Debt Questions forum. General questions on debt issues.

Moderators: TalbotWoods, JaneClack

By epsonsx435w
#295043 Hi All,

I believe this may be fairly unique and after trawling through the forum couldnt find anything related or similar.

The query is two fold so I have split them to enable a response for each (I have limited the info provided for fear of being located by them before I receive advice!):

Issue 1:
A couple of years ago I had a dispute with my mortgage lender regarding the interest rate I was paying on my main mortgage account. Bizarrely no-one could tell me each time I phoned and it rumbled on for a month or two. I then informed the company that I would take legal action if this could not be divulged. Eventually they came back to me with the rate but as a gesture of goodwill said they would stop interest on my account.

Now, some 24 months later, interest is still not being applied to my account! As I was in arrears I was making overpayments to catch up the deficit however all this time this has just come off the balance.

Do I confront them? Do I just keep paying and watch the amount reduce by what I pay each month? Legally could they "whack" all the interest back on after I catch up the arrears (about another 6 months)? What are my rights, what are their rights?

Issue 2:
I also have a secured loan with the lender, last month I received a letter that they had not adjusted their interest rates when they should have over a period of time, meaning my monthly amounts would not cover the balance each month with interest applied. As a gesture of goodwill they deducted a couple of thousand off the balance. Does this seem normal practice?

Summary:
My account has been nothing short of problems (90% their end) but clearly at present I feel like I am winning (i.e. interest not being applied to the main mortgage). What do you think I should do?

I have settlement figures for both accounts and both just show the low value (i.e. no interest on the main account, so wouldnt think they are adding it back anytime soon).

Any help much appreciated with my dilemma and clearly I would be more than happy to provide further information off this thread to anyone who could help me.

Many thanks

Epson (clearly not my real name, my printers!, but no clues I understand is the aim here!)
By simont23
#295073 They have obviously made an error or they are not applying interest to the loan because it is accruing in a separate account.

If it is a mistake, I suppose you could hope they do not discover it and it runs on until the final payments. If you paid it off to a zero balance and got your deeds back, they would be snookered if you transferred the property. However, I wouldn't hold your breath.
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By TalbotWoods
#295103 Hi epsonsx435w

This is an odd one to say the least and completly falls of the remit of normal debt advice, however....

There were a couple of test cases a year or so ago, where mortgage companies found errors in there calculations , etc and then applied them and the arrears to the account holders.

In one case ( and it is the most pertinent) if there is reasonable beleive that the account holder knew about the error but kept quite, then they were allowed to apply, so the account holder lost.

In the other case, there was no reasonable way the account holder would know something was wrong, and that was upheld so the mortgage company lost.

So applying this to you.

Issue one, is one you are aware of so the second test case applies, yes they can come back and bite, ergo you need to talk to them.

Issue two, as it secured against your mortgage, then cases one would have applied, but they have pre-empted this by making the offer (which I assume you would have accepted), thus stopping any reason chance of legally challenging this.

Issue 1 talk to them
Issue 2 not normal, but they have pre-empted
User avatar
By TalbotWoods
#295203 Write, that way if they do bugga all you can show you have contacted them, so they made an error after you notified them (which is a different ball game)
By epsonsx435w
#295823 Thanks again Talbot.

To cover the queries above, I have dug out the relevant paperwork to give you further information.

Query 1 - Main Mortgage
After making a complaint back in 2009 about the mystery regarding my interest rate, they agreed to stop interest for three months (I have just received my latest statement and interest hasnt been applied since the date of this letter to current date).

My complaint was that I queried my rate on several occassions and each time I received a reply "this is unusual, I cannot see it, I will ask a manager", each time they still couldnt find the rate and said they would come back to me, they didnt each time.

Query 2 - Secured Loan
Letter received this month - i have taken the key paragraphs from the letter and provided below:

"We have recently observed your account and noticed your monthly payments have not always changed when your interest rate on your account should have changed.

As your rate has not changed to reflect the fluctuation, you have not been paying enough to make sure your loan is paid off within the agreed term.

Since you were last notified of a change, we have calculated the total underpaid to your account is £XXXX (just under 2k) and we have reduced your account balance as a gesture of goodwill.

Your monthly installment should be increased...." (I did call and they said it wouldnt increase??).

Any additional thoughts now please based on the above?

I did call a specialist Lawyer to get some feedback (from a large corp company) but he told me within his 30 years experience never heard anything like this!!

Many thanks in advance.
Epson

PS - Isnt a gesture of goodwill effectively an admission of guilt for a mess up? Also, it didnt offer me the chance to accept etc, just said it had been applied?