Jump to content


Northern Rock - ERC and Mortgage discharge fee


stig1953
 Share

style="text-align: center;">  

Thread Locked

because no one has posted on it for the last 4885 days.

If you need to add something to this thread then

 

Please click the "Report " link

 

at the bottom of one of the posts.

 

If you want to post a new story then

Please

Start your own new thread

That way you will attract more attention to your story and get more visitors and more help 

 

Thanks

Recommended Posts

Hi everyone,

I recently changed mortgage provider from Northern Rock to Stroud and Swindon. I was just over 5 years into the mortgage period which had a low fixed rate for the first 2 years. There were ERC penalties for redeeming up to 6 years and I got hit for 1% - £xxx and a mortgage discharge fee of £xxx . Am i within my rights to claim this back and how do I go about it? I was made aware of this site by a link from The Motley Fool (link removed)

Thanks in anticipation :confused: Stig1953

Link to post
Share on other sites

Hi.

Not had any response to my intial question so i have drafted a request ( see below) for payment to Northern Rock.

If anyone has any comments or advice can they please post.

many thanks

steve

 

Northern Rock

Northern Rock House

Gosforth

Newcastle Upon Tyne,

NE3 4PL

 

Request for repayment of early redemption charge and Mortgage discharge fee

 

Dear Sir/Madam

 

Account Number: XXXXXX

I am writing to request a refund of the early redemption charge of £xxx and a discharge of mortgage fee of £xxx which were debited to my account when I redeemed my mortgage on 29/03/2006. I now understand that these charges are in all likelihood disproportionate to the costs that you actually incurred. As such, these penalties are unlawful at Common Law, Statute and recent consumer regulations. Such disproportionate charges are considered to be unfair per se by the OFT who reported on 5th April 2006 and are therefore presumed to be unlawful in the absence of specific proof to the contrary.

If you believe that these charges are proportionate to the costs you have incurred as a result of the early redemption of my mortgage, could you please demonstrate this by providing a full breakdown of those costs or a pre-estimate of your losses? Please note that I do not require an explanation as to why this charge was made; I am fully aware of the terms and conditions of my mortgage. What I require is a breakdown of your costs in order to reassure me that the charge is justified.

 

Having taken legal advice on this matter it is very clear, as you will no doubt be aware, that English contract law requires such charges to be a genuine pre-estimate of your losses. In the case of Castaneda and Others v Clydebank Engineering and Shipbuilding Co Ltd., (1902) 12 SLT 498 the House of Lords held that a contractual party can only recover damages for actual or liquidated losses incurred from a breach of contract as opposed to a charge which represents a penalty. This was upheld in the case of Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79. In addition to this, your charges represents an unfair term of contract which is contrary to the Unfair Terms in Consumer Contracts Regulations 1999 (SL. 1999/2083). Your charges constitute an unfair penalty under Schedule 2 of the said regulations, which provide an indicative and non-exhaustive list of terms, which may be regarded as unfair. Under paragraph 1(e) of schedule 2 this specifically includes terms, which have the object of requiring any consumer who fails his obligation to pay a disproportionately high sum in compensation.

 

 

 

I would also like to bring to your attention the following statement by the Office of Fair Trading:

 

A term in a mortgage agreement which requires the borrower to pay more for breaching the contract than actual costs and losses caused to the lender by the breach (or a genuine pre-estimate of that) is likely to be regarded as an unfair penalty and to be unenforceable at Common Law and (in a consumer mortgage) under the Unfair Terms in Consumer Contracts Regulations.

 

The fact that I signed the mortgage offer containing the term relating to the early redemption charge does not make this term enforceable, as I’m sure your legal department are fully aware.

 

 

 

 

 

I will now give you 14 days to reply to me accepting, unconditionally, my request in principle and letting me know a date by which I will receive payment.

 

If you do not respond, or if you do not respond positively, within this time period, I shall send you a Letter Before Action giving you a further 14 days in which to reflect. While I would like to settle this matter amicably and without the need for court action and the attendant publicity this will receive, you can take this letter as 28 days notice of my intention to issue a claim should you not comply with my request. I believe that these targets are more than sufficient for a large company such as yours with dedicated staff and departments.

 

Yours faithfully,

 

 

XXXXXXX (Mr)

Link to post
Share on other sites

Hi. I had an erc of over 4.5k on a 70k mortgage in 2001, so I have sent them a similar letter. I sent it a week ago, but have had no reply as yet - will keep you informed! Your letter seems ok, and we'll have to wait and see if they respond to either of us!

Link to post
Share on other sites

Hi , I am new to this group and saw the site recommended on an email from Motley Fool. I am intending to claim back an ERC of approx £4000 from Portman Building Society. They charged me 5% with 18 months left to on the mortgage. I also intend to make another claim of approx £2000 from the Abbey in 2002. I have as yet not seen any other claims made against the Portman ( previously the Staffordshire) and would be interested to hear from anyone who has made a successful claim.:-)

Link to post
Share on other sites

  • 3 weeks later...

General Question

 

I thought I had got the ball rolling on 11th December when I sent my request for repayment to NR. I sent it recorded delivery 1st class. According to the Royal Mail website ( track and trace) it has not yet arrived.( Looks like it has been lost).

My question is do I have to send another letter - if I had not sent the first one Recorded I would just be assuming now that they had just not bothered replying.

 

Any recommendations?

Stig

Link to post
Share on other sites

I am preparing my MCOL - received an acknowledgement of my LBA apologising for not having replied to my request for repayment. Up to now I have lumped the ERC and Mortgage discharge fee together. The MCOL online form with the character and line entry limitations makes it difficult to get all the particulars down. Is it acceptable to now issue two MCOLs - one for ERC and the other for the Mortgage discharge fee bearing in mind my previous letters to NR lumped them together?

Thanks for any help.

Stig

Link to post
Share on other sites

I have just read somewhere on another thread not to use MCOL due to the limited amount of space and to use the N1(I think) form instead. Where you get this from I'm not sure but it surely says in the FAQ's. I used MCOL for bank claim but not yet that far with ERC claim so dont know much about it.

Link to post
Share on other sites

MCOL has been issued - will be deemed to have been served 23rd jan. LBA received by NR on 3rd Jan . NR replied again today with a letter dated 16th Jan but envelope(retained) postmarked 18th Jan . Letter standard no breach argument - ERC core term of of contract blah blah !!

Interestingly NR made an offer of £110 towards Mortgage discharge fee .

I will not be accepting this offer.

Do I have to respond to their letter??

 

Thanks Stig

Link to post
Share on other sites

To all others regarding Northern Rock ERC claims,

MCOL was deemed served on 23/1- NR acknowledged claim on 24/1 indicating an intention to defend all of the claim. I replied to their no breach letter with Zoot's No breach masterpiece. I am quietly confident that with the support of this site and actual Northern Rock literature referring to ERC's as a penalty I will win if it goes to court. All the breach arguments are very persuasive and the fact that the penalty period overhung the fixed rate period by over 4 years ( bearing in mind the OFT's stance on this issue) bode very well.

Any comments or further advice most welcome.

Stig

Link to post
Share on other sites

To Mods,

Bearing in mind what happened to Barry is there any advice for people who have issued MCOLs in relation to disclosure requests? Northern rock have indicated they will defend the claim but have not entered a defence as yet. They have until 21st February to do so . Do not want to jeapordise my chances on a technicality. I know Barry was not actually at an ERC hearing but what is the position?

Stig

Link to post
Share on other sites

Use the Draft Directions. Return these with your allocation questionnaire. Point ourt that the Directions were written by a judge in the Mercantile Court cases. If there is specific infrmation that you require in addition to what is requested in the Directions then include that.

Link to post
Share on other sites

Help and advice please,

All the current advice appears to be cut and run. Bearing in mind that my case is most likely to be small claims ( ~1.4K) for an ERC and Mortgage discharge fee do I stand to lose more than my claim fee of £120 if NR decide to defend. At present they have only acknowledged the claim but no defence has been entered yet. They have until 21/2 to do so. Would I be better contacting them now and try and negotiate a lower settlement or should I try my luck in court? Up until recently I believed I could not lose. The ERC period overhung the discounted rate period by over 4 years and published commissioned research for the OFT concluded that there can never be any justification for overhanging charges. I did redeem in the last year so some 3 years after the reduced rate finished. I also have a published document provided by the lender at the outset of the mortgage where they refer to ERCs as penaties.

Thanks in anticipation

Stig

Link to post
Share on other sites

  • 3 weeks later...

NR update.

Northern Rock have now filed a defence against my claim for repayment of ERC and Mortgage discharge fee. They have indicated they do not want to negotiate a settlement. I am on the point of returning my AQ - which should be small claims so I am going to give it my best shot.

Zoot any comments on their defence that I emailed you ?

Stig

Link to post
Share on other sites

Thsi may (or may not) be of some help:

 

http://www.consumeractiongroup.co.uk/forum/post-598733.html

 

This only relates to the admin/cancellation charge. I believe NR have offered you a part of yours, and presumably only a part of it because of the FSA ruling. This never actually made it to court, and if you read through it there are some of my musings as to why I don't think they wanted to contest it.

Link to post
Share on other sites

Hi Pscylo,

Thanks for that - I actually want this to go to court now as I think I have a better than even chance of winning which considering what NR have to lose against what I have to lose is an excellent bet.

Cheers

Stig

Link to post
Share on other sites

  • 4 months later...

Update for NR claimants,

Just a quick update for anyone interested- my claim against NR is still proceeding despite a brief setback. My particulars of claim were struck out prior to allocation by the DJ on the courts initiative but he gave me 14 days to make an application to have the strike out set aside. I filed an application with the very kind help of Zoot. At the application hearing NR fielded a barrister but despite their objections the DJ allowed my application and allowed the evidence in support of the application to stand as the new particulars of claim. He also allocated the claim to the small claims track. He gave NR 21 days to prepare a new defence which they did on the last day (27/6). The hearing is scheduled for 15th August . In relation to the original claim he did comment that it was his belief that using MCOL for such claims was inappropriate as the limitation to number of characters and lines did not allow sufficient information to be included. This was why he struck out the original POC.

Latest- NR have submitted another strike out application - these guys seem to be trying very hard to avoid a claim hearing.

Link to post
Share on other sites

  • 1 month later...

Further update,

The district Judge has again struck out my particulars upon application from Northern Rock. I am now finding the whole affair very stange. The DJ accepted the particulars of claim after the first strike out and then allocated to the small claims track. The latest strike out came as a bit of a surprise. I have decided to fight on as I believe I have discovered a fatal flaw in the original contract. Consequently I applied to have the second strike out set aside.I pointed out key errors in Northern Rocks defence which will have prejudiced the strike out decision. I am pleased to say that the DJ has granted a hearing for my application which will be 30th August. I believe that if I can get the strike out set aside then it is likely the claim will ultimately succeed as well. I will keep the forum posted - especially as to the flaw in the contract which may help other possible claimants. I will post more details if the set aside hearing is successful. Fingers crossed.

Link to post
Share on other sites

 Share

  • Recently Browsing   0 Caggers

    • No registered users viewing this page.

  • Have we helped you ...?


×
×
  • Create New...