Help! Redstone Mortgages Nightmare

[Commodityman1]

This is my first post here, and I am so pleased to find that I am not alone in having problems with Redstone Mortgages. My story is slightly different, although the conclusions are the same in that Redstone are currently trying to evict me under the terms of a SPO they obtained 5 years ago (2007). Let me explain.

 

I took out a mortgage with Rooftop Mortgages in May 2004. Almost immediately it would seem that mortgage was assumed by Redstone. I have no record on my file of ever having been advised of that change.

 

In 2007, I went through some bad times as a result of a client not paying an invoice in the sum of £75000. Redstone obtained a SPO against me for outstanding arrears which were fully repaid later that year. (I was working abroad at the time and so was unable to give full attention to this kind of stuff, please bare with me). ASt no point were they interested in offering any assistance whatsoever, rescheduling or anything.

 

In July 2008, I received a letter from Redstone telling me that from September 2004 to date (ie from inception to 2008) they have been calculating my mortgage interest using the wrong calculations, specifically saying (and I quote) that "interest has not been charged in accordance with the Terms and conditions of my mortgage". As things transpired, those were the only two accurate sentences of a long and confusing letter, although reading it again now I think it says they undercharged me but they will effectively swallow their loss because t was their fault. Don't worry, they said, everything will be ok from the next interest re-set day.

 

As I was working abroad, I had no idea about any of this, and didn't check when I came home which I did monthly for a few days at a time.

 

Zip forward to 2012, and I have alledgedly fallen into arrears again and they now seek to re-possess under the SPO of 2007, notwithstanding that I have had periods in the intervening time when I have not been in arrears.

 

A check of the statements and information I have to hand covering the last 4 years (my next statement is due in June) show the following:

 

- Notwithstanding the letter of 2008, my mortgage interest is still not being calculated correctly. It has therefore never been properly calculated since the day of inception.

 

- Whilst I may have missed some payments, in 4 of the last 5 years I have inadvertently overpaid my mortgage interest, on some occasions by up to £450 in a month. In those years, I have paid a total £134k in interest against a Redstone requirement of £130k, which in itself is considerably higher than it would have been had it been properly calculated.

 

- In one year (2010-2011) I overpaid Redstone to the tune of £6700, for the year. Redstone's calculations on their own were £1300 higher for the year than they should have been based on a proper calculation. In that year, I missed 1 payment.

 

- In addition, Redstone have been charging me something called "Loan Interest Premium" of about £80 per month. This is outside the Terms and Conditions and I have no idea what this relates to. Recently it has increased by about £4 per month, but by and large it is a fairly static figure.

 

- They have also charged me all the fees referred to within the FSA statement against Redstone, but they have made no attempt whatsoever to redress that particular situation. I only became aware of this this week.

 

My mortgage is interest only, 3mth Libor resets, calculated on a 30 day month, 360 day year. This is not a difficult calculation, and should result in monthly interest being exactly the same for 3 months at a time. At no stage in any of the last 5 years, has the interest payment required by Redstone been the same two months in succession. To me this is a sure sign that the calculation is wrong, and I wish I had noticed it sooner. I would have done, had I not been abroad.

 

The result is that they are seeking re-possession and yet on the basis of mis-calculations THEY OWE ME £13,500+ for 4 years alone. I will be unable to calculate the full amount till I get the full file from them under SAR. The whole thing is an utter mess.

 

This note has gone on a little longer than anticipated, but can anyone provide some guidance please.

Edited May 19, 2012 by Commodityman1

[AndyOrch]

Hi Commodityman and welcome to CAG

 

I will move your thread to the appropriate forum for direct advice.

 

Regards

 

Andy

[Ell-enn]

Hi, you say they are trying to evict you - have you received an eviction notice?

[Commodityman1]

Yes, one has been issued and I have submitted the form N244 (I think it is) requesting a review (sorry I cannot recall the correct phraseology) to try to prevent it.

[Ell-enn]

What did you put in Q10 of the N244? did you quote the Norgan case law and also affix a budget sheet ?

[Commodityman1]

I kept all phraseology very general, and didn't mention the Norgan case. To be honest I've never heard of that, but have just looked it up. I haven't provided a budget sheet either.

 

What I have done is this. I have taken data from my mortgage statements and formatted it differently, so that it shows Interest rates (compared with historic records) and confirmed against the Redstone rates. These are broadly acceptable. I have then calculated the monthly payable amount using the methodology referred to in the Terms and Conditions of Mortgage (clearly defined) and the results are wildly adrift. I have then shown the payments that I have made on an annual basis, against these.

 

For three of the last four years, I have inadvertently paid in excess of the Redstone requirement, mostly at their insistence, and well in excess of the requirement had Redstone calculated the figure correctly. The one year where there was a negative in this figure (2008-2009) is more than adequately covered by 2009 and 2010 where the surplus is a combined £13k or so, all due to mis-calculation.

 

From the spreadsheets I have prepared, it is possible to see that there is a substantial "prepayment of interest" (for want of a better description) which when combined with the Loan Interest Premium (which I mentioned and for which there is no provision in the T's and C's) and the fees that they should be re-imbursing in the context of the FSA findings, more than covers what they say I'm in arrears now.

 

Questions:

 

1. Is this spreadsheet as I have described, the same as what you call a budget sheet?

2. Would I get anywhere in a court by bringing this all out in the open?

3. What would be the optimum approach?

 

I can demonstrate affordability of the mortgage going forward, and haven't shown any of this to Redstone- I see no benefit in doing so as they always say they require a 5 day turnaround time, and refuse to be contactable by email. In addition, there is no mechanism for complaint on the Redstone website.

[Commodityman1]

I should have added that the figures quoted in the interest re-set notices that are sent out quarterly, whilst accurate in terms of interest rates, bare no reflection to the amount that they actually debit to the account. This whole thing is an absolute mess!

[Ell-enn]

Hi, your spreadsheet will certainly support your case. From your calculations are there actually any arrears at the moment ?

[Commodityman1]

Quite possibly although its difficult to tell, since the annual mortgage statement (which provides all the background evidence) doesn't become available till next month. There have been missed payments in this calendar year.

 

In my view, the payments "made on account" as described counter-balance any current arrears anyway but I'm unsure how this would stand up in court? I mean, how can someone be in arrears if the payments have been miscalculated and payments are effectively made in advance as a result?

[Ell-enn]

When is the hearing ?

[Commodityman1]

Monday.

 

I have done a huge amount of preparation for this, and there is a possibility that I will have uncleared funds on my account to cover the arrears in part by then, but I want to ensure that I present my case in the best possible way.

 

I have worked in the banking sector in the past and fully understand Redstone's game. This organisation is a SPV set up with a key purpose in mind, which was to trade in and benefit from the Mortgage Backed Securities market. The intent is clearly documented in the Directors comments section of the most recently published audited accounts which can be obtained free by logging into the duedil.com website and registering for free (just type in their name and download the required documents- you don't need to be able to read accounts to follow this). Following the financial crash, there is no mortgage backed securities market anymore and this is unlikely to ever return. As the commentary says, they must therefore hold the mortgages till maturity. They must know that the majority of their customers are unable to remortgage in the current environment, and presumably wish to reduce their commitment in this market as quickly as possible as holding the mortgage portfolio is not an attractive proposition. They have not been providing any new lending for quite some time.

 

They are backed financially by Unicredit Bank, one of Italy's largest, to the tune of $1.3bn (I think its dollars) something that is also referenced in the report and accounts. Unicredit have been adversely impacted by Eurozone issues and on the face of it have their own issues. To see this, google Unicredit share suspension and have a look at the BBC article (I cannot post the link here).

 

Redstone have no employees and outsource their mortgage admin work to either HML or Unicredit staff (I'm not sure which). They have four Directors, of whom one has 31 other directorships including a pub in West London, and another which is basically a company registered to a house in Weybridge, Surrey. All this is publicly available information, and the FSA warning also provides some confirmation of some of these matters. Its is stunning that an organisation with this kind of profile is permitted to "trade" in the fields in which it does (although it is not really trading anymore in the recognised way).

 

Thanks for all your feedback, all further guidance welcome.

[Lea_HTH]

Don't get bogged down in all the extraneous stuff that you have posted in your last post above. It's entirely irrelevant to a repossession hearing, and in reality is almost certainly irrelevant in relation to a full trial - if you were ever to get that far (unlikely).

 

The hearing on Monday will assess whether or not the claimant has proved their case. Are you in fact in arrears - they will need to provide a statement of account showing all payments due and all payments missed. If you wish to dispute this, you will present the spreadsheets you made reference to in an earlier post.

 

The likelihood is that the judge will adjourn for the claimant to provide further information of where and how the account fell into arrears, since you are disputing their claim. However, if their up to date statements show that you are in fact in arrears, then you'll need to provide some offer of clearing those arrears in the remaining term of the mortgage.

 

Your dispute over the way the interest is being calculated is going to require a direct complaint to the mortgagee, who are obliged to investigate and provide a response. If you are not satisfied with that response, then you can complain to the Financial Ombudsman. Thereafter you have recourse to the courts.

 

The possession hearing judge almost certainly won't be interested, and even if he is, he won't have time, in a five minute possession hearing to go into detail. He won't thank you for trying to side-step the actual issue at hand either.

 

Stick to the facts - you are disputing the alleged arrears based on your spreadsheet calculations.

[Commodityman1]

Thanks very much for your guidance, Lea_HTH, this is most helpful.

[Commodityman1]

just out of interest, is there any right of appeal at this stage? and if so, who do you appeal to?

[Lea_HTH]

You have made a stay application for an eviction. If your application is dismissed, asked the judge if you can appeal.

[mercyblue]

You state that this is a interest only mortgage surely then all you have to do is take the historic libor rates to calculate how much cmi you should have paid or is this what you have already done?

[Commodityman1]

Yes, that's what I did...

 

Its actually pretty easy to calculate the proper amount versus what I have been charged. There is a disparity between the two, in favour of Redstone.