NORTHERN ROCK TOGETHER MORTGAGE - Help please? x.

[emlouh]

I posted this somewhere else, but not actually sure if I posted it in the right section. So sorry, I'm a new user and really don't have a great idea of what I'm doing. I'd be so grateful of advice please..........

 

My (now) husband and I applied for a Northern Rock Together Mortgage towards the end of 2005 and finally had the funds and exchanged contracts on our first home in January 2006.

 

We actually bought our home for £100,000 - but the mortgage was for £117,750 - as my husband had other debt that needed paying and we needed money for legal fees and decorating costs etc. At the time it seemed like a great idea. We were a couple of 24 year olds buying our first home - and unfortunatley we let this idea get the better of us! We really thought we'd be living the dream, but how wrong we were!

 

The secured part of the loan was about £97,000 and the remainder formed the unsecured part.

 

How we ever got through the affordability part I will never know. At the time I was on a mere £13,000 per year and my husband £15,000. A combined £28,000 - yet we were accepted (oh how I now wish we hadn't) and the mortgage went through, at a payment of £659 per month. It hit us quick - by the time we paid our bills, we didn't have much left at all.

 

We both went on to get higher paid jobs, but with our other outgoings, we still struggled. We phoned Northern Rock regarding this and found that they offered "payment holidays" - so we took them (oh how I wish we hadn't). Our monthly payment never went up after these holidays though.

 

In November 2008, I found I was pregnant and had a beautiful baby girl in summer 2009. We phoned Northern Rock again to see if there was anything we could do re payments etc, with me going on to maternity pay etc - and they said we had two options, either a payment holiday - or a "maternity break", which would mean we'd be payment free for 6 whole months! Of course, we took it (oh how I wish we hadn't) - but at the time it was a means to live and get by.

 

The payment did go up this time - and I'm almost certain they said that it would be for the Maternity Break AND for previous Payment Holidays we'd taken in the past. They said something like they didn't do it before, but they do now. Of course, it's not that I didn't expect it to go up, but I don't understand why it didn't go up a little after each payment holiday we had?

 

Anyway, we now have a mortgage for almost £120,000 - the secured part staying at £97,000 and the remainder on the unsecured part. Our monthly payment has gone up to £697. Our house is probably worth £100,000 - if we're lucky.

 

Please don't think we don't take any responsibility for this at all, we really do. We were the ones who signed, we were the ones who took the breaks etc. I know this. BUT, it's been so easy to take. Whenever we've phoned for a solution, we just get offered more - not directly - but effectivley Payment Holidays etc are the same. When you're desperate, it seems like a way out - albeit short term, it got us by.

 

We're really struggling now. We've called Northern Rock to see if there is anything we can do. We've been honest and explained that we're struggling and really need help. They offered us 3 options - 1) Wait for a Payment Holiday - 2) Make a part payment for the next few months, which could give a black mark - 3) Swap to an interest only mortgage for 12 months, for which they'd want £75 to swap to and then another £75 to go back to repayment after the 12 months is up!?!

 

I just don't know what to do for the best, and it really is all getting me down. We've made our mistakes, I know - and we just can't go back.

 

Surely Northern Rock have been equally as irresponsible having these "lifelines" on offer, which put us in an even worse position than we were to begin with? Surely this is irresponsible lending, right from the start?

 

This mortgage has just got from bad to worse, if they'd have just said "NO" in the first place, we would have just had to wait until we could really afford a house - but instead it's just spiralled to the mess we're in now.

 

CAN ANYONE PLEASE OFFER ANY ADVICE? Is there anything we can do to attempt to get us out of this complete mess? Your help would be greatly appreciated. Thank you x.

 

ALSO, I have been looking at companies that help with this sort of thing. I came across a company called "Kerobo Claims" and had a discussion with them, and they wanted upfront fees to take any case forward once it had been assessed. I used my head (for a change) - and after looking on here, I know that doing anything with them is a BAD idea!

 

I have found another company called "Clear Unfair Credit" - they state they take NO fees at all. I phoned the number to see what they said and asked them straight out what they would be getting from it if there were no fees - and he said that they claim from the other party (who would be Northern Rock in this case). He said that the only fee we would be charged directly would be £345 IF we settled directly with Northern Rock, cutting "Clear Unfair Credit" out, effectivley 'going behind their backs' as he put it. He said as long as we did everything through him, we would definatley not have any charges.

 

I'm really confused. I really don't think if we did have any type of case that I could manage on my own, but I don't want to be silly again and end up owing/paying even more money out!

Edited January 26, 2010 by emlouh

[emlouh]

Still unsure of what to do, so I contacted the Citizens Advice Bureau. They advised speaking to Northern Rock about our worries and consider sending a complaint to the FSA, regarding irresponsible lending. They said to maybe even ring the FSA first to see if we would have ground for a complaint.

 

I called the FSA and explained things to them. They said it would be a complaint they would consider and look in to. They are sending out complaints forms to me and said they would NOT contact Northern Rock unless we decided to pursue the complaint.

 

I'm also sending a Subject Access Request to Northern Rock, so that we have all details to help us hopefully make a better decision in what to do.

 

Am I going about this the right way? Does anyone have any advice at all? Is all of this even worth it, or do we have no real basis to complain?

 

Thank you x.

[emlouh]

Anyone? Any advice would be appreciated.

 

Thank you x.

[ZillaK]

hi.. you have a number of options to think about.. are you not keen on the idea of going interest only for a while if it helps resolve the current burden?

 

Zilla

[emlouh]

Hi Zilla,

 

Thanks for your reply.

 

I have thought about it, yes - but it would only be for 12 months, we'd only actually be saving £90 per month, I'm still debating if it's the right thing to do, or if it will, in the long run just make matters worse. We've always jumped in with the payment holidays etc when the time was right, to resolve the burden for a short while - but I can't help but think, are we just making things worse for the future?

 

When our fixed term agreement is up next January, no-one else will touch us with a barge-poll and we'll go to Northern Rock's standard variable rate - which is actually a lower rate than our fixed rate at the moment, but if it goes higher, we're up the creek without a paddle, so to speak.

 

I just don't know what to do. But it looks like we're stuck with Northern Rock for a long time yet! Unless we can claim or something re irresponsible lending, but I don't know if we'd have any kind of grounds?

 

Many thanks x.

[emlouh]

Hi again! Wondering whether to even bother completing the forms re complaint to FSA? Don't know if it would actually help at all?

 

Then there's this "Clear Unfair Credit" company. Don't know if they're genuine, or just out to take people for a ride.

 

I can't help but feel that Northern Rock have been majorly irresponsible in their lending (as above). I know we're to blame too - but if they'd not offered it, we'd have just not bought a house when we did. No other mortgage company offered us a mortgage without a deposit at the time. The payment holidays etc are a light at the end of the tunnel for a while, but in the end they just make matters worse - and put even more money in Northern Rock's pocket.

 

We're stuck!

 

Any advice, please?

 

Thank you x.

[emlouh]

Anyone? x.

[emlouh]

I read somewhere that if I complain to the FSA, they just side with the mortgage provider, is this true?

 

x.

[midge61]

Hi

 

You are thinking of the Financial Ombudsman Service.

The FSA are regulators and they are clamping down on mortgage companies over issues like this at the moment.

 

You have nothing to loose by making the complaint so go for it.

 

I think you need to sit down and go through your finances and see where you can make savings to get you thruogh. You could also contact the National Debtline they are very good and will go through everything with you and give you sound advice.

 

All the best.

[Et Contra Pacem Regis]

Clear Unfair Credit are a claims managment company. They know little to nothing about the law and are essentially a middleman between you and the solicitors who actually do the work. It is entirely possible that they charge a referral fee to the solicitors, and get something out of it that way. If you do want to use them, or any other CMC, I would suggest you ask about referral fees, which company will check your loan agreement (I don't think that a mathematical audit will achieve anything in this case) and that sort of thing.

 

There may be an aspect of what is known as an "unfair relationship" in the way these agreements were handled. Northern Rock lent you money that they probably shouldn't have, and then kindly assisted you in getting even further into debt. Did they explain for they payment holidays and maternity breaks that they your debt was still accumulating interest?

 

Something else to watch out for with these together loans/mortgages is this: if you read through your unsecured loan agreement, you may well find that should you ever cease to be a borrower under the mortgage, the interest on the unsecured loan will jump by 5%.

 

There may be solicitors dealing with consumer credit act matters who might be able to do something about this, but its by no means certain and very likely will be no help at all for a long time - months. Always be weary of anyone who promises a definate outcome.

[emlouh]

Hi, thanks so much for replies............

 

"There may be an aspect of what is known as an "unfair relationship" in the way these agreements were handled. Northern Rock lent you money that they probably shouldn't have, and then kindly assisted you in getting even further into debt."

 

>> I'd be interested to know more about the "unfair relationship".

 

"Something else to watch out for with these together loans/mortgages is this: if you read through your unsecured loan agreement, you may well find that should you ever cease to be a borrower under the mortgage, the interest on the unsecured loan will jump by 5%."

 

>> The loan DOES jump by 5% if we pay the secured part off, but choose to keep the unsecured part with them, which we didn't realise at the time, but it is in there - and we signed.

 

I also heard that Northern Rock gave an option of taking the unsecured part just over 5 years, instead of the whole mortgage term - although this was something that was never mentioned at the time we took it out.

 

Many thanks x.

[Et Contra Pacem Regis]

The relevant legislation for Unfair Relationships is the Consumer Credit Act 1974, section 140A-C (as amended). These were added to the Act by the Consumer Credit Act 2006, and there are complicated "transitional provisions" covering agreements already entered into.

This is the link for s140.

Consumer Credit Act 1974 (c. 39) - Statute Law Database

 

It seems to me that some of what NR did, in advising you to take breaks during which interest accrued, would be suspect under the OFT's draft guidelines on irresponsible lending, but then, those guidelines were not present at the time.

 

I have heard of one success using s140, which resulted what had been a pattern of predatory lending being in effect reduced and rescheduled by the court, however this is pretty new stuff.

 

Lawyers will be weary of it because of the breadth of the test, the discretion of the court, and the extensive nature of evidence required to run such a case. There's a lack of authority with regard to section 140, possible for that very reason.

 

As for the 5%, it is a nasty little surprise, and perhaps arguable under the Unfair Terms in Consumer Contracts Regulations, but that is a less relevant concern now that the mortgages are so much harder to come by...

[emlouh]

Hi,

 

I received some paperwork back from Northern Rock. I only received details regarding the unsecured part of our Together Mortgage, as the request I sent the one relating to the Consumer Credit Agreement - as confirmation, the agreement does state......

 

"If you cease to be a Borrower with us under the Mortgage, (or transfer to a new mortgage product with us, or enter a new mortgage with us) a variable rate which will be 5% above our Standard Variable Rate will apply to this agreement".

 

Neither of us can remember that part, but it's there - and at the time anyway, of course, we never imagined that we wouldn't be able to just go and get another mortgage elsewhere at the end of the 5 year fixed term. As it stands now, we won't be able to for the whole mortgage, because of negative equity - so we have two optons 1) to stay with Northern Rock at whatever their rate may be for both parts of the mortgage OR 2) try and move the secured part to another provider & keep the unsecured part with Northern Rock - but at 5% above their SVR. Of course, as we've been moved to Northern Rock Asset Management, we don't have the pleasure of being offered any kind of new deal with Northern Rock.

 

OUT OF INTEREST, I called to query why they sent nothing regarding the secured part of our mortgage - and they said that there was no Consumer Credit Agreement for the secured part, that it was just the signed mortgage offer. ********** The thing is, I've just had another look through the folder that we kept everything in from when we took the mortgage out - and in there is the signed agreement for the unsecured loan. There is NOTHING AT ALL signed relating to the secured part of the mortgage. We have letters referring to the mortgage itself, but no signed offer, agreement or anything. I would have thought we would have had a copy of anything signed. **********

 

********** Should / would there be something? What would we have signed at the time to agree to the secured mortgage? If there is nothing signed, what would happen? **********

 

I've sent off a Subject access request relating to the Data Protection Act this time, to see the secured documents - and hopefully all other information they hold on us.

 

APOLOGIES TO EVERYONE IF I SOUND REALLY DIM, THINGS LIKE THIS HAVE NEVER BEEN MY STRONG POINT.

 

Many thanks x,

[Et Contra Pacem Regis]

I suppose there might be some kind of mis-selling there - that 5% thing is really rather important. Taking into account that the credit you took at the time was in part to settle other debts, it's not unreasonable to expect Northern Rock to point out that the 5% and the inflexibility it would cause in your finances.

This isn't really the sort of thing you'd pursue through the courts, but it might be worth trying to take it to the FOS. First you would have to complain to Northern Rock (Asset Management) setting out the problem (the 5% was (a) an essential part of the product, imposed because they wanted to tie the unsecured loan to the mortgage, in turn because they used the unsecured loan to top up the mortgage, (b) inadequately explained to you at the time of sale - NR were aware you were re-financing in addition to purchasing, therefore particular care should have been taken to draw the 5% to your attention, and, evidently, it wasn't).

 

The trouble is it's hard to quantify the harm caused - if NR had explained about 5% at the time of the mortgage, would you still have taken the loan with NR, or would you have obtained credit elsewhere on similar terms, without the 5% clause? Would you have obtained all the credit secured against the property? etc.

 

If Northern Rock don't respond satisfactorily, then you can complain to FOS. There are probably lots of people around here who know more about FOS proceedure than I do, so you should be able to get help with that...

[geoffthechef]

plenty of people had these mortgages...they helped push house prices even higher and people just went along with it...and now many many people are priced out of the market due to these mortgages and liar loans.....what a mess!!!

 

if i lied about my earning and got a 200k mortgage i could offer more than someone who never lied...hence i was responsible for putting up prices...and high prices mean less spare money for normal living..

[emlouh]

Hello again!

 

Right, I received all the paper work back from Northern Rock today in response to my Subject Access Request.

 

There is a signed credit agreement for the unsecured part of the mortgage - but nothing for the secured part. Should there be?

 

There is an "Offer of Loan" in there outlining our secured loan amount and that we are also taking out an unsecured loan. This isn't signed though. There's nothing at all signed relating to the secured part. Should we have signed the "Offer of Loan"? I would think we should have signed something to accept their terms and the loan itself?

 

Within the "Offer of Loan" there is a paragraph stating ""You are under no obligation to accept this offer of loan or enter in to a Consumer Credit Agreement or any other agreement with us"" - could we have accepted it without signing?

 

There is the fax in there that was sent from our solicitors at the time of sale to Northern Rock - and all of it only related to the unsecured part of the loan.

 

There is a "Online Mortgage Application Declaration" in there, along with a direct debit mandate, both of which we signed before any actual mortgage offer was made - one of the declarations is: ""You accept that one of the terms of applying for a loan is that Northern Rock need not give any reason for declining the application"" - which leads me to believe this wasn't any kind of acceptance to an actual loan.

 

Can anyone please help at all?

 

Many thanks x.

Edited March 18, 2010 by emlouh

[emlouh]

Anyone?

 

Thanks x.

[Nightmare4banks]

Hi All!

 

Emlouh.in reply to your posts and in my view:

 

1.You and your husband managed to get the high mortgage amount because Northern Rock would lend using higher income multiples.

 

2.The best option would be to go interest only and the pay the applicable fee.This should not affect the balance hardly at all because in the first few years you are paying back mainly interest.By the way,the fees are standard and not excessive.You could probably extend the the interest only option beyond one year a thing you should ask Northern Rock if you want to consider this option as it might be better for your finances.

 

3.You would have received the mortgage offer for you to keep in a safe place and then signed/witnessed the Deed so that Northern Rock could register its charge with the Land Registry.

 

4.Make sure that Northern Rock has not introduced different terms and conditions to the ones that were sent to you with the mortgage offer.As this would clearly be a form of misselling and which you should hopefully be able to get redress whether through the courts or the FOS.

 

Anyway,I hope this helps.

 

If you have any questions,just ask.

 

Keep us posted.

 

All the best!

Edited March 18, 2010 by Nightmare4banks

[rubberlips]

Hi emlouh,

 

I hope you are well.

 

You have my complete sympathy as I am also a Northern Rock 'together' customer. Thinking about it, the whole mortgage was a mistake when the banks were engaged in a money grabbing practise. We were paying dead rent on a flat in London which was getting too small. We had no savings (we were paying it all in rent), existing personal loans and credit cards (which we were trying to get down) and knew that, at the time, house prices were rising all of the time. It seemed there was no way we'd get on the property ladder, despite both of us holding down good (secure-ish) Civil Service jobs.

 

We therefore approached Lloyds TSB, as we were both existing Lloyds customers, just to see what we could do in the future. Unsurprisingly, Lloyds said there was nothing they could do there and then, but advised us not to lose heart because they would refer us to their mortgage broker at Cheltenham & Gloucester to see what they could do. The guy from C&G phoned us up and we went through the basics on the phone. He pretty much said that the only people willing to give us a mortgage would be Northern Rock, and he quickly explained the deal. Before we knew it he was talking us through an application and, equally as quickly, we were accepted! At the time we couldn't believe our luck! We were just managing to jump on the property ladder, just as house prices were continuing to rise! How lucky!

 

Then the crash happened. It didn't concern us too much at the time as we already knew we couldn't go anywhere else and we were tied to a two ear fixed rate. We just hoped that the bank would be taken over by another bank and then we would be offered another fixed rate at the end of our fixed rate.

 

Sadly it wasn't to be. We were "trapped" (for wont of a better word) and our mortgage has been shunted to Northern Rock Asset Management. Now our fixed rate is coming to an end and NRAM have advised us we will be going onto their standard variable rate. For the moment it's to our advantage (it's lower then the fixed rate we were on) but things can only get worse... I'm fairly certain they won't get better!

 

Then there has been an added worry. Life is expensive (especially here in London) and credit cards have crept up as there is little spare money in the house. I've dipped into my Barclays overdraft and, because of a couple of cash flow issues, I've used a safety net facility - at a charge of £22 for each week I use it. On top of this I have a personal loan coming out of my account every month - which Barclays agreed to AFTER the Northern Rock mortgage had come through. I recently asked Barclays for some help - consolidating the overdraft, loan and credit card with one single loan only £3k above the original loan amount from two years ago. Given that I've had two work promotions since then, and the payment would actually be LESS then my current outgoings I didn't think there would be a problem. They flatly refused. So now I'm stuck with a Northern Rock 'together' mortgage I can't negotiate deals on, a home in negative equity (in a duff part of London) , a credit card I'm making minimum payment on (but can't afford anymore), an overdraft I am trying to get out of, a loan which still isn't paid off (will be in three years) and a student loan which they've started to take money for (because my wage is above the threshold).

 

On top of this we are expecting our first baby in a few months.

 

I feel I have been completely screwed over by banks and building societies who were quick to offer me these products as my wife and myself tried to build a life together.

 

The really annoying thing is I'm not a 'bad' customer. I always make minimum payment, we've not had mortgage trouble (yet) and we got into what appeared to be a legitimate mortgage deal fairly. Yet now because it is 'asset management' it is none negotiable, and suddenly the banks who were so willing to help in the past are unwilling to help anymore.

 

Anyone got a magic wand? (Or next week's lottery numbers?!)

[vics28]

We are in exactly the same position with a northern rock together mortgage - i wish we had never been accepted - i wish we had just opted to rent as i can't see an end to the night mare.

 

We are due to come out of ou fixed term next March and i'm dreading it as no other company will touch us due to the serious negative equity.

 

We have only managed up to now living on overdrafts and credit cards as my partner lost his job - he has a new one now but the wage is much less and differs every week.

 

It feels like we are constantly fighting a losing battle, I don't know where to turn and just keep hoping for a change of fortune!

 

In a way its nice to know there are people out there in the same boat, just which someone had an easier answer but hey ho. if anyone does find an easier answer please let me know:-)))

[thirty-n-fat]

I am thinking of going down the unenforceable route on my unsecured loan, is this possible when I wish to continue the mortgage or will they make life hell?

[laalinz]

subbing with interest as I to have a together mortgage

[Crokeria]

There's no easy answer but its nice to hear of others in the same boat. This is what I did (and it wasn't easy)

 

1. I put all my debt into a Debt management Plan with CCCS. The best thing I ever did. They charge no fees, i did it all online and agreed a repayment plan of £135 (down from £450) I didn't declare all my income (my partner gives me £500 housekeeping) So it meant I could offer less. It'll take 8 years to pay off but all my creditors froze interest and were surprisingly helpful.

 

2. Before I did that I opened a new bank account with a debit card because once you do the DMP they don't wanna know. its so NICE to have a bank account where I don't owe THEM any money!

 

3. I have no credit now. I don't CARE - I never want credit again anyway. I save up now.

 

4. Reducing the payments on my unsecured debts meant I could easily afford the mortgage. Despite the misgivings of the Together Mortgage I still love my home. When the market recovers (it will!) the debt will reduce.

 

5. I'm overpaying on the Mortgage to make a buffer against any scary SVR increases.

 

I hope this helps. If you're over your head for heavens sake do a Debt Management Plan. Do it all online at CCCS (google it) Then when the letters come just send them all to CCCS.

 

6. Change your phone number and don't give it to ANYONE except friends. result - no collection calls from India.

 

I hope this helps someone.

[Parrot01]

Hello, been reading with interest the post regarding Northern Rock.....i am in the same situation.

 

Now, i was told over a year ago that the unsecured part of the mortgage could be claimable as it was unlawful. I did have a solicitor working on this but have not heard anything since Jan 2010 even though i have chased many times.

 

Has there been any progress on this? Has anyone got positive news as yet?

 

I am in the process of selling my flat and also paying off my mortgage but would like for some advise regarding the unsecured loan part and if there is anything we can do to tackle this problem.

 

Many thanks and await to hear

[Happyhippy1959]

Yes good point Crok CHANGE YOUR PHONE NUMBER I HAD CALLS EVERY 5 MINUTES ON MY UNSECURED DEBT.