~~~**IMPORTANT** Mortgage Claimants ~ PLEASE READ ~~

[zootscoot]

Following three recent defeats with ERCs:

 

 

http://www.consumeractiongroup.co.uk/forum/mortgage-companies/27030-harsh-letter-received-kensington.html

 

http://www.consumeractiongroup.co.uk/forum/mortgage-companies/19662-maroonfox5-mortgage-express-lost.html

 

http://www.consumeractiongroup.co.uk/forum/mortgage-companies/36778-charbydis-platform-claim-struck.html

 

It is recommended no new ERC claims are made.

 

The mortgage companies have greater litigation departments and more experience of litigation than the banks and are not going to back down so easily.

 

All fast trackers should seriously consider withdrawing their claims to avoid incurring further costs. Try to negotiate out of payment of costs to date. Make an offer to withdraw conditional upon them not pursuing costs. Do not withdraw your claim from court until you have negotiated out of costs.

 

All those with small claims should also consider withdrawing but should also be mindful of the fact that they are liable for costs incurred pre allocation and therefore they may be better off continuing to trial. Do not withdraw your claim from the court until you have negotiated out of costs. You may well be able to negotiate a settlement of a lower amount.

 

Whilst the risks are greater regarding ERCs the claims are not without merit. Seek legal advice if in doubt.

 

Also small claims claimers should also be wary if there is a legal indemnity clause in the contract as mortgage companies are enforcing these to claim their legal costs.

 

Other mortgage charges:

 

There have also been 2 defeats on other mortgage charges:

 

http://www.consumeractiongroup.co.uk/forum/mortgage-companies/36778-charbydis-platform-claim-struck.html

 

 

http://www.consumeractiongroup.co.uk/forum/mortgage-companies/59031-barry-swift-court-date.html

 

Charbydis because 15.00 was deemed reasonable. Barry Paul because he was unable to prove the charge was a penalty. Claimants should be aware that the burden of proof is on them to prove that the charge was a penalty.

 

In addition you should also be wary of the mortgage indemnity clauses in the contract. This can make you liable to pay their legal fees for defending your claim and is likely to be more than any charges you have paid.

[zootscoot]

If you've got a no costs order you could end up paying more if you withdraw. I would say you are in the perfect position to continue. You need to be aware that the burden of proof rests on you to prove that it was a penalty and therefore a CPR part 18 request for information is vital.

[zootscoot]

They have applied for a strike out of the ERC but not the charges. If they get the strike out, will I still be liable for costs even though the remainder of the claim will continue?

 

If you contest the strike out and lose you are likely to be liable for the fees attributable to the strike out.

[zootscoot]

You've already paid your court fee and allocation fee. There is no trial fee for small claims. Although the further costs you could incur would be for your bundle.

 

Your options are:

 

1. Withdraw now. - You lose your court fees and a/q fees already paid and they could seek their costs pre -allocation.

 

2. Withdraw on condition they will pay your fees and not seek any costs from you.

 

3.Try negotiating a lower settlement eg half of your claim + Costs

 

4. Pursue the full amount to court. If you lost you would lose the court fees that you have already paid. You would not be liable for their pre-allocation fees but would have to pay their travelling expenses etc.

 

Hope this helps

 

Zoot

[zootscoot]

I am in exactly the same position, i am with GMAC and currently paying 10.29% variable, i telephoned them to see if i could change product because the way it was going if the interest rates kept going up i wouldn't be able to afford to pay the mortgage and they said they wouldnt. I have just been offered a mortgage with Yorkshire Building Society paying just 6.03% so i have no choice but to leave GMAC but in order to leave i have to pay a 4% redemption penalty which is approx £3500, do you think that this could be a good argument.

 

If you have not paid it yet there is still a chance to negotiate your way out of this. If you start a thread I'll advise further.

 

All the best

 

Zoot

[zootscoot]

I am in exactly the same position, i am with GMAC and currently paying 10.29% variable, i telephoned them to see if i could change product because the way it was going if the interest rates kept going up i wouldn't be able to afford to pay the mortgage and they said they wouldnt. I have just been offered a mortgage with Yorkshire Building Society paying just 6.03% so i have no choice but to leave GMAC but in order to leave i have to pay a 4% redemption penalty which is approx £3500, do you think that this could be a good argument.

 

Hayley, Have a look here:

 

http://www.consumeractiongroup.co.uk/forum/other-institutions-successes/44835-g-mac-early-redemption.html

[zootscoot]

I'm at the stage where 'particulars of claim' have been requested again due to an extension period asked for by solicitors. If I pull out now will I incur costs. I've already spent £250 to get this far.

 

How much are you claiming?

 

Have you been allocated a track yet?

[zootscoot]

Can someone preferably a moderator advise if its ok to claim late payment/failed direct debit charges against mortgage companies.

 

 

 

Late payment and failed direct debits are clearly a charge for breach of contract. However, their recovery is still less clear cut than normal bank charges. This is because the process is not wholly automated and will require greater manual intervention and for failed d/d the mortgage company will incur a charge from the bank also. Mortgage companies are more equipped for going to court to argue these cases so the likelihood of ending up in court is much greater, particularly if it is a sub-prime lender.

 

Barry Paul lost his case solely on the charges rather than an ERC.

 

If you do decide to take these on then the draft directions is a must.

 

Hope this helps

 

Zoot

[zootscoot]

Zotscoot, my claim is for £5k, defence not due to be submitted till 28/2/07 by sols. hence no track allocation as yet.

 

Withdraw now before they run up any costs.

[zootscoot]

No allocation is not automatic. You have to be notified by the court of allocation.

[zootscoot]

Matt if you have not issued yet its best not to.

 

Halifax paid mine out but they are now defending claims. If you carry on you stand to lose your court fee, your allocation fee and Halifax's reasonable costs and disbursements for things such as travel expenses. Barry Pauls small claims costs were £500. There is also a risk that it could be fast tracked and therefore your costs could be greater.

 

Homee,

 

If your claim has not been allocated yet you are potentially liable for costs to date. You need to be careful in negotiations for withdrawing.

[zootscoot]

The track allocation value is simply a guideline. The judges may move claims out of any track if they feel the case is complex or involves a point of law of public importance.

[zootscoot]

Do i claim redeption fees or not? I no longer have a mortgage coz i split with my husband but we had to pay about 4 grand, can i claim this?

 

NO!!!!!!!!!

[zootscoot]

If they've not paid it yet there is a chance they can negotiate out of it.

 

There is a thread here:

 

http://www.consumeractiongroup.co.uk/forum/other-institutions-successes/44835-g-mac-early-redemption.html

 

Although I would advise against taking court action for recovery. There may also be a chance they could hold up the sale if they dig their feet in!

[zootscoot]

in light of recent frightening events,I've just had a bit of a result.....I can't go into too much detail,but I have been able to settle out of court for £1000 out of a £4200 ERC claim.

 

OK,it's not ideal,but it's better than going to court,losing and getting beaten around the head with a horrendous costs bill.....

 

 

It certainly is! Fantastic news Licky!

[zootscoot]

Was this a secured loan under 25K?

[zootscoot]

It didn't stop the clauses being held valid in Morgy's and Charbydis' cases. Both ERCs and therefore the contract had ended.

[zootscoot]

What do you mean when you state that the terms were held valid?

 

I would have thought it more likely that Morgy etc became liable for costs post issue of their claims under the indemnity principle, not because there was a clause in their contracts with their mortgage companies

 

No it was made explicitly clear that the cost were payable under the contractual provisions

 

Here are some relevant extracts

 

JUDGE HICKINBOTTOM: Yes, the usual costs rule is

that an unsuccessful party should pay the successful party's costs. Although costs are in the discretion of the court, that is the usual basis of costs orders. But in this case the Defendant doesn't rely upon that general rule, but relies rather upon a contactual provision that requires you to indemnify the Defendant against any costs in connection with the advance in relation to the mortgage, and one or two of the specific provisions have been referred to.

JUDGE HICKINBOTTOM: as I explained, although costs

are within the discretion of the court, the usual order would be that an unsuccessful party pays the successful party's costs of a claim. That is the order that I would have made but for the contractual provisions. That would have meant that I would have assessed the costs on a standard basis, the particular basis set out in the Rules, which is based upon reasonableness of those costs.

However, in this case the Defendant has a contractual right to recover any costs in connection with any advance under which - this is Condition 49 of the Mortgage Conditions - you are responsible on a full indemnity basis for costs, including legal expenses, in connection with the advance, and in particular to remedy or secure the performance or observance of any terms of the mortgage, including the term in relation to the ERC. In my judgment, the Defendants are entitled, on a contractual basis, to indemnity costs in respect of this claim. Whether they enforce those costs against you is a matter entirely for them.

Dealing with the quantum of costs, I have got the statement of costs, Mr. Innes.

MR. INNES: Yes. Could I draw your attention to one matter in

relation to quantum? You will have seen the skeleton argument. That had to be put in by the end of December, according to the order. I hate to say this to add misery to misery, but in the schedule there has been an allowance for my brief fee, but what has been omitted and only came to light yesterday when we saw this was my fee for drafting those submissions, so that would be £600 in addition. I need to mention that.

JUDGE HICKINBOTTOM: Under the contractual provisions, effectively

I should look at this schedule of costs on the basis that I am assessing it on an indemnity basis, should I?

MR. INNES: Your Honour, I don't read it that way. Indemnity

costs has a definite meaning under the CPR, which is that where there is a doubt, it reflects the burden you apply in resolving that doubt. But where this is a contract provision, what it is saying is you pay all our costs. I don't believe, within that contract, it is open for you to say that this is unreasonable. I think you just have to leave it as it is.

JUDGE HICKINBOTTOM: I think that is probably right. Of course,

you counterclaimed specifically in respect of these costs. You need not have done so.

MR. INNES: Yes, I thought it was practically wise. I think that

is right. Particularly in a mortgage case, the order is just silent about it, but in the circumstances of this case it is probably better to make it specific, so as to avoid any argument later on, but that would probably be right.

JUDGE HICKINBOTTOM: In relation to the £600, VAT will be

attracted to the £600 in any event. What is the total claimed there?

MR. INNES: £4,558.30.

JUDGE HICKINBOTTOM: Again these are formalities, but you actually

want judgment for that sum.

MR. INNES: Yes. I think the correct order would be that the

claim is then struck out.

JUDGE HICKINBOTTOM: And judgment on the counterclaim.

MR. INNES: Yes.

JUDGE HICKINBOTTOM: I can tell you what would normally happen. If you still had a mortgage with this company or any mortgage company and they had obtained a litigation success against you - let's put it like that - they would simply lump the costs onto the mortgage, and costs as an issue wouldn't be raised in this court at all because they would have the contractual right to do that. The practical reason why they have issued a counterclaim in respect of these costs is that is the only way they can recover the money from you because there is no ongoing mortgage.

but it seems to me that is a contractual right. The Defendants are entitled to that sum, and they are entitled to it by way of a judgment in that sum because it is a counterclaim. It is not a court costs order. It is a substantive counterclaim against you.

Well, the order I will make is that I will make an order striking out the claim. I will make an order for judgment on the counterclaim in the sum of £4,558.30 and, to make things absolutely clear, I will make no order for costs, which means that because costs have been dealt with in the substantive action, you will not face any further application for court costs against you.

 

 

Come on mods lets have some help here as if you walk away then these companies are watching like wolves.

 

 

I've no idea where you get the idea that we are walking away. Far from it I've been working round the clock since this decision.

[zootscoot]

There have been severl successes from Gmac for late payment fees and charges. Including one just last week. Thay have been paying out in full and not using the legal indemnity fee.

 

They will however, try every delaying tactic in the book and may try to threaten to multi -track. They generally pay out a few days before court.

 

Best of luck

 

Zoot

[zootscoot]

If the case is multi- tracked (its very unlikely the courts would allow it) the case will be heard in the High court in London or one of the mercantile courts. This means only barristers can be used and costs are unlimited.

 

See Sandy's thread here:

 

http://www.consumeractiongroup.co.uk/forum/other-institutions-successes/7223-sandy-gmac-rfc.htm

 

The legal indemnity clause is a clause in the mortgage agreement which states you will pay their legal costs involved in any matter arising from the mortgage agreement.

 

Gmac have threatened to use it but have backed down and paid out in full

 

See Donelly's thread here:

 

http://www.consumeractiongroup.co.uk/forum/other-institutions-successes/32915-these-guys-gmac-don.html

[zootscoot]

Hi Maguire,

 

As your claim is in the small claims court the risks are less. Some companies have sought to use the legal indemnity clauses in the contract to recover their legal costs in defending a claim, although as of yet these have not been enforced in small claims.

 

Best of luck

 

Zoot

[zootscoot]

In all the lost ERC claims the issue of whether the charge was a penalty was not even considered the claims were lost on the grounds that there was no breach of contract.

 

Regarding non erc claims much depends on who you are claiming against. Some are safer than others to chase.

[zootscoot]

GMAC has paid out charges in full on several occassions including one relatively recently. They will threaten to multi -track and counterclaim but so far paid out all a few days before court. Depends how much your nerves can stand!

[zootscoot]

Only you can decide if you want to make your claim.

 

Here are some Gmac successes on charges:

 

http://www.consumeractiongroup.co.uk/forum/other-institutions-successes/65715-gmac.html

 

http://www.consumeractiongroup.co.uk/forum/other-institutions-successes/32915-these-guys-gmac-don.html

 

http://www.farn-ct.ac.uk:8080/cms/page.php?site=public

 

Another settled a couple of weeks ago just before court but there was no thread.

 

All the best

 

Zoot

[zootscoot]

I haven't had a nose through this thread for a while but thought I would post with an update. I had a barrister do some research for me on the ERC issue and, without going into too much detail as it was a 24 page report, it would appear that based on his findings these claims are dead in the water. Whilst I appreciate this message has been broadcasted loud and clear on the CAG site for a couple of months now it's always nice to have a second opinion. Sorry not to have better news.

 

Any chance of seeing a copy of this report?