Am i thick

[ims21]

Hi

 

They will have 8 weeks from the date of receipt of the claim to give you a final decision before the matter can be referred to fos.

 

What you should expect back is the entire premium plus the interest you would have paid through your monthly payments plus 8% on those payments made running from the date of payment to the date of settlement.

 

In addition it is likely that you would have overpaid the PPI on settlement of the loan, even if they did give you a rebate, so you should get interest on that as well.

 

Very difficult to be precise as you haven't quoted any figures for PPI above.

 

I hope you kept copies of the documents you sent this claims outfit. Sadly I thyink it is too late to get out of the contract you have with them.

 

ims

[ims21]

Hi

 

Some and some really....what are the reasons given for the mis-sale?

 

ims

[ims21]

OK

 

They are good enough reasons.

 

ims

[ims21]

Hi

 

Yes I'm in the wrong business

 

These claims companies do talk drivel. Prior to January the FSA granted extensions of time but from January it is back to the standard 8 weeks.

 

I would wait the 8 weeks and see what happens. It is your decision as to whether to pass to fos or not, not theirs.

 

ims

[ims21]

Could be...wait and see what turns up

[ims21]

Hi

 

Got your PM......just going to have some nosebag and will be back a bit later

 

ims

[ims21]

Hi

 

Yep....nosebag....food

 

Ok so in answer to your PM questions.

 

They have made an offer for the years paid before this was taken over by a mortgage. That principle is correct.

 

You would get back the amounts actually paid towards the PPI part of the loan plus the interest paid on that and 8% on each payment actually made running from the date of the payment to the date of settlement.

 

Now, when the loan was taken over by the mortgage, part of the balance taken over would have been the remaining PPI on the loan, less any rebate that may have been given (I would suggest that no rebate was given).age

 

So you had to borrow extra money on your mortgage to pay off part of the PPI on the loan. This is why they are saying that there will be an adjustment to the mortgage, to remove the residual PPI from it.

 

This is all based around the underlying principle that you must be put back in a position that you would have been in had the PPI not been added in the first place.

 

In order to work out the figures to see whether their offer is correct we would need the figures from the agreement. I see you were going to ask for the return of that document....did you ever get it back?

 

ims

[ims21]

Hi

 

Ok I'll answer the questions in reverse order

 

The taxable portion of your award is only the 8% statutory interest...not the rest of it.

 

You will pay the claims company a percentage of the entire claim amount, both the physical refund and any adjustment made to the mortgage as a result of the residual PPI. So in effect this is the premium in full, the contractual interest paid and the 8%.

 

Now the bit that needs more work. Can you tell me whether your mortgage is a repayment mortgage or interest only?

 

The lender should put firm figures to you before you accept. It is not right that they say we will adjust the mortgage upon receipt of your acceptance if they haven't told you what the value of the adjustment is going to be. Bear in mind that if you have been making mortgage payments then the PPI part of those payments should come back to you by way of refund plus 8%. It is the future payments that should be affeceted by an adjustment to payments.

 

It is not possible to work out exactly what you should get back unless you can get that loan agreement back

[ims21]

Yes but part of that mortgage would have included residual PPI from the first loan and therefore you have been paying PPI on loan 1 through your mortgage.

 

Think of it this way...

 

You have a loan for £9,000 with PPI of £1,000 added to it so a total of £10,000 which you pay off at, say £100 per month. Let's assume the loan is interest free to avoid complication.

 

You make 10 payments and then convert the loan to a mortgage. 10 payments would mean you will have paid £1,000 off the loan leaving a balance of £9,000 which is refinanced into a mortgage. Part of that £9,000 is the PPI part of the loan.

 

In this example the PPI is 10% of the total loan so 10% of that £9,000 balance is the PPI part of the loan which of course is £900.

 

So if that PPI hadn't been in the loan to start with then you would have had to borrow £900 less on the mortgage to pay off the first loan.

 

So the fact that you had to borrow £900 more to pay of the PPI part of the loan means that some of the repayments you are making on the mortgage include a percentage towards that £900 part of the first loan.

[ims21]

If I read you right then no it isn't (unless there are arrears on the mortgage)

 

Any payments you have actually made towards the PPI should come back to you, both with regard to the original loan and the mortgage.

 

The adjustment to the mortgage should be for the, as yet, unpaid part of the PPI.

[ims21]

Yes but that settlement of the loan included the settlement of the ppi part of the loan. If that PPI hadn't been there in the first place your settlement figure would have been less and so would your mortgage.

 

Your mortgage loan is higher as a result of having to pay off a ppi that shouldn't have been there.

 

Consequently your mortgage repayments are higher than they would have been. As a result you have been paying too much on your mortgage up to now as a result of that PPI. If no adjustment is made to the future of the mortgage then you will still be paying too much so your future mortgage payments have to be reduced to avoid you continuing to pay that higher amount

[ims21]

and besides i think the offer is fair just not how tey are paying it

but if i go fos will take ages so probably best just appcepting as need the dosh and could do without another 6 month wait

 

At the end of the day its your call but of you can get that agreement back we should be able to work out what should be happening and the amounts involved.

[ims21]

Broadly speaking yes but the method of redress in these types of cases is set out by the FSA/fos and the bank should adhere to those principles.

 

I have to say, if it were me, I'd want to check the figures properly before accepting.

 

We never trust a bank !

[ims21]

No need....when that agreement comes back we can work out what you should physically receive and what the adjustment to the mortgage should be.

 

Tectonic plates move faster than fos so I wouldn't bother with them if I could avoid them

[ims21]

Sorry..they are the plates that form the earth's crust. They move slowly, grind against each other, build up pressure and when they release we get an earthquake.

[ims21]

If the offer letter doesn't give the full picture as to how they propose to deal with it then you need to ask the questions of them so that you are completely clear on how they are dealing with this refund.

 

If they are proposing to pay some of your refund to the mortgage then that is wrong unless you have arrears.

[ims21]

And get it all in writing too

[ims21]

Good on you.

 

In a situation like this it is always good to have your own workings to hand because it can strengthen any argument you have

[ims21]

Ok will look this evening

[ims21]

Ok now we know what the PPI premium was to start with, the figures we have at the moment do not stack up.

 

Did you get any rebate of PPI when the loan was paid off by the mortgage. If so, how much was it?

 

If you haven't got that information or figure then you need to ask them the question.

 

ims

[ims21]

What doesn't add up is the fact that your premium alone was just over 6k.

 

In total they are offering you 3.4k ish plus 1.7k ish which is 5.1k and that includes interest.

 

When a loan is settled early then yes rebates on PPI are generally calculated although not all lenders played fair with the rebates. If they gave you a rebate then their offer figure would be closer to what it should be but without that rebate figure we can't check.

 

Might be worth a phone call to the lender to ask the question.

[ims21]

Your letter should just ask them how the figure of £1,700 is calculated (you want to see the calculations).

 

In addition yur letter should ask them what about the contractual interest you have paid on the PPI sum included in your mortgage AND what about the 8% on those payments as well.

 

The amount of £3,400 odd they have calculated up to the date the loan was settled is bang on.

[ims21]

Have a go, post it up and we can review it

[ims21]

Letter starts Dear Sirs

 

First paragraph says that they haven't given you enough information as to whether you can accept their offer or not. Tell them that you are willing to accept an offer when they provide the following further information.

 

1 The settlement statement for the first loan showing the settlement balance on the loan and details of any rebate of PPI given at that time.

 

2 Their calculations as to how the £1700 mortgage reduction figure is arrived at

 

3 Their proposals for refunding the extra interest charged on the mortgage account as a result of PPI a ppi balance being included in it from the start.

 

 

You then finish by saying that if they provide all of that data the likelihood is that agreement can be reached but if they fail to supply you with adequate calculations and evidence you will refer the matter to fos who will undoubtedly require them to provide it and it may cost the £850 for a case fee as well. They can avoid this by providing you with the information now.

[ims21]

You can mention as another point that you are reminding them that all payments and interest actually made by you must be refunded to you.