Mortgage Arrears caused by benefits shortfall

[PlanB]

Re: Reclaiming Mortgage Arrears Charges

There has been one thing that has been playing on my mind since I took out my mortgage with Paratus...(previously GMAC) and I know I may be flogging a dead horse here but nevertheless I am just so gutted how I ended up with an interest only mortgage.

I will have to start a new thread on how that happened as it does not involve mortgage arrears.

Why start a new thread if it relates to this mortgage which now has arrears

I'm not sure why you'd be gutted to have an interest only mortgage because the monthly payments are a lot cheaper and the DWP only pay the interest not the capital repayment on a mortgage so you'd be accruing even more arrears You've been having your mortgage paid by benefits for the last six years which is pretty good going. Since January 2009 it's been capped at two years maximum for some people on certain benefits.

[transformer999]

Re: Reclaiming Mortgage Arrears Charges

I know I may be sounding like I am ungrateful but far from it...of course I am happy that I am not having to pay too much and received so much help from the DWP.

If it were up to me then I would have been paying my own mortgage...and would only have had approx 9 years till it finished.

I originally bought my house (joint with OH) in 1998 for £59,000.00. This was a capital & repayment mortgage.

In 2005 we had to remortgage our house to pay off my OH's bankruptcy debt to the Trustee...that was £40,000.00....

The creditor who made my OH bankrupt also had a judgment against me for £2,758.00...and also placed a restriction on our property. GMAC (now Paratus) would not release mortgage funds until the creditor agreed to remove his restriction.

The Trustee agreed to remove their restriction but the creditor was not agreeing until we agreed to pay him £6,191.60. Back then I did not know that the creditor was not allowed to charge interest on the judgment he had against me for £2758.00.

The mortgage that was arranged with GMAC was also on a capital & repayment mortgage but because the creditor was asking for money that we expected...we had to up our borrowing to £105,000.00 and change our mortgage plan to Interest only.

In 2010 I successfully managed to prove in court that the creditor was not entitled to have charged interest on that judgment.....and recovered the overpayment with interest.....but that still left me with an interest only mortgage.....with no repayment vehicle in place.

This was a long battle....and back then I did not know jack shite about anything.....and the trustee knew that and so did the creditor....the solicitors who were dealing with my mortgage were also a waste of time and money..but at least I did not lose my home which is the main thing....but I should have been advised at least my sols that the creditor was not entitled to claim interest on the £2758 judgment...had they done that I would only have had to borrow that amount and not £6k....and could have had the capital & repayment mortgage as I initially applied for.


There............hope that has not confused you If anyone would like to have a read in their spare time I have posted up a copy of my witness statement which explains the waffle above better I was the Claimant....

[PlanB]

Re: Reclaiming Mortgage Arrears Charges

I'm not confused but you may be A completely different creditor (A) charged you interest that they shouldn't have charged you on a debt but after taking them to court that got that sorted and they paid you back the overcharged interest

I don't see how that impacts on the interest only mortgage you took out with GMAC (B) If you had been forced to borrow more money at the time to pay the other creditor (A) what the court subsequently decided you didn't owe them then you may have had a claim at the time for the cost of doing that against the creditor (A).

Unless I've misunderstood all that's happened is while paying Creditor A you weren't able to pay Creditor B more money each month to reduce the capital on that mortgage. But did you lose any money because of that

You could argue that by not being able to pay down the capital on Creditor B's loan you'll ended up paying more interest in the long run but since that's being paid by the DWP that would simply reduce the payments they make but you'd have nothing more in your pocket.

But what stopped you paying down the capital on Creditor B once the court had settled the matter with Creditor A and you got a payout, and what's to stop you paying back the capital of your own free will ever since. Most mortgages permit you to make overpayments without a penalty but check your Ts & Cs.

[transformer999]

Re: Reclaiming Mortgage Arrears Charges

yes I agree planB.....I think what I have been thinking and believing is that.....IF the creditor (ex landlord) had not demanded £6191.80 and only demanded payment of £2758.00 which he was only entitled to...then I would not have had to borrow further money from GMAC.

It was because of the extra borrowing that made my capital & repayments more higher and out budget at that time did not allow us to meet those repayments....and that is why we had to switch to an interest only mortgage. I wish then I knew more...but we grow and learn...and bloody hell sometimes I think have I learned anything?

I know this has nothing to do with the DWP making payments....I guess I am/was more pissed off with my mortgage solicitors who were dealing with setting up my mortgage with GMAC at that time.

They knew the creditor had a judgment for £2758.00 against me and he would not agree to release his charge over my house until I paid him £6191.80.....and GMAC would not release funds until he agreed...catch 22 position I was in...my sols should have advised him that he was not entitled to charge interest on the £2758.00.....but they did not....when I complained to them after they said they were only there to arrange the mortgage and not advise on what I should or should not owe.....another long story.

In all I had to borrow an extra £4,000 ish to pay the creditor (A)...and that made my capital & repayment mortgage payments too high...so had to go interest only.

Maybe this all is off the topic of what is going on at present,,,,,so have put it down to bitter an experience learned.

[PlanB]

Re: Reclaiming Mortgage Arrears Charges

It's not off topic. You're quite rightly taking a holistic look at your current mortgage problems before anything nasty happens. Better to deal with the lender direct now on any issues then to have to tell it to a DJ further down the line

No one is being judgmental about your entitlement to have all the mortgage interest paid by the DWP for the last six years I was only making the point that even though you're pissed off with the conduct of various previous solicitors, other creditors and let's not forget your OH in all this (!), it may not be appropriate to lay the blame at the feet of your current lender. If they hadn't given you an interest only loan you'd have lost the house because you couldn't afford a repayment mortgage

And better still it's been in effect an interest free loan for you since the DWP has paid all that for the last six years. Every cloud has a silver lining

[transformer999]

Re: Reclaiming Mortgage Arrears Charges

Right just got off the phone with Paratus...they said that my account is not with the collections team anymore but with credit control. They said that the DWP started making reduced payments in Sept 2011....before then I was in credit as they were paying more.....they also said that it was good that I called and they are going to make a note and send me out an I & E Form to fill and return.

Then I need to call them to arrange a repayment plan. These arrears are for the shortfall of money the DWP have been making...not arrears charges.

I just have to figure out a repayment plan and was thinking what a realistic figure would be...so that one I have made it I will stick to it.....there is approx £900 to pay....I would love to divide that by 99 months....but I know I can't...and each month there will be more arrears as the DWP are only paying £164.....

Good that I have a chance to sort this mess out...and try and nip it in the bud..

[transformer999]

Re: Reclaiming Mortgage Arrears Charges

It's not off topic. You're quite rightly taking a holistic look at your current mortgage problems before anything nasty happens. Better to deal with the lender direct now on any issues then to have to tell it to a DJ further down the line

No one is being judgmental about your entitlement to have all the mortgage interest paid by the DWP for the last six years I was only making the point that even though you're pissed off with the conduct of various previous solicitors, other creditors and let's not forget your OH in all this (!), it may not be appropriate to lay the blame at the feet of your current lender. If they hadn't given you an interest only loan you'd have lost the house because you couldn't afford a repayment mortgage

And better still it's been in effect an interest free loan for you since the DWP has paid all that for the last six years. Every cloud has a silver lining

DWP saved my life when it needed saving.....and helped me so much and for that I will be eternally grateful....and that is one of the reasons that I am happy to start work asap...so that I can give back what I have been receiving.

I really am/was blessed with the help I was getting and I am not blaming my current lender as you say I could have lost my home....so they too were a Godsend...as you are/were to me planB ...and were there for me just when I needed you.

I am more than happy to deal with these arrears....and sort this matter out best I can.

Thank you so so much...and FP....for all your boosts of support.....if I had wings I would be flying over Big Ben as we speak

[PlanB]

Re: Reclaiming Mortgage Arrears Charges

Right just got off the phone with Paratus...they said that my account is not with the collections team anymore but with credit control. They said that the DWP started making reduced payments in Sept 2011....before then I was in credit as they were paying more.....they also said that it was good that I called and they are going to make a note and send me out an I & E Form to fill and return.

Then I need to call them to arrange a repayment plan. These arrears are for the shortfall of money the DWP have been making...not arrears charges.

.

I told you so

[transformer999]

Re: Reclaiming Mortgage Arrears Charges

I told you so

only because I told you first ....naaa yes you did planB....so then what is a reasonable repayment planB Miss Housing expert?

If you would be so kind to help me on this?

I am £900 in arrears and each month I know there is going to be a shortfall....hopefully when I am in full employment I will want to pay the full mortgage myself but until that happens I am going to have to set up some kinda arrangement that is acceptable to Paratus and affordable to me to...

[PlanB]

Re: Reclaiming Mortgage Arrears Charges

only because I told you first ...

Ahem. You started this thread in the *Reclaiming Bank Charges* section

Find out why the DWP are underpaying your mortgage interest in case this is an error on their part which needs to be put right I have a hunch that it may be to do with the interest rate on your mortgage being higher than the flat rate paid by DWP which is linked to BBR so nothing you can do about it GMAC rates are always high after you come off the fixed (low) rate period.

It looks like you've caught this problem just in time because if your account has been escalated from the Collections Team to Credit Control then that's one step closer to issuing possession proceedings

Your call to them this morning may have stopped that from happening

[transformer999]

Re: Reclaiming Mortgage Arrears Charges

Thanks ladies....last thing I need right now or EVER again is another possession claim against me. I am still waiting for my sol to get back to me on the first one with Blemain......I hope that it is good news as I really want to tie up all these nightmares as best I can.

[transformer999]

Re: Reclaiming Mortgage Arrears Charges

I have received a letter from Paratus who have sent me an I & E Form....and confirmed that I had a telephone conversation with them on 9 Oct 12.

I am ok to fill and return the form but was wandering how much I should write down to show how much I can afford each month. As I am still on benefits and have not received a proper wage yet....manager still waiting for my CRB...

I need to show an acceptable amount and a realistic one....so that Paratus accept and not start any legal action...also an amount that I will stick to paying like I am Blemain.

I can adjust the I & E Form to show my outgoings less...but really need some help with how much I should or other people have offered and lenders accepted proposals?

[PlanB]

Re: Reclaiming Mortgage Arrears Charges

Unless they've set you a deadline to send the form back I would sit on this for a couple of days until you've got clarity from the DWP on the payment shortfall, and (hopefully) know where you stand with your Blemain secured loan, and have your new job signed and sealed

In the meantime why not give them a call to say that the form has arrived and you'll be completing it "over the weekend" to send back to them on Tuesday Every call you make will be logged on the system so keep the conversation going to prevent any misunderstandings

There's a lot happening at once with your finances but that's a good thing because you can now see a more settled future with everything sorted out once and for all

[transformer999]

Re: Reclaiming Mortgage Arrears Charges

Thanks planB.....great help you are.....I did contact the DWP & they did reduce my payments last year in September 11....something about not being entitled to so much blah blah blah...so guess Paratus were right....and as I did not pay the shortfall that is why the arrears have built up.

I will call Paratus now and tell them I have received the forms and will be filing them and returning to them by next Tuesday. I just hope that my Blemain problems are sorted out soon so I can seal everything once and for all....blimey what a hell of a year this has been for me & all just hope the finishing line is near.

[PlanB]

Re: Reclaiming Mortgage Arrears Charges

....blimey what a hell of a year this has been for me & all just hope the finishing line is near.

Me too