mortgage redemption penalties

[groovycaz]

Has anyone else come across this daylight robbery, I took out a very small mortgage with the lancashire mortgage co in 01. The loan was for £7500 over 180 months at £122.29 per month, the APR 24.62%. I paid 32 payments of £122.29 on time, without any penalties. I remortgaged to a much better rate in sept 03 with the Abbey and asked for a redemption figure around march 03, cant remember the exact figure, however 6-7 months payments later when the time came to redeem the figure was something like £350 more than the previous figure quoted £9,650.30, so my £7500 loan cost me £13,565,30 over 32 months.

I wrote to the Lancashire mortgage co to question these figures and this is the reply.

Your loan was for £7500 taken over a 15 year term. This loan being under £25.000-00, is regulated by the consumer credit act. This act provides us with the calculations which we must use when compiling a settlement figure.

In essence, on a 15 year loan assuming all payments made on time, a settlement figure will rise in the early part of the loan. At the time the loan was redeemed you were only 2.5 years into a 15 year loan. Hense the settlement figure was slightly higher than the figure quoted to you 6-7 months previously. I hope this answeres your query.

Can any one tell me if this is legal or have I been ripped off big time.

Any feedback would be most appreciated:?

[chesham]

Sounds to me like they have thrown in some hidden settlement charges in addition to the redemption penalty. Have you checked your t's and c's to see what the clauses are for terminating the loan before term?

 

I would go back to them and ask them to explain properly the exact breakdown and a proper laymen explanation as to why, when you have paid more towards the loan, the settlement had increased? Seems completely illogical to me!

[groovycaz]

Just read through my t's and c's and the only terms which relate to the discharge of the loan is

The borrower may discharge the indebtness at any time by paying the balance of the total loan and intrest outstanding at the date of payment together with a further sum equal to the amount of intrest which would have been charged after the date of payment if this agreement had continued without variation and if all repayments due after the date of payment had been made on the due dates after deducting a rebate to the borrower calculated under the Consumer Credit [Rebate on early settlement] regulations 1983. The term previous to this states, Payments made by the borrower may be credited first to capital or interest outstanding under this agreement at the discretion of the lender, so really as they never sent me a yearly statement I dont know how they reached the settlement figure. I will take your advise and write to them for a breakdown of their charges. Thanks for that

[bobbyh99]

Has anyone else come across this daylight robbery, I took out a very small mortgage with the lancashire mortgage co in 01. The loan was for £7500 over 180 months at £122.29 per month, the APR 24.62%. I paid 32 payments of £122.29 on time, without any penalties. I remortgaged to a much better rate in sept 03 with the Abbey and asked for a redemption figure around march 03, cant remember the exact figure, however 6-7 months payments later when the time came to redeem the figure was something like £350 more than the previous figure quoted £9,650.30, so my £7500 loan cost me £13,565,30 over 32 months.

I wrote to the Lancashire mortgage co to question these figures and this is the reply.

Your loan was for £7500 taken over a 15 year term. This loan being under £25.000-00, is regulated by the consumer credit act. This act provides us with the calculations which we must use when compiling a settlement figure.

In essence, on a 15 year loan assuming all payments made on time, a settlement figure will rise in the early part of the loan. At the time the loan was redeemed you were only 2.5 years into a 15 year loan. Hense the settlement figure was slightly higher than the figure quoted to you 6-7 months previously. I hope this answeres your query.

Can any one tell me if this is legal or have I been ripped off big time.

Any feedback would be most appreciated:?

 

Hi GC

 

I know you haven't updated this thread for a while but you did post something on my Future Mortgages thread so thought I would pop in and assist if needed!

 

The £9,650 quoted above would be the Rebate on the interest you are entitled to.

 

Total loan would be (180 * 122.29 = £22,012.20), less rebate using R78 of £9,690 less payments already made (32 * 122.29 = £3,913) leaves a settlement figure of £8,408!

 

Based on the information you have provided they have overcharged you about £1,300.

 

As the loan is regulated by the CCA the Consumer Credit [Rebate on early settlement] regulations 1983 were applicable this would use the Rule of 78 calculation which is what it looks like they have attempted to do but got it horribly wrong!

 

I would be inclined to get this money back asap.

If you need any help, let me know.

 

BobbyH

[groovycaz]

Thanks for the offer BobbyH

 

I think its about time I SAR'd them, what with your success and everything,

lucky for me, i've still got all paperwork relating to the loan so will be picking your brains over the next couple of weeks if thats ok

 

thanks again and very well done...Gc

[bobbyh99]

No problem, call on me anytime.

 

BobbyH

[groovycaz]

SAR gone out to Lancashire Mortgage Corp will update when i receive a reply..but as they are part of Blemain i wont hold my breath...and my settlement had to be paid to another company called Prime Business Loans or they would not release the deeds for my remortgage....pleased i've started the ball rolling on this one again...thanks Bobby

[groovycaz]

Decided to write to Mr Howard laddin, this is the guy who replied to my original complaint last year with clap trap answer's...I've demanded a refund within 14 days or concrete proof that the settlement figure I had to pay to release my deeds was correct or I'm complaining to the relevant governing body and commencing court action....the only trouble with this lot is that they did'nt come under the remit of the FOS when I took out my "mortgage" as I've allready tried to complain to them, I believe its the leasing and finance who would handle my complaint....I need to be quick on this one as 6 years is up in sept....my letter went recorded delivery last week and up to now no reply which is no supprise...Gc

[groovycaz]

And my solicitor was instructed to pay the balance to a company called prime business loans, who i have had no dealings with and they did not reply when questioned who this company are and why i had to pay them money...Gc

[groovycaz]

Received letter from lancashire...they claim again early redemption was correctly calculated...will scan and post both my letter and their reply tomorrow..Gc

[groovycaz]

Ok guys, this is a copy of my letter to Blemain/lancashire

 

http://i192.photobucket.com/albums/z274/joshsam03/Blemain/002.jpg

 

http://i192.photobucket.com/albums/z274/joshsam03/Blemain/003.jpg

Edited August 4, 2009 by groovycaz

[groovycaz]

And this is their reply

 

http://i192.photobucket.com/albums/z274/joshsam03/Blemain/004-1.jpg

 

http://i192.photobucket.com/albums/z274/joshsam03/Blemain/005-3.jpg

 

http://i192.photobucket.com/albums/z274/joshsam03/Blemain/006.jpg

 

http://i192.photobucket.com/albums/z274/joshsam03/Blemain/007-1.jpg

 

http://i192.photobucket.com/albums/z274/joshsam03/Blemain/008.jpg

 

http://i192.photobucket.com/albums/z274/joshsam03/Blemain/009.jpg

[groovycaz]

This is the CCA and other info

 

http://i192.photobucket.com/albums/z274/joshsam03/DSCF0344-1.jpg

 

http://i192.photobucket.com/albums/z274/joshsam03/DSCF0346.jpg

 

http://i192.photobucket.com/albums/z274/joshsam03/DSCF0342-1.jpg

 

http://i192.photobucket.com/albums/z274/joshsam03/DSCF0347-1.jpg

 

http://i192.photobucket.com/albums/z274/joshsam03/DSCF0345-1.jpg

 

can anyone please advise me whether their calculations are correct, they are directing me towards their acting solicitors as regards to costs yet I borrowed £7500 but only received £6500 as the other £1000 was for their costs, I still have all my bank statements showing payments and amount they deposited into my account...many thanks Gc

[groovycaz]

Bumping

 

can anyone advise please..I know the figures are wrong.

 

they are directing me to their acting Sols but the CCA i signed was with them and i only have until the 8th sept then the 6 year limitation's up

 

many thanks Gc

[groovycaz]

Please can a mod move my thread to the Mortgage Redemptions as I'm not getting any feedback...Gc

[groovycaz]

http://www.consumeractiongroup.co.uk/forum/general-consumer-issues/52933-mortgage-redemption-penalties.html

 

Hi all, sorry i started my thread in the "General Consumer Issues" instead of Mortgage an Secured loans, time is running out for me to try and get this sorted out as 6 years is up next month. I've requested a mod move my thread over, however in the meantime if anyone could take their time and have a quick look (link above) any advise would be very appreciated...Gc

[rickyd]

Hi - looking at the screen print it seems they weren't backward at charging for settlement. I can't get over them charging:

 

1 Discharge fee £58.75

2 Deeds release fee £117.50 (isn't this what the discharge fees is for?)

3 Collection charge £176.25

4 Legal & Doc fee £450 (isn't this a deeds release, sorry discharge fee?)

 

Curiously the Legal and Doc fee is less than you agreed to in the Disbursement Authority signed on 22nd August. I guess we should be grateful for that (sic).

 

The FSA has decreed that the actual costs involved in discharging security and releasing deeds is approximately £50 so I'd say you've been royally shafted here. Adding insult to injury the APR is scandalous and variable to boot.

 

Looking at your figures the loan cost you £6054 over and above the £7500 they loaned to you. This equates to £189 per month or 30% of the loan per annum, which is way more than a credit card would have cost - scandalous!

 

I think you'd need to know exactly what each of their extra charges was for. Under the current MCOB regulations you need to be advised of all related fees before you sign any mortgage agreements but I'm not sure this was a requirement back in 2000, but it certainly should have been.

[groovycaz]

Thanks for your reply, i'm sure all thye fees etc were taken out of the loan amount at the beginning of the loan...the rest were added in without my knowledge...Gc

[groovycaz]

Bumping again....sorry times running out...any idea's anyone ???

[groovycaz]

Just found this which is very interesting

 

http://www.mcsforintroducers.com/pdfs/customer1.pdf

 

someone's actually taken BF to court for a set aside and won lol Gc