Posts moved from hijacked thread

[nevos]

Hi, Jamorgan:

 

Sorry to hear you lost in court, stayed up most of the night reading your thread. The more I read the more I felt the case was way over the head of the Judge and sadly, a tough call for you too.

 

I think at times people on CAG get carried away with law, no offence meant here because this is a great site with great people however, often you can boil things down to basics.

 

Firstly, people like us with adverse credit have very limited choices for a mortgage. We are very happy when a lender takes us on, we know we can make money on our property and as long as we can make the payments then, we are very happy to sign up. You had been happy to take the loan and also been made aware of the penalty clauses for ER.

 

We all know about the interest rate hikes, it was this that prompted you to look for another lender I beleive, in which case you must suffer the charge for redemption, you agreed to it in the first place.

 

A judge would look at it this way, they lent you the money, you happily borrowed it, before you signed on the dotted line you would have had lot's of bit's of paper telling you what your in for and what it will cost you to get out from under.

 

IMO we are not being fair to the lender here and choose to scream when it suits us, sorry to say it. I do agree that the ERC is way too high however, I know these guys pay big commissions to brokers and agents.

 

My estimate would be £30K to get this in the High Court, is it really worth it, the money would be better spent trying to get some legislation in place to cap the costs to actuals rather than a random figure.

 

This being said, I wish you luck and other helpers with your apeal.

[nevos]

RBrears:

 

But is the main function of the erc to deter you from breaching the contract when the contract actually provides a contractual right to redeem early?

 

Is it a breach of contract?

 

IMO it is clear cut that the ERC is a term of the contract. A breach of contract usually includes the words: If a remedy can't be found but, the ERC is the remedy.

[rbrears]

sorry nevos don't follow you - can you expand on that?

[FairlyNiceChap]

Sorry to hear you lost in court......

 

they lent you the money, you happily borrowed it, before you signed on the dotted line you would have had lot's of bit's of paper telling you what your in for and what it will cost you to get out from under.

 

IMO we are not being fair to the lender here and choose to scream when it suits us, sorry to say it.

 

Hollow words of comfort Nevos - One could excuse Jamorgan for being less than comforted

Is it a breach of contract?

 

IMO it is clear cut that the ERC is a term of the contract. A breach of contract usually includes the words: If a remedy can't be found but, the ERC is the remedy.

 

and Nevos - what would you say bank charges on overdrafts for example

 

"they they lent you the money, you happily borrowed it, before you signed on the dotted line you would have had lot's of bit's of paper telling you what your in for and what it will cost you to get out from under."

 

So in conclusion Nevos - if you aren't backing the CAG position - have the honesty to declare yourself - failing that goodbye

[paddym]

Nevos i dont understand your logic if youu dont believe in the work we are trying to do here why come here ?Nobody on this site claims to be an expert although collectively we have all got input we can all read and what i read or you read or someone else reads can be taken up differently there by we are able to bring different elements to each others particular problems or questions we are a community a self help group yea we can suggest things we research our own claims and get others views so far we have had more victories than loses i know one thing for certain from ive joined the consumer action group im more confident taking on the finacial institutions not only for claims but in every way because i have leaarned things from this site that i never knew just help yourself read the different sections read some members stories and see how they have been helped at the end of the day all im saying to you is if you cannot saay something constructive dont bother saying it the tone of that last post you made my first thoughts were that you must work for a mortgage company well enough said !

[FairlyNiceChap]

Hi Rbrears

 

Can I ask for clarification here

 

If i follow your argument the key issue is - is there a breach?

 

So If a contract said

 

1) Party a gives party b a fiver in payment for the loan of toys for an hour

2) As a promotional bonus on entering the contract b gives a an irresistable freebie promotional sweetie of value £0.50

3) If the toys are returned early there will be a pro-rata refund, less sum of £1 costs and less £0.50 p (the value of the consumed sweetie).

4) £1 is a liquidated cost - estimated at time of contract as costs of extra admin

 

Regarding 3) Which of the following best describes your position (if either)

 

The £1 is ok - it is compensation

the 50p is ok because it anticipates non completion of term of contract (so there is no breach)

 

or

 

The £1 would be ok but the 50p is a penalty (it is unrelated to liquidated costs as the 50p freebie was a sales promotion) - so clause 3 is a penalty term for breach and is unenforceable

 

Sorry to be thick - but the above is effectively the wording I have on my contract - the "Freebie" was in my case a 2% Cash "GIFT" returnable if terminated within 5 years

 

many thanks for your time

 

FNC

[Bona]

Tell me this someone

 

If as in our case the High court made an order for us to sell our house rather than the Mortgage company who wanted to repossess it but it would have to go one way or the other how come they can take an early redemption fee

[red1]

Not legally minded but could these have any bearing..

 

http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000200409.pdf.

http://ec.europa.eu/internal_market/fin-use_forum/docs/20050418_final_en.pdf.

From European Commission

[nevos]

Hi All, sorry if you found my words less than comforting for Morgy etc...however, I don't want to go off on a tangent and upset the thread and or the contributors. May I try to answer the comments of others by way of a reply.( A mod can delete it if they feel it's a breach of the thread).

 

Rbrears: Post#206: As I read things in the thread Morgy was trying to prove breach of contract and unfair unlawful charges etc..The mortgage is a contract and there is a means of terminating it by paying the ERC. My point was: it is not unreasonable or unlawful, simple contract between a company and individual. The mortgage co did not breach the contract and Morgy simply exercised her option to redeem.

 

FNC:

 

Hollow words of comfort Nevos - One could excuse Jamorgan for being less than comforted

Sorry, just being devils advocate here and putting myself in the other guys shoes. Of course I feel for Morgy(hope you don't mind me calling you this) also, I wouldn't wish to see the lady racking up more and more costs, I do believe this is a High Court Action as others have said. I guess my point was, keep an eye on reality, sorry again if I offended anyone.

 

and Nevos - what would you say bank charges on overdrafts for example

 

IMO they are two entirely different kettles of fish.

 

PaddyM: this what I said:

I think at times people on CAG get carried away with law, no ofence meant here because this is a great site with great people however, often you can boil things down to basics.

 

I most certainly do not work for a mortgage company, I'm merely putting their side of the argument: They could have lent the money to others at high interest rates, they do pay big commissions to agents and financial advisers etc..

 

Morgy: I am full of admiration for you taking on those guys in court and I am sure the case was way over the Judges head. I sincerely hope you, with the help of people here, can see a way through it all.

[Les Gunn]

Nevos,

 

Whilst your comments at the time may have seemed somewhat raw and unfeeling, I do accept that you had reality in mind.

 

That said, on the no breach argument, there can be no doubt if you choose to redeem on any kind of agreement, you are breaking a contract you have with a seller, therefore breaching the original term surely.

 

Within the wording on many mortgage agreements, it is referred to as "the Loan" and if a lender then chooses to apply a fee for that should you choose to redeem/breach, the amount applied must be deemed to be fair for the period that the lender would be without the business.

 

I do not believe for a minute that a lender would not be able to re-sell the same product again for the rest of the term of that is stated in the agreement. In fact, from a friend of mine who works in the market, the average time span is up to 6 weeks, which is sure as hell a lot different to several months worth of penalty charge eh?

 

If the lender was transparent and said to me, look, we re-sold a similar product to compensate for the loss of your business 8 weeks after you redeemed, here's an amount of money that would take you from the end of the 8 weeks to the rest of your charge period, then that would be fair yes? But i'm looking at things through rose coloured glasses. The reality is that lenders are shallow in their approach to those with poor credit ratings (some are left in positions where the rating is not necessarily through their own doing, but personal circs beyond their control). They are happy to discriminate and add on ridiculous charges knowing that you could have the potential to not be able to afford it, adding more worry and pain. They are in the game of making the biggest possible profit fo shareholders, who probably (in the main) don't have mortgages to worry about!

 

Some of us aren't as blessed financially as others, the mortgages lenders know this, BUT that still does not mean they can't be reasonable and fair in their approach eh? I think if a lender came to the table with a reasonable offer as to the redemption penalty, perhaps people would find this more paletable.

 

Ahhhh...that feels better off my chest lol!

 

[stan5131]

Just subscribing Morgan. We are all supporting you in every way we can.

[nevos]

Les_Gun

 

 Whilst your comments at the time may have seemed somewhat raw and unfeeling, I do accept that you had reality in mind. 

 

Hi, I accept what your saying also what Morgy has been saying in her case however, IMHO I believe, that the issue is with contract law and not perhaps, consumer driven. This was my reason for pointing out both parties side of things.

 

Contracts exist to make the deal clear, this is why I said to RBrears regarding, there was a contract between the parties and a clause i.e. the ERC to allow Morgy an escape route. As the good lady staed she could no longer afford the repayments and wanted to look for other products.

 

Without a water tight contract there would have been no way out of an expensive mortgage, the lender is happy to maintain the contract conditions for obvious financial reasons however, did fix the rate for say 3 years, pay all the associated agents fees etc etc..plus your estimated 8 weeks maybe £1K in interest, £2K for agents plus contribution to their over heads...£5k would be soon expended. In which case maybe £2K is the actual penalty factor.

 

I have a similar situation with GE Money, they told me that if I wanted to move house the mortgage may be transfered at the same value without taking a hit on ERC if we stay with them.

 

I do know this is CAG but, has anyone looked at contract laws here?

[lellypea]

Thought rbrears post on 18th was a major contribution. Thanks rbrears.

 

I, and I'm sure others too, found your thoughts incisive and creative both in relation to what probably 'went wrong' and also as to what avenues

could be examined for inroads forward.

 

In particular - your observation that the contract (in relation to ERC) behaves like a breach, but provides a clause so it is not regarded as such, AND thus allows the lender to avoid the rules on penalties being applied.

 

Surely this 'letter' v. 'spirit' of the law may throw up some real opportunities for the long term. (It does seem the lenders have been deviously clever here and thus far got away with it)

 

Also the claim the ERC is 'compensation' with all the possible vulnerabilities of that statement - no laymans clear explanation (in fact ERC 'details' can read as little as a line of percentages....'6% 6%' etc.) .....no intricacies of

calculation indicated, etc. Is this ambiguity designed to conceal what

could be construed as a penalty?

 

It would seem another approach worthy of detailed examination.

 

And the other relevant and clear strands you highlighted rbrears....

 

Although I am not myself versed in law you provided some really

creative insights and suggestions to consider. I am looking forward to seeing how they develop as you and others slug out the possibilities.

Really well done. Are you putting 'something' together for Morgy over the weekend??? Look forward to reading it if you are.

 

.....ALSO.....still thinking about you Morgy....everyone is rooting for you.

 

Thanks.

 

Kind regards

 

lellypea

[paulpb123]

I agree with Lellypea, and the 'letter' v 'spirit' of the law seems relevant here. This is from Zoot's 'Response to no Breach Argument':

 

I would also like to draw your attention to the Regulation 7 of the Unfair Terms in Consumer Contracts Regulations 1999:

 

7. - (1) A seller or supplier shall ensure that any written term of a contract is expressed in plain, intelligible language.

 

(2) If there is doubt about the meaning of a written term, the interpretation which is most favourable to the consumer shall prevail.

[lellypea]

Hi Nevos....just noticed you are 'above' me.

 

I think many of us knew you felt for her....and were just trying to provoke examination of the situation from another angle (and possibly one that could do with some attention)

 

I thinks it's just in the sensitivity of the moment for Morgy, and everyone's

overriding desire to be as positive and supportive as possible .... you

took a backlash. Perhaps just delaying a day or two to let the dust settle may have been advisable and more sensitive in the desperate and distressing circumstances.

 

In view of what's happened it's vital all aspects are scrutinised. Your

'devil's advocate' role re Contract law will I'm sure be helpful in determining

the way forward.

 

Your subsequent courteous and gentle references to Morgy have I

think made clear your helpful intentions.

 

Kind regards

 

Lellypea

[zootscoot]

I do know this is CAG but, has anyone looked at contract laws here?

:eek:

[nevos]

:)