legality of the unsecured loan amount, on the grounds of reckless lending. Failing that I'll be considering either bankruptsy or IVA (which are both last resorts).

 

Has anyone else been in a similar position to me and what was the outcome?

 

Thanks

 

The simple reason for selling is that we cannot afford to buy a bigger property (1 bed flat not good for a family of 3) so we will be renting for a while.

[Redfish]

It sounds like you have a 'multiple agreement'. Check it out, what I gather is that if your unsecured part of the loan is less than £25,000 then it is covered by the Consumer Credit Act which requires each 'part' of the agreement to have its own prescribed terms and signatures. It may be when you look at your original agreement that the lender did not set it out this way and therefore it may render the agreement (at least the unsecured part, but maybe also both parts) unenforceable.

 

Read up on multiple agreements on this site - in the Act you are looking at section 18.

 

If you don't have a copy of your original agreement to hand you should do an SAR to your lender to get everything they have on you. That takes 40 calendar days - then you can establish if the agreement is enforceable or not.

[freemydebt]

Thank you.

[zander]

The unsecured part of the loan did come seperate from the secured. It had it's own t&c's of which you should have a copy.

[freemydebt]

It does have it's own contract, but the original amount was for more than £25k therefore the CCA1974 not being much help?. Any ideas?

[thirty-n-fat]

It does have it's own contract, but the original amount was for more than £25k therefore the CCA1974 not being much help?. Any ideas?

 

I am also interested to know this!

[confusedofea]

Dear all

 

I am also a NR Together person. However, my husband walked out a year ago and left me with debt which made me unable to do anything else apart from go bankrupt (a last option believe me - but if anyone wants to ask me about it please do). The loan portion of the mortgage, as it was classified as unsecured, was approved and listed in my petition of bankruptcy. I am now discharged from the bankruptcy and believed that as the loan part of the mortgage, being stated as unsecured, was in my bankruptcy, I would have been comitting fraud if I paid anything towards it. And now I am discharged, I believed that I was not responsible for any debt named in the petition apart from the secured part of the mortgage. This was the belief of both a financial adviser, solicitor and official receiver handling my case.

 

My ex had been paying the loan for the last year whilst I paid the full mortgage and all bills. Now he wants out of the mortgage. I met with Northern Rock today, they seem to say that I am still liable for the 'unsecured' loan on the house, however, as above, I believe that if I paid anything towards this I would be commiting fraud. Can anyone clarify what is correct considering my situation?

 

How can they claim an 'unsecured' if actually it is secured on the mortgage? Surely this is a false discription of the loan? Can anyone shed light on this?

 

Many thanks anyone who can offer any enlightenment.

[thirty-n-fat]

As an update, I have spoken to a financial advisor who claims to know of a company who have been able to clare this debt using the unenforceableroute. I am obivously on guard but it is worth finding out more on this and I will keep all updated with anything I find out.

[Mike J 1973]

As an update, I have spoken to a financial advisor who claims to know of a company who have been able to clare this debt using the unenforceableroute. I am obivously on guard but it is worth finding out more on this and I will keep all updated with anything I find out.

 

Have you found out any more as I have just the unsecured loan as I have moved the mortgage element and I am getting hammered for interest!

[JLGee80]

If anyone could provide some advice on this it would be appreciated.

I am in a similar position with a 24,500 unsecured loan with NR which is left over from the delinked mortgage agreement.

 

I pay £263 p/month on it with 31 years remaining!!!! At an interest rate of 12.79% as it is de linked.

 

My figures are 31 years at £263p/m = £97836!! to pay.

 

I believe my options are to either refinance (very difficult in current climate espacially at that amount) or go down the bankrupty/IVA route.

 

Could really do with some sound advice.

 

Thanks in advance

Jason.

[ZillaK]

..for those in situations where the unsecured element is is lower than £25,000:

 

..start negotiating with NR for a reduction in interest.. begin by asking for them to freeze your interest at 0% so that your indebtedness does not increase further and also so that all monies paid are directed to reducing the capital owed.. you can also mention that the only alternative available is bankruptcy..

 

.. if that doesn't get some results then there is also the option of applying to the courts for a time order which can achieve the same result.. get some proper advice on pleading your argument though..

 

see sections 129, 130, 136 of CCA1974 for more info..

 

I'd never go down the IVA route Jason, but that's just my personal opinion on the matter.. it may suit someone.. somewhere..

 

Zilla

[JLGee80]

Hi Zilla

 

Many thanks for the response.

 

I will indeed try those routes.

 

Freezing the interest rate would be ideal as I have no issue with paying the money i borrowed with the mortgage i just dont seem to be shifting the debt at that interest rate.

 

I have been paying this inflated rate without shifting any capital at well over a year, i was wondering if retrospectivly freezing the interest rate to the date it was increased to a very high level would be an option?

 

Thus using the payments made to date to take away from the capital??

 

Is this heard of or am i clutching at straws

 

Thanks again

 

Jason.

[ZillaK]

..don't have a scooby about that question..

 

..but worth searching around to read about cases with successful outcomes.. might give you some ideas about how to approach it all..

[rennuz]

I am in a similar position, toyed wth going into a debt management plan for over a year.... anyway took the plunge simply becasue I had £30k outstanding with N.Rock at £339 per month I would have paid over£110k off at the end of the term. My interest rate jumped to 12.9% like above, effectively this loan tipped me over the edge and in a way I am glad it did.

 

Although N.Rock will accept my reduced payments of £81 per month they have said they will keep adding interest to the loan, spoke to them on the phone but I have had no joy, when I asked the question 'you add £320 interest every month and I am paying £81 per month' that means in 12 mths I will owe and extra £2900 and every year this will increase, there is no point in my paying anything, its a fruitless task' they said they can't do anything about it.

 

CCCS who do my debt man plan have said just hold off as after a while they will prob send it to a debt collection agency and they are likely to buy it for a lot cheaper, well who knows its early days and in terms of the legal routes they can take they are not going to get much joy out of doing anything there. I am thinking aftelling debt agency to reduce payments as I feel te £81 is pointless. I will keep you informed.

[Mike J 1973]

..for those in situations where the unsecured element is is lower than £25,000:

 

..start negotiating with NR for a reduction in interest.. begin by asking for them to freeze your interest at 0% so that your indebtedness does not increase further and also so that all monies paid are directed to reducing the capital owed.. you can also mention that the only alternative available is bankruptcy..

 

.. if that doesn't get some results then there is also the option of applying to the courts for a time order which can achieve the same result.. get some proper advice on pleading your argument though..

 

see sections 129, 130, 136 of CCA1974 for more info..

 

I'd never go down the IVA route Jason, but that's just my personal opinion on the matter.. it may suit someone.. somewhere..

 

Zilla

 

Do you have any advice for people where the balance is over £25K mine is about £27K and if I get the 27K under 25K can I then start negotiating or does it only apply if the opening balance was under 25K

 

Cheers for any advice

Mike

[jhill]

Hi All,

 

I'm in a slightly different position with Northern Rock but this may help people here? I'd really appreciate anyone with some legal experience commenting on this too.

 

In July 2006 we took out a NR Together Mortgage and the Unsecured Loan was for an amount exceeding £25,000.

 

At the top of the agreement for this loan it reads "Loan Agreement Regulated by the Consumer Credit Act 1974" although at the time of signing, the Consumer Credit Act only covered amounts upto £25,000.

 

When we took out the mortgage I remember noting that it was unsecured and covered by the Consumer Credit Act and saw it as a positive thing in protecting me, the consumer.

 

However, where do I stand now? In my opinion, NR have lied to me and led me to believe that I had the protection of the CCA when I didn't.

 

Any Ideas? I've attached a copy of the agreement.

[ZillaK]

.. not entirely sure on those other points raised.. the £25,000 limit was removed with the CCA2006 which came into effect the following year..

 

@ Mike - it would depend on the initial sum loaned.. but there's nothing stopping you from trying to negotiate a reasonable outcome..

 

..best thing to do is to read about as many similar experiences on here and google around too..

 

@ JHill - in my opinion you're protected by the CCA if that's your concern..