Northern Rock mortgage and secured loan.

[sturose]

I am trying to sort out a possible PPI claim on behalf of my mother.

 

The short story:

 

She re mortgaged her property through NR some years ago to raise finance to start a business, after a while she wanted to re mortgage again to raise more capital for expansion. Instead of re mortgaging they set up a secured loan which my mother didn't realise at the time.

 

To cut a long story short, I have sent them a template letter recently requesting a copy of the credit agreement and the terms and conditions for both the mortgage and the secured loan using details from her latest statement. They have replied stating that the account is not a consumer credit act regulated loan because it is exempt in accordance with section 16 of the consumer credit act.

 

I have no idea what this means and have no idea how to pursue this now, any help would be appreciated.

 

 

Stu.

[sturose]

Any advice would be appreciated, I have my mother waiting for me to give her the answers but I have no idea.

 

I can provide more information if required.

[sturose]

Posting here as I couldn't see a subforum for northern rock.

 

I'm asking on behalf of my mother regarding her mortgage which should be finished as of August 2013,

if any further information is required it may take a while to get it so please bear with me.

 

The mortgage was originally taken out a long time ago and the final payment was due next August,

during the loan period she remortgaged and took out a secured loan.

 

She specifically asked for the payments to be increased so that the mortgage would still only run for the same time as the original loan term.

 

This was agreed by northern rock and she has been paying the increased payments for the last 8-10 years, (can't remember exactly).

 

They have just decided to contact her to inform her that they originally miscalculated and the payments have to be increased by £110 per month and run for an additional 7 months after the original final payment date of August 2013!

 

She is understandably upset about this as she retired last November and she was looking forward to owning her home outright and having the extra cash, she arranged for this mortgage to be finished at this time as is would coincide with roughly the time she would retire within a few months.

 

I have advised her to at least complain as she would most likely have continued to work for another year or so if they had informed her of this miscalculation earlier and I believe it to be at the very least unprofessional for them to miscalculate the repayments and not realise until just before the end of the loan term.

 

Is there anything she can do about this other than send a strongly worded complaint?

Edited August 21, 2012 by sturose

[sturose]

Thanks to whoever moved to the correct section. Anyone got any advice for her?

Any help would be appreciated as she is now understandably very worried about these extra payments.

[Lea_HTH]

She will need to start with the internal complaints procedures first. Once that is exhausted, and if she doesn't get the result she wants, she can complain to the Financial Ombudsman.

 

My thought is that maybe she could state that she had relied on their calculations to be accurate, thereby making her future financial planning secure. As they failed to do that accurately, she will suffer a detriment. She may need to see a solicitor and discuss the potential for a claim of estoppel.

[sturose]

Thanks for the reply, exactly what I have suggested to her.

 

I just wanted to know if it was worth pursuing or if they can actually do this and get away with it.

[Lea_HTH]

They can do it, doesn't mean it is correct.

[wfspayback]

Hello

 

Do you have it in writing that Northern Rock miscalculated the payments ?

 

If you do, when complaining to the Financial Ombudsman Service, you should make reference to this

 

http://www.financial-ombudsman.org.uk/publications/guidance/mtge_underfunding.htm

 

And make it clear that Northern Rock is to blame. You could even make reference to the above in your complaint to Northern Rock.

[sturose]

Hello

 

Do you have it in writing that Northern Rock miscalculated the payments ?

 

If you do, when complaining to the Financial Ombudsman Service, you should make reference to this

 

http://www.financial-ombudsman.org.uk/publications/guidance/mtge_underfunding.htm

 

And make it clear that Northern Rock is to blame. You could even make reference to the above in your complaint to Northern Rock.

 

I'm not altogether sure what was said in the letter but I believe it does mention that they have miscalculated the repayments. I will contact my mother to find out.

 

Thanks for that useful link, it explains quite a few possible scenarios. I will pass that information on.

[wfspayback]

If the letter does not confirm the mistake, another line or argument you could try is in regard to the payments and arrears.

 

If the monthly payments are made by direct debit, you can argue that Northern Rock controls the amount taken each month and if there have been no letters regarding arrears, your Mum had no reason to question the amount paid each month.

 

There was a big story about a lender a year or two ago now, I think it was the Leeds that tried this on mass with their borrowers, hence why the FOS published its guidance.

 

I hope it all works out for your Mum

[sturose]

I did have a thread here previously which I started a couple of months ago, it seems to have vanished along with other peoples threads as I have been reading. If and when the thread is found can the mods please merge with this one. Thanks.

 

Fortunately I had posted the original question elsewhere so I will post here and hopefully it will jog somebodys memory.

 

I'm asking on behalf of my mother regarding her mortgage which should be finished as of August 2013, if any further information is required it may take a while to get it so please bear with me.

 

The mortgage was originally taken out a long time ago and the final payment was due next August, during the loan period she remortgaged and took out a secured loan.

 

She specifically asked for the payments to be increased so that the mortgage would still only run for the same time as the original loan term.

 

This was agreed by northern rock and she has been paying the increased payments for the last 8-10 years, (can't remember exactly).

 

They have just decided to contact her to inform her that they originally miscalculated and the payments have to be increased by £110 per month and run for an additional 7 months after the original final payment date of August 2013!

 

She is understandably upset about this as she retired last November and she was looking forward to owning her home outright and having the extra cash, she arranged for this mortgage to be finished at this time as is would coincide with roughly the time she would retire within a few months.

 

I have advised her to at least complain as she would most likely have continued to work for another year or so if they had informed her of this miscalculation earlier and I believe it to be at the very least unprofessional for them to miscalculate the repayments and not realise until just before the end of the loan term.

 

If it was just a couple of pounds increase and no extra payments then fair enough but this is rather a large mistake in my opinion, the extra £110 per month over the new term they have calculated is an extra £2k+ not taking into account the extra 7 months of the current payments she is making!! In total she will be paying over £5k extra on top of what was originally calculated.

 

Is there anything she can do about this other than send a strongly worded complaint?

 

My mother has now had a response to her complaint, I personally don't believe that the response offers any explanation whatsoever but Nram have stated that this is their final response to the complaint.

 

The letter she has received simply outlines her original complaint points then continues to summarise with the following:

 

Your mortgage with nram commenced on xxxxxxxxx (date). You initially borrowed £xxxxxx over 10 years.

 

On xxxxxxxxx (Date), you borrowed a further£xxxx.xx and were offered a fixed rate deal of 4.89% over 7 years, your mortgage term remained unchanged at 10 years from commencement.

 

On 15th August 2012 on 12 July 2012 (copied exactly as printed on the letter???) we wrote to you and confirmed that the increase in monthly payments following expiry of your fixed rate period was due to the outstanding fees that were added to your mortgage balance on completion but had not yet been repaid.

 

The dates and the amounts on the first two lines are irrelevant and have therefore been blanked out but they are stating that the increase has something to do with fees that they have informed my mother about. I have the letter that they state they sent on 15th August 2012 in front of me and nowhere does it mention fees that have yet to be paid.

 

Along with the letter they have also sent a copy of the original application form my mother used to apply for the mortgage, thye only fees mentioned on this form are valuation/administration fees which were paid by credit card at the time of the application. No other fees are mentioned.

 

They have stated that the fixed rate deal of 4.89% ended and the standard variable rate will apply to both the mortgage and the secured loan. The new rate as of 1st September 2012 was 4.54%!!!

 

Correct me if I am wrong as I am no mathematician but wouldn't a decrease in interest rate usually mean a decrease in monthly payment amount???

 

They have still to explain what these "fees" are as I have been through the paperwork thoroughly and I can find no mention of any fees needing to be added to the balance, but they have stated that this will be their final response!

 

I realise that it can be difficult to assess the situation without seeing the paperwork, I don't want to post too much publicly as its not my information to post but if there is anyone here who thinks they may be able to help I will gladly scan and PM copies of the paperwork as this is really starting to stress my mother out.

 

Sorry for the long post and I will be grateful for any help with this.

[sturose]

Ok, posting here now my original thread has been found. The other thread I started can be deleted.

 

 

 

 

My mother has now had a response to her complaint, I personally don't believe that the response offers any explanation whatsoever but Nram have stated that this is their final response to the complaint.

 

The letter she has received simply outlines her original complaint points then continues to summarise with the following:

 

 

 

Your mortgage with nram commenced on xxxxxxxxx (date). You initially borrowed £xxxxxx over 10 years.

 

On xxxxxxxxx (Date), you borrowed a further£xxxx.xx and were offered a fixed rate deal of 4.89% over 7 years, your mortgage term remained unchanged at 10 years from commencement.

 

On 15th August 2012 on 12 July 2012 (copied exactly as printed on the letter???) we wrote to you and confirmed that the increase in monthly payments following expiry of your fixed rate period was due to the outstanding fees that were added to your mortgage balance on completion but had not yet been repaid.

 

 

The dates and the amounts on the first two lines are irrelevant and have therefore been blanked out but they are stating that the increase has something to do with fees that they have informed my mother about. I have the letter that they state they sent on 15th August 2012 in front of me and nowhere does it mention fees that have yet to be paid.

 

Along with the letter they have also sent a copy of the original application form my mother used to apply for the mortgage, thye only fees mentioned on this form are valuation/administration fees which were paid by credit card at the time of the application. No other fees are mentioned.

 

They have stated that the fixed rate deal of 4.89% ended and the standard variable rate will apply to both the mortgage and the secured loan. The new rate as of 1st September 2012 was 4.54%!!!

 

Correct me if I am wrong as I am no mathematician but wouldn't a decrease in interest rate usually mean a decrease in monthly payment amount???

 

They have still to explain what these "fees" are as I have been through the paperwork thoroughly and I can find no mention of any fees needing to be added to the balance, but they have stated that this will be their final response!

 

I realise that it can be difficult to assess the situation without seeing the paperwork, I don't want to post too much publicly as its not my information to post but if there is anyone here who thinks they may be able to help I will gladly scan and PM copies of the paperwork as this is really starting to stress my mother out.

[sturose]

I thought I would come back and give you guys an update.

 

We decided to take the matter further and contact the ombudsman. After giving them all the details they then had to wait several months for NRam to submit the information about the mortgage account.

 

They found in favour of NRam!!

 

I wasn't taking this lying down, I encouraged my mother to push for the matter to be taken further because what they had stated to my mother and what they told FOS where in my opinion substantially different. They reviewed the case again, looked into it a little deeper and found that NRam had given misleading information (intentionally or not) and they were ordered to pay compensation. They were also ordered to recalculate the mortgage based on the new information from the time the property was remortgaged and refund any overpayment.

 

Result: Nearly £600 refunded. Not the biggest sum in the world but a substantial amount for a pensioner, also if they had done this to just a small percentage of people who had mortgages with them how much extra would they be raking in that people do not challenge. My mother was all but ready to quit as she felt she did not have the strength to keep fighting but it paid off.

 

Thanks for the help and advice guys.