Kensington Charges

[supersleuth]

Hi Woowa5

 

It may also be worth taking it up with the Office of Fair Trading too. This is because, the FSA may tell you that they only take case of "FSA regulated mortgages". In general all residential mortgages that are taken out after 31 October 2004 are FSA regulated mortgages, and mortgages prior to that date were regulated through the OFT.

 

In principle, the FSA should take up your complaint as they regulate the administration of mortgages anyway and on that ground alone the FSA should take up and assit you with your complaint.

 

The OFT still issue the credit licence to lenders, so a complaint to the OFT will alert the OFT that they should think about whether or not Kensignton should have their licence revoked. Point is, no harm in giving it to Kensignton on both fronts.

 

Oh BTW Janus - great supersluthing work!!!

 

Good luck

[jansus]

I have got to say that was an old document I found - but it is very difficult to find anything concrete and I still think it depends on the individual contract - but I would definitely be pursuing it on thew chance it is an unfair term especailly if it does not make it clear it is payable if the property is re-possessed.

 

Nothing ventured nothing gained - so worth a try.

[jansus]

I have sent a general question email regarding ERC and possession to the FOS and FSA so lets see if I get a reply. If I was you I think I would contact Kensington - SAR ( did we say that before?) and ask for a copy of their complaints proceedure.

 

It is important that you follow that ( if they have one!) You have to give them a chance to rectify first . I would be trying on the basis that an Unfair T&C as the ERC has been taken on possession of the property - which was not explained to you at the time of taking out the mortgage.

 

What does anyone else think?

 

Jan

[jansus]

Taken from

 

http://fsahandbook.info/FSA/html/handbook/MCOB/12/3

 

MCOB 12.3 Early repayment charges: regulated mortgage contracts1

 

MCOB 12.3.1 Early repayment charges to be expressed as cash and to be reasonable

 

A firm must ensure that any regulated mortgage contract that it enters into does not impose, and cannot be used to impose, an early repayment charge other than one that is:

(1) able to be expressed as a cash value; and

(2) a reasonable pre-estimate of the costs as a result of the customer repaying the amount due under the regulated mortgage contract before the contract has terminated.

 

MCOB 12.3.2 A firm can choose the method it employs for calculating early repayment charges in accordance with MCOB 12.3.1 R. A firm should not use the 'Rule of 78' (as contained in Schedule 2 of the Consumer Credit (Rebate on Early Settlement) Regulations 1983), which is not appropriate as it effectively overstates the cost to the mortgage lender.

 

MCOB 12.3.3 A firm may calculate the same level of early repayment charge for all regulated mortgage contracts of a similar type (for example a tranche of regulated mortgage contracts offering a particular fixed rate of interest), rather than on the basis of the individual regulated mortgage contract with the particular customer.

 

MCOB 12.3.4 Early repayment charges to be disclosed in illustrations

 

Before: (1) entering into a regulated mortgage contract with a customer; or

(2) making a further advance on an existing regulated mortgage contract; or

(3) changing all or part of a regulated mortgage contract from one interest rate to another;2 a firm must disclose to the customer:

(a) in the illustration provided in accordance with MCOB 5, MCOB 7.6.7 R, MCOB 7.6.18 R, MCOB 7.6.22 R, MCOB 7.6.31 R, or MCOB 9; and

(b) in the illustration provided as part of the offer document in accordance with MCOB 6.4.1 R(1) and MCOB 9.5;

the maximum amount payable as an early repayment charge in respect of that regulated mortgage contract, if an early repayment charge applies.

 

************************************************** ************************************************** *******************

************************************************** ************************************************** *******************

 

 

Taken from

http://fsahandbook.info/FSA/html/handbook/MCOB/12/4

 

MCOB 12.4 Arrears charges: regulated mortgage contracts1

 

MCOB 12.4.1 (1) A firm must ensure that any regulated mortgage contract that it enters into does not impose, and cannot be used to impose, a charge for arrears on a customer except where that charge is a reasonable estimate of the cost of the additional administration required as a result of the customer being in arrears. 2

(2) Paragraph (1) does not prevent a firm from entering into a regulated mortgage contract with a customer under which the firm may change the rate of interest charged to the customer from a fixed or discounted rate of interest to the firm's standard variable rate if the customer goes into arrears, providing that this standard variable rate is not a rate created especially for customers in arrears.

 

MCOB 12.4.2 A firm may calculate the same level of arrears charges for all regulated mortgage contracts where the customer is in arrears, rather than on the basis of the individual regulated mortgage contract with the particular customer.

 

MCOB 12.4.3 Firms are also subject to requirements on information provision and standards relating to arrears and repossessions (see MCOB 13 (Arrears and repossessions

[jansus]

Now I guess the question is - was yours a regulated mortgage contract?

[woodwa5]

how would i find that out?

[jansus]

Not sure

 

As kensington are a sub prime lender I think? But if you click the blue link it has a description.

 

I will come back to you tomorrow

[jansus]

Hi Had not forgotten you:)

 

I am afraid I have no definite answers but form my posts above it looks like this could be an unfair term.

 

Also referring to post 29 did Kensington get a money order judgement from the court for the final amount do you know?

 

I think we need a little help on how we approach this - so bumping your thread up as well.

[jansus]

Hi

 

Just to let you know I did not get a definitive reply from the FOS - in other words they look at every case on an individual basis - and I guess it would depend on what it said in the original contract. However the email did say that anyone who has a complaint of this nature should complete one of thier on line complaints forms - which wont cost you anything!

 

Also I have been checking on line and on MOST key facts the wording is the ERC is payable if the borrower chooses to repay the mortgage early.

 

As there was a previous legal case where the borrower did win his case ( apparently ) the IMO I would pursue this.

 

Which method is best ? I am not sure - but I would always advocate the correct complaints proceedure before going to court as I dont think the judges look favourably on people going to court without trying other methods first.

 

Sorry I do read lots of threads have you done a full SAR letter yet?

 

I think you need details of all charges as well to check those out.

[woodwa5]

I haven't had chance yet but will be doing it next week along with an sar for an unrelated ppi. Thanks for all the effort you have put in and i can see there is certainly some hope;)

[jansus]

Ok

 

I know it will all take time - but it may be worth it. At least the FOS did not say a straight No. chance

 

I will still keep trying to see if I can find out about the previos case law.

[credit allergy]

The stated case is Evans v Cherry tree finance where a court found the erc unfair. Although the creditor then appealed on different grounds. So without further investigation it isnt clear why lower court found it unfair. The regulations you need to use are The unfair terms in consumer contract regulations 1999. These provide a list of some terms which might be unfair including sums which are disproportianiate to losses. The OFT and FSA have published guidelines but as they state these are only their interpetation, the final decision would rest with a court. Therfore I think you should look at the regs and go from there. The MCOB does outline the rules for lenders since 2004. Some are statuory some just guidance. However the FSA deals with the lender so would not reclaim your ERC. The FOS as I understand it would get involved if you had cause to complain about companies actions. Finally check that the money judgement on repossession (although giving a figure) doesnt allow any further charges or interest to be added. hope this helps.

[jansus]

I was told there was a previous Nat West case as well which is why they made an undertaking not to charge the ERC on death or possession.

 

I am still checking.

[gizmo111]

This is the original Nat West claim http://www.consumeractiongroup.co.uk/forum/mortgage-companies/28200-first-successful-erc-claim.html

 

However you should be aware that others have gone into court in Jan and Feb 07 and lost the claim for ERC reclaims, and got ordered to pay quite hefty costs.

 

MaroonFox - £7500 - Mortgage Express

Jamorgan - £4500 kensington

Charbydis - £4000 Platform

Myself - finally negotiated down to £1000 to withdraw claim against Mortgage Express.

[jansus]

I understand what you are saying - but were any of those cases ERC in the event of possession or death of a borrower? I see the case you mentioned was not - which I am surprised at.

 

That was the undertaking that the FSA I think gave to Nat West.

 

I am not advocating going to court as I am not an expert in this area but if the KFI do not cover what happens to the ERC in the case of possession then could that be a case for at least trying the FOS?

[gizmo111]

The FOS is worth it as it costs nothing, without going through the threads I'm not sure if any of them were cases of possession, if I get time I'll have a read through later, although I have a feeling Jamorgans was a remortgage to avoid repossession.

[supersleuth]

Hi

 

FSA REGULATED MORTAGES.

 

An FSA Regulated Morgage is a mortgage that was entered into on or after 31 October 2004.

 

Therefore, if you entered into the mortgage before 31 Oct 2004, it is NOT an FSA regulated mortgage and

 

if you entered into the mortgage on or after 31 Oct 2004, then it IS an FSA regulated mortgage. In which case, you can use the MCOB rules that are quoted earlier in this thread and the case law cited in the earlier posts on this thread.

 

If the mortgage was entered into before the 31 Oct 2004, then you can use the case law cited in the earlier posts on this thread.

 

It is normal for lawyers to use the costs tactic to scare people off from asserting their rights. Most of the ERC's are unlawful and consequently, the lender's lawyers can only use the bully tactics of scaring you off with threatening costs. In my view, if that's their only counter argument then it shows the lender's know they have a weak case.

 

Nonetheless, everyone has to make their own choices based on the facts before them.

 

Good luck

Supersleuth

[jansus]

Just checking how you are getting on

 

The FSA did send me a long reply - basically referring to what UFTC are and how to complain . I will send you some details

[woodwa5]

I am doing very well, will be sending the S.A.R on Monday after having some last minute tinckering over the weekend

[jansus]

Stop paying them.... their next option would be to make you bankrupt, and you can then show the Official Receiver their statement, ask for the ERC to be removed from the equation (which they apparently can do - it was done to a family member recently and lessened their debt by around £12K) and then Kensington will be the sorry ones.

 

Really you have very little obligation on a mortgage shortfall, especially as they have taken ERC, and also possibly have claimed on any insurance policy as well... this is NOT a priority debt any more and should not be treated as such.

 

 

Silly Girl do you have any more details on the case where the ERC was removed from the equation? Was this done through FOS ?

[sillygirl1]

Jansus, the person did go through the FOS, and it was deemed that as there was only three months before the ERC should have expired the claiming of this was 'not in the defendants interest' and put the lender in a far more stronger position than they should have been (in this case only three payments had been missed). It was a couple of years ago now but I can see if I can get you the reference from them for this... cant make any promises though coz they've lost a lot of the paperwork in between.

[jansus]

Thanks , that answers my question really that the FOS would be the way to go if people do wish to try and claim . And in this particular case it was towards the end of the ERC period.

 

Thanks for that.

[woodwa5]

I saw this elsewhere on the forum but thought I would let you all know in case you hadn't

 

BBC News - Kensington mortgages fined by FSA for unfair fees

 

Let's see what happens

 

Keep it lucky

 

Woodwa5:cool:

[annie s]

interesting but no sign of a "dedicated helpline" yet to let them know of my current address to send what they owe as we had to move due to reposession

Is anyone aware of a number?

[woodwa5]

there is some info on the Kensington web site:

 

http://www.kmc.co.uk/spool._2f_kensington_2f_pdf_2f_customers_23_95574_23_File-MediaFile.pdf