Help please Ell_enn Offset Mortgage problem - Mortgage Current Account Terminated

[jimbo45]

Hi there Ell_enn

 

Got a strange one but a bit worrying from The Woolwich.

 

I've been self employed so payments are a bit irregular -- however the Mortgage part is NOT in arrears.

I got a nice XMAS present from The Woolwich saying that my Mortgage Current account had been TERMINATED and the Bank want FULL and IMMEDIATE payment of the amount on this account (around 15,000GBP). Of course I can't pay this up front.

 

Now if the actual Mortgage is not in arrears what do I need to do so I don't technically lose the house.

 

I know my payment history has been somewhat erratic -- I've had arrears of up to 3,500 GBP at times but it's ALWAYS been paid -- self employment goes like that especially in these times where it's often "Feast or Famine".

 

My current Mortgage amount outstanding is around 15,000 GBP ( Note NOT arrears --this is the total amount of the Mortgage excluding the current account outstanding) which I can service OK. The property is probably worth around 250,000 GBP with no amounts on it other than the mortgage.What do I need to do next.

 

There is NO way on this planet I can suddenly find around 15,000 for the Mortgage current account although I could offer instalments.

 

The original mortgage was an "Offset" Mortgage.

 

Honestly I thought Banks were meant to help people these days -- demanding 15,000 GBP up front a few days before XMAS without warning doesn't seem to me to be a de"cent way of enabling a fair solution to be arrived at in trhese days where you have to take work where and when you can get it.

 

Thanks in advance

 

jimbo

[Ell-enn]

Hi Jimbo - did they give you any warning they were going to terminate the account?

[newstarter]

You need to speak to the Woolwich first thing tommorrow if possible to get a few things cleared up,if your offset mortgage is one where any savings acount or current acount is managed together with your mortgage account,(they can be managed seperate yet still offset your outstanding balance) then the current account would show as 15k owing which you say they are trying to call in,however as the 15k is the balance on the mortgage and not arrears,they cannot terminate your mortgage,but can terminate your current account.I would give them a call and get some answers from them before we go any further with this,the 15k would show on the current account but only because its manged together with your mortgage account,the fact is your up to date with morgage payments so there should be no problem,plus the current account is in order,im just wondering if someone has made an almighty blunder here.

[newstarter]

P.S,it could be that someone has looked at your current account and read it to mean you are 15k overdrawn and not taken into account your outstanding mortgage (this wouldnt surprise me at all !!)

[jimbo45]

Hi there

there is around 15 K on the Mortgage Current account -- just within the overdraft limit and around the same outstanding on the actual mortgage but no arrears on this account.

 

So total owing to the Bank is around 30 K .

 

I don't actually have too much trouble making payments currently but certainly can't pay off a 15 K piece in one go.

 

The Termination notice came out of the blue on Dec 22 -- what a lovely XMAS present -- seems these banks deliberately do this stuff to cause MAXIMIUM stress.

 

There have been irregular payments on the account since I am now self employed and money arrives at HUGELY differing times and amounts. However any arrears on the Mortgage have always been paid off in FULL.

 

I explained this to the Bank but they can't seem to understand peopl whose income doesn't fit typical 9-5 type jobs.

 

I'll explain again to the Woolwich and see what happens next.

 

I did manage to speak to a HORRENDOUSLY unsympathetic person in the collections deptl at a previous time when I was in arrears when I explained that I was self employed -- he said this wasn't the case when you took out the Mortgage -- true but the whole employment scenario etc has changed HUGELY since I took the mortgage out. It doesn't say on the agreement you have to notify them of change of employment as far as I can see either.

 

Cheers

jimbo

[newstarter]

Ah the fog has cleared 15k overdraft they are calling in i see! Well lets see what they have to say about this before we go any further.As far as your home goes you are protected under s36 of the administration of justice act,you have to be in arrears by over 2 months before they can do anything so your ok on that front,lets just see what they have got to say about all this as i have a suspicion here concerning what they are trying to do.

[Ell-enn]

This is S.36 of the Administration of justice act

 

S.36 Administration of Justice Act 1970.

 

36

(1) Where the mortgagee under a mortgage of land which consists of or includes a dwelling house brings an action in which he claims possession of the mortgaged property, not being an action for foreclosure in which a claim for possession of the mortgaged property is also made, the Court may exercise any of the powers conferred on it by subsection (2) below if it appears to the Court that in the event of its exercising the power the mortgagor is likely to be able within a reasonable period to pay any sums due under the mortgage or to remedy a default consisting of a breach of any other obligation arising under or by virtue of the mortgage.

(2) [the court, if satisfied that there is a real likelihood that the mortgagor would be able within a reasonable period to pay any sums due under the mortgage: ]

(a) [to] adjourn the proceedings; or

(b) on giving judgment, or making an order, for delivery of possession of the mortgaged property, or at any time before the execution of such judgment or order, may-

(i) stay or suspend execution of the judgment or order, or

(ii) postpone the date for delivery of possession,

for such period or periods as the court thinks reasonable.

(3) Any such adjournment, stay, suspension or postponement as is referred to in subsection (ii) above may be made subject to such conditions with regard to payment by the mortgagor of any sum secured by the mortgage or the remedying of any default as the Court thinks fit.

 

- it does not mention any number of months in arears before action. Lenders could in theory bring action if you miss one month's payment, if that is what is in their terms and conditions - however, it is generally recognised that you have to miss 2 or 3 months payments before action is commenced.

[newstarter]

Ah i didnt mean to make it look as though the 2 months in arrears is included in s36 but your right thats how it looks from the way i have written the post,what i was trying to explain is that s36 protects the borrower but just added that further that lenders will not take action untill at least two payments have been missed.

[jimbo45]

Hi there

the repayments on the Mortgage part of this are around 212 GBP a month -- this would mean that even 8 Months arrears would only amount to around 1600 GBP which I could pay in any case on my current contract.

 

I'm totally fazed why I'm getting stung for all this which are by any standards whatsoever are trivially small amounts of money compared with the equity in the property --around 220,000 GBP.

 

I've seen people with arrears etc of more than my whole OUTSTANDING Mortgage not been subjected to the same sort of hassle -- especially calling in an overdraft on a current account.

 

The Banks of course know that its IMPOSSIBLE to pay off the whole lot in one go so I'm waiting to see what the next step is.

 

I'm not scared of going to Court -- but it seems that if you are self employed the odds are stacked against you since Banks and Judges seem to like definite 9-5 type of Salary earners rather than people who can say pay 3 or 4,000 GBP and then nothing for say a year or more.

 

That's the nature of my work currently -- especially being out of the UK while I'm on contract.

 

Cheers

jimbo

[newstarter]

Unfortunatly bank overdrafts can be called in at short notice,your mortgage cannot,however you must first be informed either by phone or letter and the bank has a duty to call you and discuss the problem before the overdraft is called in,for reference read the banking code and fo.s guidlines.I would inform the bank that you are not being treated fairly as no one from the bank has discussed this matter with you and inform them that you are going to make a formal complaint to the banking ombudsman.As you say,what makes them think that you have a spare 15k lying around to pay them off just like that,i agree its crazy,but you do need to get that complaint off as soon as possible,but dont worry about your home.

[jimbo45]

Hi there

Thanks -- I was worried that they could say the overdraft was technically part of the Mortgage.

 

What I'm going to do is pay another 3K into the Mortgage to bring it down to 12K (that's around 15 months payments in one go so there shouldn't be any more payments for another year or so -- I'll have a NICE PENSION by then anyway-- ) and wait and see what happens.

 

If it goes to court over the amount of overdfraft they need paying back in one go then I'm sure I'll probably get some sort of decent deal from the Court -- the Bank will probably sell off the debt to a DCA anyway who can probably be dealt with.

 

From what I've seen Courts are on the whole reasonable if you can attempt some sort of repayments --they usually won't enforce ludicrous TOTAL repayment terms in one go.

 

I'm not trying NOT to pay but I was really worried on getting tossed out of a home for an overdraft. Offset Mortgages were a strange type of Mortgage which is why I got confused about the whole issue.

 

Cheers and thanks to all

 

jimbo