ERC Kensington Mortgages *Withdrawn*

[ellielou]

MCOL finally registered on Monday 16th October 2006 for £6,204.39 (inc int & fee)

 

Fingers crossed now.

 

[markt]

good luck !!

[paddym]

good luck ellielou !

[zootscoot]

Best of luck Ellie!

[catherinebear]

Good luck ellie we are pursuing Kensington and GMAC we had a letter Kensington regarding our statements and proof of identity and today I recv'd identical letter from GMAC word for word are these two companies related!! I bet they are they are both b........s!! Will be watching your thread with interest. Go get em girl!

lol

Catherine and Dave

xx

[ellielou]

Hi Catherine

 

I seem to remember reading a thread on here where a financial advisor said that mortgage companies out source their admin to other companies & many of them are out sourced to the same admin firm. Which may be the reason for the identical letters.

 

I'm a bit worried about it all to be honest but it was the support on here that gave me the courage to register the claim. Hopefully they won't want the publicity and just pay out..................... or maybe not ;-)

 

I'll keep you updated.

x

[paulpb123]

Don't worry Ellie, there's more and more ERC reclaimers every day and the mortgage companies are starting to cave in just like the banks. I suspect that they really don't want the publicity and they really really don't want to explain their charges to a court. The banks don't want to for exactly the same reasons. Put yourself in their position for a moment. They lose an ERC case in court. It makes the news. Millions of people filing claims. It would cost them billions of £££££s. My guess is that, like the banks, they'd rather pay out a fairly limited number of small claims (6k + might be a lot for the likes of us but not for these companies. Their directors probably spend that on a bottle of wine at lunchtime). The facts are clear on this. Redeeming a mortgage early represents a breach of contract, no matter how keen they are to say it doesn't. This means that they are not allowed to impose an excessive charge for the breach:

 

"A term in a mortgage contract that requires the borrower to pay more for breaching the contract 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 at Common Law and (in a consumer mortgage) under the Unfair Terms in Consumer Regulations".

 

If the charge reflects their losses then why don't they say so? It would be far more effective than the standard letters they send out to our prelim letters, where they seem desperate to make the (incorrect) point that there has been no breach. That seems to be their only argument but it simply won't stand up in court. Hang on in there, you'll get your money in the end and so will the rest of us. I hope this makes you feel a little better.

Paul

[ellielou]

Just a quick update got a letter from Kensington yesterday. Telling me they need a further 7 working days to investigate my complaint?! and that they acknowledge my MCOL claim.

[ellielou]

Finally had a reply from Kensington explaining their ERC.

It basically says that had they known I was going to redeem the mortgage within the first 3 years they wouldn't have offered me the mortgage. However, the ERC is there to cover such costs as admin, marketing, premises etc. There's a lot of rubbish in the letter but the conclusion is that they think thier % of loan repaid way of working out the ERC is not unfair and is a genuine true estimate of costs & they will not refund. However, any claim I make for this money will be rigourously defended.

 

I haven't got the letter with me today but I'll get it typed up and put on here. I don't feel threatened by the letter as they still haven't given any hard figures to support the ERC, so I'm still confident I did the right thing by registering my claim last week. I still haven't received any acknowldgement from Kensington via the court yet either. Hopefully they've missed it - I've got another 7 days & then I could win by default - can't see that happening though

 

I'll post the full letter tomorrow x

[Bonus77]

I think ive read that response from Kensington before. Standard nonsense as usual.

 

Im still waiting a response to the online claim I submitted for my charges. I issued it on the 5/10, so I can certainly say they are slow. They have acknowledged it, but thats it. Roll on next week when I can hit that judgement button!

 

Hang in there Ellie.. it will all come good.

[ellielou]

Sorry it's so long but here's the reply Kensington sent me - any thoughts?

 

Further to all our recent communications, regarding your dealings with Kensington Mortgages, I have now fully investigated the issues raised.

I am sorry that you have experienced problems with your mortgage. In your letter, you explained;

• That you believe the ERC to be an unlawful charge, and as such, you require a breakdown of the costs incurred as a result of redeeming within the first 3 years of the mortgage term.
  
• That if w are unable to supply the above information, you will not hesitate to issue a claim against us for the full amount, including and interest and costs.

I have now had the opportunity to review all of the circumstances leading up to your complaint being received in this office, and I hope that by presenting my findings to you, an outcome can be reached which will be of satisfaction to all parties concerned.

There are substantial costs involved in originating and administrating mortgages and w seek to recover these costs over the term of the mortgage. For this reason, the minimum loan term we allow is 5 years. Had we been informed at the time of your application that your mortgage was to be repaid within the first 3 years, then we would not have offered the mortgage to you. When borrowers repay their mortgage early, we seek to recover costs by way of the ERC.

The ERC represents a genuine pre-estimate of the costs we incur in originating particular products and varies depending on whether a customer takes out a variable rate, fixed rate or discount rate. The type of costs that are incurred by us include the following:

• Fees payable to intermediaries involved in introducing the loan, which are calculated as a percentage of the loan.
  
• Costs in relation to the funding the mortgage, including and discount or fixed rate, also calculated as a percentage of the loan.
  
• Operational costs.

I note for example that with your mortgage you benefited from a fixed rate of 8.65% from completion of the loan. When other costs such as the fees payable to intermediaries involved in introducing the loan, the costs of securitising the loan and the overheads associated in running a commercial organisation such as the costs of staff, premises and advertising are also included, the total costs incurred by us are certainly reasonable when compared to the ERC paid by you of £5,737.25. Therefore I fully believe that the way by which we calculate an ERC, as a percentage of the amount repaid, is a reflection of true costs and is fair and reasonable.

We have also provided details of our ERCs to both the OFT and FSA and they have not stated that they are excessive or disproportionately high.

I also note that you claim that our ERC is exessive and should be reduced or waived as you believe that it might be contrary to the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR).

We cannot agree that the UTCCR does not apply to the ERC as it is part of the price of the mortgage and clearly disclosed in the mortgage offer as such. I do not believe that the ERC is unfair or that it causes a significant imbalance in our respective rights and obligations arising under the mortgage, to the detriment of you. This is based on the facts that there were many other providers of mortgages available to you and you actually entered into the mortgage in full knowledge of the ERC and when it would apply.

Even if it was determined that the UTCCR applied, Section 6(1) of UTCCR states that the unfairness of a contractual term should be assessed by taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract. Specifically, and with reference to paragraph 1(e) of Schedule 2 as referred to in Regulation 5(5) of UTCCR, it is denied that the ERC requires you to pay disproportionately high sum in compensation for redeeming a mortgage early.

In view of the above, I am unable to consider refunding any charge, and whilst I understand that this may not be the answer you were looking for, I trust I have explained our position accordingly.

We note that you have stated that if you do not receive a positive response you will issue a claim in the County Court. We confirm that any claim you issue will be vigorously defended and that we will seek an order from the Court seeking recovery from you of any costs incurred by us defending the action.

My response is in accordance with stage 4 of our Customer Complaints procedure leaflet, a copy of which is enclosed for your information.

If you have any queries regarding my decision, please either contact me on 01756 692312 at the above address or refer to the enclosed leaflet.

Please be aware that if we do not hear from you within the next 8 weeks we will consider your complaint closed.

Yours sincerely

Linder Miller

Team Manager, Customer Response

[paddym]

codswallop ! ok they have once again skirted round the issue they havent given you a breakdown of their true costs they have told you what they consider to be their costs involved but not what you personally have cost them as a result of you redeeming early ! thats my opinion but im sure zoot will give it a good going over and create a worthy response for kensington & co !

[dolly]

OMG - same letter practically as I got from Redstone Mortgages (aka The Skipton)

[catherinebear]

Same sort of letters we got from GMAC and Kensington I agree with others on the site I think it is only a matter of time before they begin caving in as if this thing was to become known nationwide they would lose a fortune. I found an article on the net which refers to an article in the Sunday Times 5th Sept 99 where NatWest settled out of Court for ERC and they said then that it could lead to a flood of compensation claims for unfair redemption penalties!! There sure will be!

Catherine Bear

xx

[ellielou]

Just a quick update.

 

The MCOL was deemed as served on 22nd October which means by my calulations they have till Sunday 5th November to acknowledge which gives them another 14 days to defend.

 

To date I've not heard anything from them in the form of acknowledgement via the court. They did acknowledge my claim at the bottom of another letter they sent me - does this still count? I'm guessing it has to be though the courts?

 

I am therefore right in thinking if I don't receive anything today, tomorrow or Saturday I can register a judgement on Monday?

[jamorgan]

Goodluck Ellielou

 

Watching you watching me hun

Morgy

x

[hulsevictoria]

Kensington Mortgace Company is who I want to go after.

They increased my mortgage payments because of "unreturned mail".

They claimed I was renting the property out, I was not! I was doing the property up and it was in a right state for about 6 to 8 months.

I have bills to prove I was not renting it out.

My interest went up to about 16% and I had to sell because I could not afford the mortgage payments, then they hit me with the redemption charge. Ouch!!

 

About two months before I sold, I did rent it out, (after I compleated the works) since I could not aford the monthly repayments. I had to get the money every month somehow. I then sold it to an investor at a bargin price. Ouch.

 

If they haddn't clobbered me with increased payments I would never have sold the house.

I'm going to try and get the charges for late payments returned to me. I don't think I stand to get the redemtion fee back of anything.

I feel like the extra interest forced me to sell the house.

[paulpb123]

Hello Hulsevictoria,

You certainly can claim the redemption fee back, and the late payment charges. Start a new thread and we can get to work!

Paul

[ellielou]

lol looks I spoke too soon - just checked Moneyclaim & they've acknowledged today. Bugger

 

Well I've got my boxing gloves on let's go

[dolly]

Aaaaargh - typical. Mine is still showing issued as well but I am expecting a last minute acknowledgement.

[ellielou]

Well Kensington had untill yesterday to submit thier defence & nothing has arrived. So I went on line to register my judgement & it wouldn't let me! I called the court help line & was told that if the 28th day falls at a weekend it the day after the next working day that the judgement can be registered i.e. tomorrow. However, she said the judgement can take up to 48 to be actioned & they can still submit their defence right up until the judement is registed. So really they have another 3 days more than I thought.

 

We all know they're going to go right to the wire with this - I'm expecting a defence from them soon enough - can't see me getting to the stage where I can click that judement button

[paddym]

you never know ellie you might be surprised but i wouldnt get my hopes up just yet you know they like to leave us right to the end fingers crossed for you !

[dolly]

You will probably get to click the judgement button and they will file a defence late if they work how all the others have been doing.

[ellielou]

It'll come as no surprise to anyone that the defence button has been well & truely clicked by Kensington now.

 

I'll wait for a copy of it & let you know if they come up with anything we haven't heard before.

[ED1237]

Suprise suprise. I'm just behind you Ellielou, they have until Friday to submit thier defence. Care to bet against an eleventh hour job.