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Unlawfully withdrawn Mortgage Reserve Account


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We need to know what how the bank calculate any sum they are pursuing the OP for (broken down into “arising from the £24,140” and “arising from original mortgage”)

The OP can deny any liability for the former, based on

A) the bank’s erroneous release of those funds, that didn’t benefit her, and

B) (proprietary) estoppel from their letter agreeing they wouldn’t pursue the OP for the capital and interest resulting from hose funds.

 

OP: what is the current problem, and what outcome are you seeking?

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The estoppel only arises if they decide to sue her in which case she can run it as a defence. This would be an excellent option if they consider that in some way she is still liable for the £24,000.

 

I also would like to understand what the current problem is. Why has she actually lost and what is she seeking.

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Some clarification, if that would help - Mortgage Current Account and Mortgage Reserve account are two separate accounts, with separate account numbers, and separate statements. (I hope that at least this makes the situation a bit easier)

 

The outcome I am looking for (I need help for the wordings please) - I want my name, as well as the main mortgage, off this debt (withdrawn reserve account). I did "shout" as soon as I spotted the transaction. It is not my fault there was a problem in the system of the Bank! It is not my fault that the Bank's procedure for starting an investigation was 8 weeks after the incident. This is ridiculous!

I want (need to!) to re-mortgage but I am not prepared (why should I be?) to absorb the withdrawn by Mr amount and interest.

 

I have made a few attempts to find out what actions is the bank taking to retrieve the money from Mr. No success. Data Protection is the excuse. I fear it is lack of any action. Bank is relying on having this account (Reserve) secured to the main mortgage, and I doubt they are doing ANYTHING to retrieve the money from Mr.

 

The Bank has made a mistake! Should bear the consequences if cannot rectify it! (Do we live in the Wild West!)

 

You see from Barclays 2018 letter that the mortgage period is finishing on 16 July 2023. I am still paying the interest amount only, as now again the other party's agreement is required to convert it back to repayment.

Mr has not contributed anything (I mean "positive") towards the mortgage re-payments.

 

Will it help, or will it bring even more confusion, if I remind you that I have already been to a Re-possession hearing?

 

In 2008, as a result of built up arrears, the Bank's system had automatically issued Re-possession proceedings. (As suggested by and agreed with the bank, I was paying regularly some £600 per month. The bank was willing, but Mr was refusing to agree, to switch temporarily to "interest only" option. Arrears were built up by the difference between what I was paying and what was originally agreed.)

 

The Bank had omitted/forgotten/thought was unnecessary to inform their counsel about the letter dated February 2008. It appeared to be a turning point. The Judge took it into account. He ordered me paying £32-£34 (I don't remember the exact amount) towards the arrears (of about £8,000) and dismissed the Proceedings. ( I have repaid the remaining arrears in full later on as soon as I had available funds).

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Can I ask now if you know what Andyorch meant in his post of 8/5/2018? I am unable to open the link, he had kindly enclosed. Is there any new legislation coming into force in 2 weeks tome?

 

Is there any option to sui the bank for Negligence or is it more an Unfair treatment?

 

Should I have gone to the local MP, instead of looking at Court?

 

BazzaS, wouldn't breakdown of fees and charges and interest come up on the SAR? Sorry, I may be asking dull questions, but I came across so much new information, I am feeling the least lost.

 

I thank you immensely for taking part.

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Can I ask now if you know what Andyorch meant in his post of 8/5/2018? I am unable to open the link, he had kindly enclosed. Is there any new legislation coming into force in 2 weeks tome?

 

I found it.

 

Still wouldn't be better to send my SAR now? Time wise is the same, I pay only £10 fee. Or, is there still a possibility they impose additional charges for whatever reason? Have I misunderstood something?

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I’m still at a loss as to:

What the problem the OP is currently facing is

(We have the background, but don’t know if there was any borrowing via the Reserve account other than the £24,140 that shouldn’t have been released ...... if there was it may complicate the allocation of any repayment(s) made by either the ex-husband, or the OP).

 

OP, have you made any proposal / payments (other than interest) towards

a) the main mortgage, and

b) any money taken from the Reserve account prior to when it should have been frozen?

Do you believe you should or shouldn’t have joint and several liability for those sums?

That (as they are interest only mortgages) that the capital sum needs to be repaid in 2023) (though you shouldn’t have to pay the £24,140 and any interest, but that any other sums will still be due)

 

 

Is there any option to sui the bank for Negligence or is it more an Unfair treatment?

 

 

 

 

 

Suing the bank for negligence :

There would have to be a duty of care.

There would have to be a breach of that duty of care

Harm would have to result to a party for that part to be able to sue.

 

Duty of care and breach of it : not to hard to show.

If the bank aren’t pursuing the OP for the £24,140 and it’s interest : what harm can the OP show they have suffered that they need further compensation for?

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I'm afraid an action for negligence would not be possible because the matter is well out of time. The limitation period is six years. I think that other than the limitation period, there would have been no problem. However a breach of contract action would have been easier – but that also is out of time. It's a great shame that the OP has been listening to friends about whether or not to bring a complaint to the FOS. The FOS is not a great institution that it can be very helpful in situations like this. At least it would have forced a bit of spotlight onto Barclays bank and frankly in this case I think the FOS could have produced a decision which could have made Barclays bank confront their responsibility.

 

I've been struggling with this problem to find a chink to exploit. The frustrating thing has been that it all happened before 2009 so that one was left only with a negligence action or contract action – and both of those opportunities are now time expired.

 

However, we have now been told that one of the things the OP requires is that her name is disassociated from the overdrawn mortgage reserve account which became overdrawn simply because the bank ignored its own rules and allowed the ex to drain the account.

 

Although this happened before 2009, it seems to me that the fact that the bank has admitted the error and the problem has been caused by a mixture of the dishonesty of the ex-husband and the error of the bank, means that the effect on the OP is unfair and the failure or refusal of the bank to remedy the situation is unfair – and very importantly, it continues to be unfair.

 

It seems to me that there could be an opportunity here to use BCOBS against the bank.

 

I think that if the OP were to contact the bank again and to make a formal complaint that her name is still associated with this account and its state of indebtedness despite the fact that the bank has admitted that this is nothing to do with her. If her position then was that the bank' s continuing refusal or failure to correct the situation remained unfair, and if the bank then responded that they were not prepared to do anything, then I think that we could say that this was a new act of unfairness and could then be treated as a breach of the bank's obligation under BCOBS. The OP could then bring a small claim for breach of statutory duty under BCOBS, claiming a very small amount of money, say, £100, simply with the intention of waking the bank up and also getting a judgement.

 

The attraction about this would be firstly that a BCOBS action can be bought as a small claim so it would be very cheap and almost risk-free to the OP. A BCOBS judgement against Barclays could then be sent to the FCA. If the bank then continued to refuse to do anything, then this would be a continuing act of unfairness and another BCOBS action can be bought in exactly the same basis.

 

There is no need to bring an action for any larger some because the whole object of the exercise would be to obtain a judgement which made it clear that the bank had acted unfairly. This might not solve the entire problem, but it would start to move things and it would also warn the bank that finally somebody was starting to take control of the situation – because so far the bank has been in a very comfortable position where the OP has not dealt with it or has not controlled it and so the bank is simply managed to get away with apologies and derisory compensation offers and then rest on its laurels.

 

So the message to the OP is – with something of this kind interest you? As you probably have gathered by now we would be very happy to help you all the way.

 

Although this thread has only gone for two pages, it is already becoming so complex and it has taken so long to draw out the details of the story, that it would be a good idea to start a new thread simply to deal with the suggestion that I have made. This is up to the OP – but if you are interested in this and I suggest that you start a new thread which you could call "Barclays bank – action under BCOBS for breach of statutory duty".

 

On the basis of what I understand so far – and I don't understand it fully – I estimate your chances of success that better than 90%. Frankly I would expect that once Barclays new ops coming and they had received the court papers that they would put their hands up and they will start to deal with it. However I would urge that you would resist any settlement and that you proceed to get a judgement.

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The limitation period for negligence only comes in if the OP had a chance of succeeding with such a claim, when the bank can use it as a defence

I mentioned negligence because I’m not sure the OP even had such a claim: if the bank accepts it can’t chase the £24k (+interest), there may not ever have been a negligence claim (what actionable harm has the OP suffered? Without harm no cause of action arises, making the limitation period moot!)

 

A new thread might be helpful but there is information here in this thread that is relevant.

We need to know if the bank is pursuing the OP for any of the £24k or just the original mortgage (& any other Reserve account borrowing predating the freeze)

We need to know what the OP wants as an outcomes

 

Is it worth getting those established, here, and then starting the new “clean” thread?

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A clean thread is a very good idea. And we can link to this old thread. However I would prefer to leave it to the OP to start the new threat if she's interested.

 

Where do you gather that the limitation period for a negligence action only begins from the time where there is a chance of success? I have never heard such a thing. In any event, if one were suing for negligence then one would probably have to sue for the whole amount and this would immediately move it to the fast track/multitrack.

 

I think that the limitation period for negligence in this case begins at the very best, from the date that the bank admitted the responsibility. I don't think you could move any further forward than that under any circumstances. Furthermore, there are decided cases that where contract presents itself as an alternative to negligence then the claimant should bring the action in contract. There are exactly the same problems with the limitation period – and also the value of the claim.

 

It is essential that there is no risk to the OP and that means that a claim must be kept to the very minimum – but maximum effect on the bank.

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Regarding the bank pursuing the Reserve Account, and breach of statutory duty.

If there was other borrowing on the Reserve Account prior to “the freeze”, the bank is entitled to pursue that.

There would then be no breach of statutory duty, although any amount being pursued can be challenged to clarify the allocation of sums due.

 

The OP hasn’t told us if the Reserve Acvohnt was used (for borrowing), prior to the freeze.

 

In effect, it may be simpler to consider it as if there were two Reserve Accounts: Account A which was in use before the freeze, and Account B, that part which arose when the £24k was wrongly transferred.

 

That way it is clear if the bank is behaving reasonably: OP should have liability for anything under Reserve Account A, but no liability or association with Reserve Account B.

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We'll have to wait for the OP to engage with this thread again. It is turning out to be very slow going to piece this one together

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Where do you gather that the limitation period for a negligence action only begins from the time where there is a chance of success? I have never heard such a thing.

 

 

That isn't what I was saying.

The Limitation period starts at the time of the harm, or (for an adult claimant), (if the harm wasn't apparent) when the claimant has knowledge (actual, or 'constructive') of the harm.

 

 

What I was saying is that if there was no harm, then a court would never have to even consider the issue of limitation: any claim for negligence would be dead in the water before limitation even had to be considered as a defence.

 

 

 

In any event, if one were suing for negligence then one would probably have to sue for the whole amount and this would immediately move it to the fast track/multitrack.

 

 

Tosh. If suing for negligence, the restitution is damages. Those damages are intended to put the person back in the position they would have been had the negligent act not occurred (or as close to it as possible).

If Person A takes out a £100k mortgage, and gets charged an erroneous higher interest rate due to negligence, and notices it 2 years later : they can sue for negligence, and the harm they have suffered, being:

 

a) The difference between what they were charged and what they should have been charged, with

b) Their costs in dealing with the problem.

They can't realistically claim for "the whole sum" (certainly not the 100k, and not even all the interest they have paid......)

 

 

 

I think that the limitation period for negligence in this case begins at the very best, from the date that the bank admitted the responsibility. I don't think you could move any further forward than that under any circumstances.

 

 

Again, The limitation period starts at the time of the harm, or (for an adult claimant), (if the harm wasn't apparent) when the claimant has knowledge (actual, or 'constructive') of the harm.

If the OP contacted the bank saying "there has been a negligent act", and the bank later replied "yes, we made a mistake", then the OP MUST have had knowledge of the problem to contact the bank, and thus the 'clock starting' on the limitation period must have started before the bank admitted responsibility!

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I now have a clearer picture of the story.

 

The OP and her husband bought a house. They obtained a mortgage through Barclays. Barclays being true to form and hoping to encourage some undisciplined borrowing in addition to the ordinary needs of the mortgage, offered a mortgage reserve account of about £24,000.

 

In other words, the OP and a husband obtained a mortgage of £160,000 (approximately) and in addition to that a secured borrowing facility of up to £24,000.

This secured borrowing facility remained untouched.

 

The mortgage was an interest only mortgage.

 

At some point the OP and her husband separated. The husband immediately inform the bank that they had separated and instructed the bank to freeze the mortgage reserve account. Technically speaking this meant that neither party could draw down from this secured overdraft facility.

 

However, the husband then attempted to withdraw money from this facility – without his ex-wife's permission – and as a result of a banking error, he succeeded and he drew down the entire facility – £24,000.

 

The OP realised what had happened and flagged this up to the bank. The bank agreed that that there had been an unauthorised borrowing against the account and they admitted that they were to blame. As a result of this, they agreed not to pursue the OP for the £24,000 and the accumulating interest and agreed that the liability would be solely husband's.

 

All this sounds fine. However, all they have done is that they have agreed not to enforce the (joint and several) debt against the OP. But they have kept her name on it and so technically speaking she is still liable. The bank has not completed the task of undoing their error by formally shifting the ownership of the debt into the name of the husband.

So the OP is still formally in debt to Barclays. Not only that, the £24,000 has been attracting interest and so the overdraft now stands at £41,000 and of course it is secured on the property.

 

Furthermore, I now understand that a court in 2010 ordered that the husband's 50% share of the property should be transferred to the OP. I believe that this has been done.

 

So we have now a situation where the OP owns 100% of the property – but there is an outstanding mortgage on it in both her name and the name of her ex-husband – because the bank will not allow the mortgage to be reassigned to her name alone.

That is to say – they will allow it, but the mortgage now stands at £200,000 – the original £160,000 plus the £41,000 which was stolen by the ex-husband. (I think we have to say that it was stolen).

 

All of this matters to the OP because she wants to convert the interest only mortgage into a repayment mortgage. However, she doesn't want to start paying off a loan of which a substantial percentage is the responsibility of her husband.

 

Because the entire property is now in her name, she accepts that she owes the bank £160,000. However, she does not accept that the bank will not remove the stolen £41,000 from the outstanding mortgage sum.

 

Furthermore, I understand that despite the fact that the bank has agreed that they will not enforce the £41,000 against the OP, it was registered as a default on her credit file and was there until at least 2014.

So this means that the bank facilitated the theft of money, agreed not to enforce it against her, but still formally holds her responsible for it in that they lost a default on her credit file and presumably if one day they were to foreclose on the mortgage, they will attempt to recover the entire mortgage debt including the stolen money from the OP.

 

I feel that I have gobbled this explanation somewhat – but does it make sense?

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So what does the OP want?

 

The OP wants her name formally to be disassociated from the debt of £41,000. She wants the outstanding mortgage to be reduced to £160,000 (net of the £41,000 stolen money) and she then wants to be allowed to convert the interest only mortgage into a repayment mortgage.

 

There are additional matters which I see here and that is any damage which has been caused by the wrongful default.

Also, because she has not been allowed to convert the mortgage into a repayment mortgage earlier on, she has been paying extra interest because she is not been allowed to reduce the capital sum. This is an issue which needs to be dealt with as well at some point.

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I have looked again at the bank letters which the OP has supplied to us. I have suddenly realised that there is one letter dated 20 January 2018 which apparently is a final response and which deals with some of the issues. Because it is dated 20 January, the deadline for complaint to the FOS has not yet expired. Because of this, I think it would be a good idea to make the complaint to the FOS. There are still two months before the expiry of the deadline but I think that a complaint to the FOS should be begun as quickly as possible – within the next week or so.

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