GE Money - is reoptimisation installment legally part of the CMI or not?

[ianmaskell]

Hello all.

 

I hope someone can give me a bit of advice as

 

 

I am trying to help someone who has got themselves in a right pickle.

 

 

I'll give the background firstand then the current situation if that's ok.

 

 

Please bear with me if I ramble on but tryingto give as much details as possible up front.

 

An ex of mine from many year's ago has a repossession date for this comingTuesday at 10.15am.

I have remained extremely close and we are more like siblings than friends,

indeed I am Godfather to her children aged 6 and 3.

 

She has a first mortgage with Birmingham Midshire for £182,500 which is up to date.

She also has a secured loan from GE money which was originally for £35,000 but now stands at around £55,000.

 

When she took out this loan she was still with the father of her two children

and there were two incomes in to the household.

 

 

However shortly after discovering she was pregnant in early 2009 the father walked out.

She effectively went in to breakdown and stopped making payments on any bills

and stopped working or even claiming benefits she was entitled to.

 

 

Both companies applied seperately for repossession in August 2009.

 

 

She cleared the arrears with BM but GE just cancelled their repossession.

 

 

Foolishly she did not make any payments on this account but continued payments to BM.

 

 

Head in sand syndrome because she says theywere asking her to repay more than she could afford.

 

Currently she has not made a repayment since April 2009 and has arrears of £15,500 plus fees of £7,500.

 

She finally came to me in desparation and explained the situation last week.

I got her permission to speak directly with GE and have done so last week to try and resolve the issue.

 

The property would only make £190,000 as a distressed sale so with fees

and BM's first charge there is nothing left in the property for GE should they repossess

but they do not seem to care.

 

 

I have offered to maintain the payments and even pay off the arrears over 4 years but they still refused.

 

 

I even tested them further and offerred a lump sum of half of the arrears

which I could pay on Dec 1st from my annual bonus plus £500 per month against a payment of £329.

Again they refused saying that the entire arrears plus fees had to be cleared.

 

 

What little I do know was that you can't repossess for fees only arrears and pointed that out and they backed down.

I also pointed out on her statement that they have taken £650 of payments against fees already

which I didn't think they could and questioned.

 

 

They told me I was mistaken even though I had it in writing in front of me.

 

I have a well paid job and ( not bragging so please don't hold it against me) take home over £4,000 per month.

 

 

Realistically I could go as high as £1,000 per month to clear her arrears I suppose.

 

back to the breakdown part.

SHe struggled through and after much persuasion from family and friends

she finally went to her GP about her state of mind in April 2012.

 

 

She was immediately referred for ongoing cognitive therapy treatment and prescribed anti depressants which she is still receiving.

 

 

I made GE aware of this and they wanted proof.

I got her permission and sent through the documents by fax which GE mysteriously said did not arrive!

 

that is the situation and I have an N244 in front of me that I am going to go to court with first thing in the morning to await a hearing.

What line should I take on this?

Would it be worthwhile pretending that we are in a relationship so my income could be taken into consideration

or would my current offerto give her the money suffice?

 

If a repossession does take place I am really worried that this may push her over the edge of what is already a strained existance for her and her children.

 

All help greatly appreciated and sorry for such short notice.

 

 

Finally if I am in the wrong place and anyone knows where would be better to ask please let me know.

 

Many thanks

 

Ian

[ianmaskell]

Ok so I went to court withmy friend this morning and submitted the N244.

 

 

The clerk gave us a hearing for tomorrow at 10am.

 

 

Does this mean the eviction is suspended as it is due at 10.15!!

 

Also if she loses the hearing, does this mean the bailiff will then enter the property or does a new date have to be set?

 

Any help is much appreciated.

[ianmaskell]

She has just rung the bailff and been told he will be waiting at the property with the locksmiths as planned.

 

 

She has gone into meltdown again understandably and is right back in the mental state she was before receiving treatment.

 

I am trying to help as best I can but I'm no expert.

 

 

I just hope I'm not making matters worse.

 

 

I couldn't bear to see those kids come home tomorrow to find they've lost their house!

[Ell-enn]

Hi there,

 

 

it is usual for the court to advise the bailiff that there is a hearing planned for the same morning as the eviction

and therefore the bailiff will be instructed to wait for the judge's order after the hearing before attending the property.

It is quite probably that the bailiff wouldn't have had the formal notification from the court office when she rang him.

 

What did you put in Q.10 of the N244 ?

 

 

did you ask for the Norgan case law to be considered together with The Adminisration of Justice act?

[ianmaskell]

Hi there, it is usual for the court to advise the bailiff that there is a hearing planned for the same morning as the eviction and therefore the bailiff will be instructed to wait for the judge's order after the hearing before attending the property. It is quite probably that the bailiff wouldn't have had the formal notification from the court office when she rang him.

 

What did you put in Q.10 of the N244 ? did you ask for the Norgan case law to be considered together with The Adminisration of Justice act?

 

Yes I put both of those in and explained the history of her case.

 

 

The offer put forward would clear the arrears in 7 years with 18 remaining on the term at 500 per month.

 

 

I could go to 1000 per month if needs be which would clear the arrears in 2 years or so but would rather not pay that much.

 

 

Another point I raised was that her 3 year old will receive free child care from January enabling her to work part time and as such have more income.

[Ell-enn]

Did you affix a letter signed by yourself stating that you would be contributing to the mortgage ? Are you accompanying your friend to the hearing? you will need to let the usher know when you arrive at court

[ianmaskell]

Hi I didn't do a letter but I did an income expenditure sheet for both of us so that it demonstrates my disposable income as hers is non existant currently. I was also planning on taking my wage slips as evidence of my income.

 

I wil do a letter tonight to take tomorrow. Do you mean tell the usher I am accompanying her? If so I will.

[Ell-enn]

Yes, tell the usher you are accompanying her - as the mortgage is only in her name you will need permission to accompany her into the hearing.

[ianmaskell]

I have a letter from her which I used with GE to gain authority to speak on her behalf. Someone mentioned to me that I should do a deed of assignment request but I'm not sure what that entails?

[ianmaskell]

Well we met with GE's solicitor before the hearing and put forward an offer of £1000 per month which was £329 towards the payment + £671 towards the arrears. GE rejected this proposal so we went into court.

 

The judge asked for the facts from their solicitor and then asked for my proposal. I stood firm and offerred the original payment of £500 (329 + 171 towards the arrears)

 

He asked the solictor how long that would take to clear the arrears and how long was remaining on the term.

 

He then declared that as the arrears would be cleared within the term of the mortgage he had no option but to suspend the eviction. He didn't really want to hear anything else.

 

I firmly put it down to quoting the Cheltenham & Gloucester v Norgan case in my statement. What a God send that information was.

 

Thanks to everyone for your contributions and advice, much appreciated.

 

Oh to be a fly on the wall in the GE office when they are told after rejecting £8,000 up front and £500 per month then rejecting £1,000 per month!

 

Now to chase them for unfair charges and PPI.

[Lillibelle]

Congratulations and well done you've proved to be a damn good friend,,,so pleased it's worked out

[Ell-enn]

Excellent news - well done!

[jh35]

Well done, im fighting GE at the moment, however my loan matures in November, my arrears are 2400, im in court next Monday, so hopefully i can get this sorted.

[ianmaskell]

Hello friendly CAG users.

 

 

I last came on here a couple of years ago and received some excellent advice to get a mortgage possession suspended for a friend of mine.

 

Since then she was hauled back to court again last September by GE over "sporadic payments".

 

 

I went with her again and the judge once again suspended the order.

 

 

As the arrears had been significantly reduced and the payments were up to date despite them coming at irregular intervals.

 

One of the topics of confusion was the actual ruling by the court.

 

 

Originally in 2012 I thought it was agreed that £500 should be paid per month.

This would have cleared the entire loan plus arrears well within the life of the mortgage.

 

However due to Loan Reoptimisation payments the amount increased according to GE so there was a shortfall in the monthly payment.

 

However the ruling was for CMI (Contractual Monthly Installment) plus £177.94.

 

The account has a monthly installment of £271.17

The account has a Loan Reop installment of £83.24

 

Is the loan Reop part of the CMI as it seems that GE are charging twice for the arrears.

 

 

The amount set by the court and their Loan Reop amount.

At this rate the loan will be cleared including arrears some 6 years before it is due???

 

Does anyone know if the Loan Reop is actually part of the CMI?

 

Thanks for your help I hope you can understand.

[f16]

What you should do is send an SAR and claim all the charges back.

[ianmaskell]

Thanks F16 that is the intention

 

 

I believe once her life is a little more settled.

 

 

But for now I'm trying to save her some monthly outgoings as it's a real struggle.

 

 

GE have gone for a repossession again and

 

 

I'll be filing an N244 for her on Monday as once again she is up to date despite sporadic payments.

 

The thing is I noticed going through her account statement is that if the Loan Reop had not been taken

she has actually overpayed what the court stipulated by around £1600 over the two years

and has never been more than £92 behind which was only for a couple of days.

 

I just need clarification of whether the Loan Reop is classified as part of the CMI or not for now.

[f16]

ianmaskell,

"I don't do the Legal Bit" !!!!!!

 

I've hit the "triangle" for assistance for you.

[dx100uk]

for the sake of history

 

 

I've merged your old thread

 

 

the team will be with you soon.

 

 

regards

 

 

dx

 

 

PS ...you really need to action those arrears and penalty fees.

 

 

I'm also not up on terms used with mortgages..

 

 

what do you mean by 'loan reop?'

 

 

dx

[ianmaskell]

Thanks dx100uk.

 

The "loan reop" is the term GE use on their statement for Loan Re-Optimisation.

 

 

I think it is an additional payment they add on each month with will clear the arrears within the life of the mortgage.

 

 

I'm fairly sure that this is not a legally binding contractual payment

or part of the Contractual Monthly Instalment

but really want someone who knows for certain.

[dx100uk]

if you had a court order to pay £XYZ every month

and you stuck by that

 

 

they cannot vary it as far as I know?

 

 

dx

[ianmaskell]

Yes I know but the court order was CMI + £173 (or thereabouts) Not a fixed total sum.

 

I need to know if their reoptimisation installment is legally considered part of the CMI or not.

[dx100uk]

I have alerted the team so hopefully someone will pop in

 

 

dx

[Ell-enn]

Hi, is there a separate contract/agreement for this Loan Reop account ?

[ianmaskell]

Hi Ell-enn

 

No they just started adding it as a payment once the account went into arrears. The amount is exactly the amount it would need the monthly payment to increase by to clear all the arrears within the full term of the mortgage.

 

i.e. the outsanding balance plus the arrears with interest over the remaining term.

 

My understanding from background reading is that GE add this as they consider it good practice so that the customer does not have a lump sum to pay at the end.

 

My point though is that if the court has already ordered the arrears to be paid off at a set amount, GE surely shouldn't be adding their own schedule on top of that.

 

But I need to know what the court will consider the CMI to be regarless of what I think it should be.

[Ell-enn]

I'll try and find out for you