Extended Mortgage term and Buildings Insurance Premiums.

[Still Waving]

You can also test out my theory by forgetting MIRAS, just go with the % and the quoted rate and look at the Monthly Capital & Interest Payment Breakdown, i believe it will show i am correct ?

If you're happy that you've got it correct, I'm not going to argue about it, since I don't KNOW how they calculated your repayment and whether they were using 12.75 or 13.5. When I worked for a building society about 100 years ago they had comprehensive tables showing repayments at many different rates of interest over various terms, from which they extrapolated the figures for each specific mortgage advance.

[Guest]

I'm gonna recap here (not verbatim but almost), .. it was widely reported in the press around 2007 that the Ombudsman had ruled that AN had failed to notify its customers that their term may be increased if they did not keep up to date with rate changes. I'm uncertain how that relates to me as i did know that if your closing balance was greater your term could be extended. Also i don't ever recall getting rate change letters (there is only one in my SAR bundle, and it doesn't actually have the rate on it), but in any case i can firmly establish i went in and asked what i had to pay. The press reports go further..........The Ombudsman found that AN routinely extended mortgage terms in response to interest changes around the 1988-1993 period. On its own that makes absolutley no sense to me. The Ombudsman publishes all its findings/cases/rulings etc.. but only as far back as 2012. But of course as a public body they do hold the information, i've already requested it. 20th December i should have hold of it.

In the meantime i will wait for the ruling, wait for the interest rates and i'm going to take a punt at a further mortgage rate enquiry armed with new info. Be back when i have some news, Cheers

[Roger]

The problem really is at the start your repayments are mostly interest with small capitol repayments. BUT if they keep putting you back to the start again then the term simply extends doesn't it! Its playing SNAKES and LADDERS . You keep finding yourself back at the Begining and it seems were never formally told!!!

[Still Waving]

I've been looking through the '93 and '94 statements. '94 is the first one which is fully and properly set out (apart from your queries over the coding). It seems that during '93 in particular there was regular communication with the Society about what payments were needed. '94 is pretty much self-explanatory, so I'll concentrate on '93.

You may already be aware that they were taking any monthly overpayments and crediting them to a sundries account, where the insurance was debited. Some smaller amounts and two more significant ones on 4 Oct and 8 Nov. On 4 Oct I think £129.68 was paid, with £79.68 being the monthly instalment and £50 paid to Sundries. I think £150 was paid on 8 Nov, with £102.09 going against the monthly debit and £47.91 going to Sundries, which cleared the balance of insurance.

I looked at the arrears situation during '93, and for much of the year it was clear, then going into credit in Nov and Dec ending at 15.05 credit. This was brought forward into '94 and your first monthly overpayment in Jan increased it to 18.95 credit, as can be seen on the statement. Unfortunately the overpayments transferred to Sundries in '94 were mostly very small leaving an insurance balance of 100.49, which was debited to the main account in Dec. Consequently your account balance only reduced by 41.37.

[Still Waving]

Still Waving you are correct. I've realised, the bottom bit should really be placed at the top then it makes sense. The last column is "current arrears" . But this has blew my mind, they appear to show a positive rather than a negative ? Also i can't understand what i am seeing, you might understand it. Near the bottom of the arrears column you will see a figure 81.79, then underneath you will see 22.64- (twice) . 81.79 + 22.64 = 104.43 . This figure is the same figure as the payment on 4th December and also its the same figure at the end of the arrears column. Gets more crazy... 81.79+22.64+22.64= 127.07 the same as the 31st December payment. Can you figure it out ?

Not sure if I've already answered this question re the '91 statement, as this thread is rather sprawling. In case I haven't, here goes -

In the arrears column a positive figure is a deficit and a - figure is a credit amount. The unchanging 22.64 figure is because the entries corresponding to those are the posting of interest and the Miras allowance. Your payment of 127.07 on 31/12 turned the deficit of 22.64 into a credit of 104.43 which as we said earlier was carried forward to '92.

I haven't yet tried to figure out why the arrears figure stayed the same for a number of months earlier in the year.

[Still Waving]

Further to post #140 - I've been looking at the '91 arrears figures, and something is definitely askew. According to what I have just run through, if the 209.35 arrears following the Jan payment is correct then they would have stayed above £209 through the year, and even after the 31/12 payment would have stood at £187.13.

So the question is why did they suddenly drop to 82.42 at beginning March (after just two payments)? Was that to correct an erroneous figure (209.35), or was the 82.42 erroneous?

Incidentally I saw in an earlier post that you said the balance at end '90 was £13196.84. In fact it would have been £13,324.59. The other figure is following the Jan '91 payment.

[Still Waving]

I've been revisiting the crucial question of the repayment calculation at the outset of the mortgage. I accept that ML,s method is probably the more accurate. So I agree that at 12.75% the repayment would have been approx £112.81.

At 13.5% it would have been approx £118.29.

So having thrashed this around between us for a while, my feeling now is this:

Whatever may have been in the original offer document (in late '88 ?), by the time of their first letter after completion, 13/2/89, IMO the new rate has been applied and they correctly advised that the monthly payment was 118.69.

They said "I am pleased to confirm details of your mortgage account and to provide information for your guidance"

They go on to say "Your monthly payment is £118.69, to reach the society by 23/2/89 ...."

They ask for a further payment of £29.01, essentially to cover the January period.

They go on to say "Please find enclosed revised completion details (were those in the SAR bundle?), as an error was made regarding the date you completed your mortgage. I would confirm that we have received the first payment of £118.69"

So everything is fine no suggestion of underpayment.

Moving on to 20/2/89 - They confirm that the insurance premium of £80.80 has been paid.They also say "There is an overpayment on your mortgage .... and I would confirm that this amount may be deducted off the March payment."

Moving on to 31 March letter, they say " I refer to your recent enquiry regarding the credit balance .... and would confirm that this figure is correct at £75.67."

To prove this credit balance they list two debits of 118.69 as part of the balance.

So, two full months after completion, and following your query as to the state of the account, everything is fine, and in fact you have a credit balance.

These letters from '89 contradict what they tried to claim years later. As Roger said in an earlier post, they didn't quote a repayment they claim that you should have increased to, because they couldn't.

(This is just to precis in one post what we have already discussed in various posts.)

[Guest]

Still Waving Many thanks for this, that is some forensic work you have done there, I know that has took you a long time to do and i am very grateful, i'd of never understood all that without your advice.

I think it re enforces what i said before i got that SAR bundle........ i'd always gone in the branch, asked what i had to pay and thats what i paid ? What had me confused was the fact i thought i had paid with no issue and to see the missing payments at the beginning of 92 and 93 was a shock to me. But now you have explained about that "sundry account" which i had never realised i think i can make a calculated guess. I think it would be fair to assume i have gone into the branch to pay in January 1992 only to find i was in credit, there was an over payment carried forward, also there was money in the sundry account (why the sundry account was never paid off the previous year, i've no idea), then when the insurance has come about or thereabout there was a shortfall. They must of contacted me and judging by the payments you can get a sense of where i have scrabbled about to put it right. It appears similar for the start of 93 ?

To answer your question there was no revised completion details in the bundle.

I feel the 91/92 statements are heavily cropped and not by accident. I'm now not suprised the 89/90 statements are not there. To my mind thats deliberate.

Your point about the arrears suddenly dropping is an excellent observation. I'm not sure where that all leaves me though up to now other than my account seems a cataloge of errors.

[Guest]

I wonder.............. the SAR provides me with access to my personal details, which they're sent. Maybe there is a master file of figures for my account with no personalised details on, just account numbers and payments and rates and if so would an Ombudsman get access to that ? For a live and current account it would make no sense for them to rely on incomplete microfiche ?

[Still Waving]

Let me explain why i think its very important. Their initial calc:
£13,375.69, @ 25 years @12.75% they get to £118.69 , i get the calc to £112.81 so if i'm correct they are overcharging by £5.88. Some £70 over the year. If they had to refund that over the course of the years 1989 to 1992 it would get very complicated for them, hence the transfer to a new system and extend everyones mortgage and not tell them. No one would know.

Here is an initial offer from 1988, it never completed at the time. But you can use their figures again and see the same mistake:

I've looked at that letter from '88, and it looks to me that they have deducted MIRAS at 20%, which is clearly wrong. An individual can make an error. I do think, though, that the 118.69 is correct at 13.5%.

[Guest]

STOP !!! Thanks for your help, they've had us looking in all the wrong places don't need to look anymore. There's plenty amiss in what we found. But what i done was this....... its the first concrete payment with an interest rate we can check..................



The correct figure should be £80.89, so its £1.21 adrift. So i went foreward 1995/1996 etc.... and taking into account the MIRAS change as it tells you when it is on the statements every payment is wrong going forward, every single one some of them by £3 or £4 pound. I'll scan then up tomorrow.

I also came across this................ they said loan start date 01/01/1993 with whatever balance and a term of 370 months , thats on one of my very first posts...... but look at this :


Hold on , just gonna scan it.....

[Guest]

[Guest]

STOP !!! Thanks for your help, they've had us looking in all the wrong places don't need to look anymore. There's plenty amiss in what we found. But what i done was this....... its the first concrete payment with an interest rate we can check..................



The correct figure should be £80.89, so its £1.21 adrift. So i went foreward 1995/1996 etc.... and taking into account the MIRAS change as it tells you when it is on the statements every payment is wrong going forward, every single one some of them by £3 or £4 pound. I'll scan then up tomorrow.

I also came across this................ they said loan start date 01/01/1993 with whatever balance and a term of 370 months , thats on one of my very first posts...... but look at this :


Hold on , just gonna scan it.....

Actually my math is incorrect there as i didn't realise the term said finish date of 7th November 2023, but in anycase it doesn't matter the term. That figure of £79.68 does not even meet an interest only payment for the balance shown £13,129.08 ?


* Edit........ ignore me, i'm going mad. But all the payments are adrift. I'll scan then up in a bit.

[Guest]

Sorry just had a steep learning curve. Interest payments do not change with length of term, only the capital part does

[Guest]

I'm going to ring them in the morning and ask what my payment is, i think its £71.74, i just pay £100. I'll ask them my interest rate, start date and start balance and try it that way. I'm just confusing myself now. 33 years of this, you'd think i'd have the hang of it by now !!