Extended Mortgage term and Buildings Insurance Premiums.

[Roger]

Now when i queried my term extension in 1997, they jumped straight to what they knew the problem was........... interest rates. And they tried to baffle me with science. Had they of bothered to look at my account properly they could of said allsorts, missed payments etc... but they never.

My instinct is Computer System and change over!
Before the account would have been manually calculated and audit checked by a second party. The benefit of the manual system is knowledge of the running of Accounts.
But a Computer System is a Blind animal works by assumptions and sometimes by presumptions. So on a specific cut of date calc interest for the year!

Now this could indeed create a shortfall , by calculating payments over 11 months rather than 12 (late payment) and as a result increasing the outstanding Loan.
This is perfectly feasible.

I am not convinced that the Insurance is an additional payment!! On the contrary it is more likely to have been included in their calculation of the monthly payment.
That it is and was their AN insurance of the outstanding Debt!

JUST to make this very clear ! Under what they have told you THERE WOULD HAVE TO HAVE BEEN AN INITIAL INSURANCE PREMIUM WHEN THE MONIES WERE RELEASED!! This would have shown in the first year of the Account. Subsequent year Premiums cover subsequent NOT prior YEARS!

It simply enough because the Insurance Premium was Either against the Property OR against the outstanding DEBT!
Ask them the sums assured for!!! and on what basis!!
Mortgage protection! I say this because I don't believe it should have been charged to YOU that it was actually a hidden cost within their package! For their benefit to cover their business risks.

You should ask for this and especially the Amount Insured!!

If this initial Premium was shown on that first payment how come you have been dumped with an annual cost added to the outstanding Loan every year!
Over 30 plus years a £50 annual premium (£1500) but when added yearly to the oustanding Loan AND paying compound interest on this would create a not inconsiderable increase in the Loan!

Now when i queried my term extension in 1997, they jumped straight to what they knew the problem was........... interest rates. And they tried to baffle me with science. Had they of bothered to look at my account properly they could of said allsorts, missed payments etc... but they never.

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:

Ok, just come off the phone to the SAR team. The 89/90 statements are not available, so that the end of them. Team was suprised i did not have the interest rates pre 1994, so they're going to get them sent out to me.

A bit of explanation is called for here. Normally any short fall (arrears) at 31/12 is capitalised (ie forms part of the balance carried forward to next year and on which the interest is calculated. So there is no arrears carried forward at 01/01. Similarly, if overpayments had been made, they would have reduced the balance outstanding and so interest would be calculated on that lower amount.

I am guessing here, that in this instance you had been advised in December '91 that to keep the account up to date a payment of £127.07 was required. Unfortunately, it looks as though it was paid AFTER the interest calculation for the next year had been posted. Therefore they had, unusually, to bring forward a credit balance to '92. The exact circumstances may not be as I am guessing, but the principle remains the same.

EDIT: Principle remains the same!

Still Waving


Thanks for this, you've come up trumps for me again with your explanations of stuff. I think i have got this now. I doubt i will get the 89/90 statements but might not need them to prove anything.

At the start of the 1991 statement i can deduce that my closing balance on December 1990 was £13,324.50 and i can see like you say they have forwarded my credit balance so the true position at the end of 1991 is a balance of £13,401.87 . So my payment of £127.07 not making it on time plus the unpaid ins.premium of £51.93 (a total of £179) has increased my balance by £77.37 .

Now you have explained to me previously how only a small amount of the capital is paid off initially. And the higher the interest rate then the less capital is paid off. If my assumption is correct and the closing balance @ Dec 1990 was infact £13,324.50 then its not to far away from where you would expect it to be. For most of 1990 the interest rates where about 15%, i'll seek clarification of rates later today with them. If thats the case then it would show that my account during 88/90 was not infact short, contrary to their assumption in 1997 letter. I believe that it would also show contrary to their assumption that i did not increase payments, that it would show i paid in the branch at the requested amount.

So , why am i interested in their initial calculation ? I believe it was wrong, and i'm sure when i get the rates i'll find that the payments for 1991 are wrong, i believe they have been over charging. My late payment at the end of 1991 cost me dearly i can see, and also whatever went on in 1992 didn't help matters. I must have been like Mr.Magoo bumbling around thinking i'm paying the right amounts and leaving a wreck of a mortgage account behind me ! :-) I'll go get them rates..................

I'm not clear why you are bothering with that. Their letters in Feb & March '89 were written after the rate rise to 13.5%, and gave you a repayment of £118.xx, and the other letter confirmed the Feb and March DEBITS as £118.xx.

I don't know myself. Its just something that should be easy for them to explain, they don't seem to be able to or want to. It should be an easy sum. Just call it a gut feeling ? I'm going to press them again for an answer. One letter is wrong, the 1997 letter or the March 1989 letter. I'm also starting to lean towards the fact they may have switched me to interest only without my knowledge as i can't get the figures to stack up. I can post later statements if you think that would be helpful ?

"Also whilst its right to scrutinise the statements to see what i have done or not done, and granted its not the tidiest of accounts you"

I hope you didn't take any of my comments as criticism. They were merely statements of fact when looking at the figures, and no offence intended.

Thanks for posting up 1994. I'll look at that in conjunction with '93 (tomorrow). There are certainly a lot of oddities in '93, such as the several payments shown as being in March, which I suspect are really brought forward amounts: The odd small 'repayments': The "Credit Mortgage Sundry" entries: Dates duplicated, with differing 'repayments', etc.

Don't you worry about anything like that. I'm very grateful for your replies. I think i aimed that at myself really as i have been trawling through to see what i have done wrong and took my eye off what they have done. I take no offence at anything, and certainley not any facts !! Thanks again for your help.

[Still Waving]

When i do the sums of £13,375 @ 12.75% over 25 years i actually get a lower figure than they come to, i get £112.81 (allowing for MIRAS deduction).

I'm not clear why you are bothering with that. Their letters in Feb & March '89 were written after the rate rise to 13.5%, and gave you a repayment of £118.xx, and the other letter confirmed the Feb and March DEBITS as £118.xx.

[Still Waving]

"Also whilst its right to scrutinise the statements to see what i have done or not done, and granted its not the tidiest of accounts you"

I hope you didn't take any of my comments as criticism. They were merely statements of fact when looking at the figures, and no offence intended.

Thanks for posting up 1994. I'll look at that in conjunction with '93 (tomorrow). There are certainly a lot of oddities in '93, such as the several payments shown as being in March, which I suspect are really brought forward amounts: The odd small 'repayments': The "Credit Mortgage Sundry" entries: Dates duplicated, with differing 'repayments', etc.

Just noticed something after posting, or as i posted. My "Method of Repayment" highlighted in red on the 1994 statement says "1" . What do you take that to mean looking at the codes ? Its the same on all statements in that format until it changed in 2006.

Regarding the missing 89 & 90 - as Sherlock Holmes would say - it is suggestive.

I think i can go further than that now. The 91/92 statements i have posted i cropped. I didn't crop anything off them they are as they are, but they where small bits on an A4 sheet. You can tell there is lots of stuff omitted and you ( or rather i) am only getting a part scan. You would expect some more info like rates, but no.

Also whilst its right to scrutinise the statements to see what i have done or not done, and granted its not the tidiest of accounts you (or rather i ) can get a grasp that like i said i went into the branch, found out what i had to pay and i paid it. For me at least so far there is nothing jumping out at me where the term would need to be extended by 10 years, not sure if you agree? I'm prepared to be wrong. Amidst this i'm almost forgetting and thinking it is a personal thing they done to me, they done this to thousands of people at the same time. Most of the people affected where not told what would happen if they did not increase payments, that was a bone of contention but its not my contention as, like i say i went in to find out what i had to pay.

When i do the sums of £13,375 @ 12.75% over 25 years i actually get a lower figure than they come to, i get £112.81 (allowing for MIRAS deduction).

Now here is my 1994 statement, scrutinise the figures of course. But i'd ask you to forget the figures for a minute. We now have some new columns. If we compare back to the 1993 statement, i'll repost it underneath for easy viewing, on the 1994 statement the line in red is populated, its not on the 1993 statement. It looks to me like its been removed ? Also i can see that on 30th April 1993 when the account was re jigged and given an extended term it is classed as "an additional fee"................the line in yellow.

[Still Waving]

Ok i realise now that £204.92 is a March payment of £100.40 and a February payment of £104.43 . So if we look at the credit balance at beginning of 1991 it shows £209.35 . I can't understand that.

Also sorry i forgot to answer the question, no they sent me nothing about interest rates for them early statements, only later ones. I'll have to get back to them and ask, i just realised in my paperwork from them they tell me this about their records:


I guess mine is microfiche ? If so its odd that 89/90 not there ?

Without the '90 statement for context, it's not possible to say how the 209.35 figure is arrived at. Frankly that final column makes no sense. You'll note in '91 that the figure remains unchanged for months at a time when varying amounts, different from the debit figures, are being paid.

Regarding the missing 89 & 90 - as Sherlock Holmes would say - it is suggestive.

Ok i realise now that £204.92 is a March payment of £100.40 and a February payment of £104.43 . So if we look at the credit balance at beginning of 1991 it shows £209.35 . I can't understand that.

Also sorry i forgot to answer the question, no they sent me nothing about interest rates for them early statements, only later ones. I'll have to get back to them and ask, i just realised in my paperwork from them they tell me this about their records:

Understanding Microfiche
Santander stores the transactional information on some older mortgags in the form of microfiche. It lists the account movements and confirms the dates significant events took place for example rate changes.

I guess mine is microfiche ? If so its odd that 89/90 not there ?

[Still Waving]

I've no idea where they got the £204.92 figure from ?

I think I can shed some light on this.

Your due date for payment is 23rd of each month, as stated in their letter of Feb '89. Therefore at the date of their letter 13/4/92, your April instalment was not yet due.

So, first 3 months debits = 309.35. There was a payment of 127.07 on 31/12/91, making a CREDIT balance of 104.43 at 31/12/91 . Deduct 104.43 from 309.35, and you get 204.92 arrears (as per their letter).

A further debit of 100.49 had become due on 23 /4/92, making the arrears at 27/4/92 (as shown on the statement) 305.41.

A bit of explanation is called for here. Normally any short fall (arrears) at 31/12 is capitalised (ie forms part of the balance carried forward to next year and on which the interest is calculated. So there is no arrears carried forward at 01/01. Similarly, if overpayments had been made, they would have reduced the balance outstanding and so interest would be calculated on that lower amount.

I am guessing here, that in this instance you had been advised in December '91 that to keep the account up to date a payment of £127.07 was required. Unfortunately, it looks as though it was paid AFTER the interest calculation for the next year had been posted. Therefore they had, unusually, to bring forward a credit balance to '92. The exact circumstances may not be as I am guessing, but the principle remains the same.

EDIT: Principle remains the same!

Ok , i'm not sure what is going on here or why there was no payments. But what we do know is what the payments should be.
January £104.43
February £104.43
March £100.49
April £100.49
Total of £ 409.84 not paid. You'd think i'd remember something like that happening but i have no recollection of it. But i do have this letter in the bundle, there is no other documentation around this at all. And what confuses me more is that they come to a different amount?



I've no idea where they got the £204.92 figure from ? But if i add that to the expected April payment of £100.49 then i get an arrear of £305.41. The arrears column now shows this arrear of £305.41- like their letter says. The difference between my calculation of £409.84 and their calculation of £305.41 is £104.43 . So who paid it, where did it come from ? Look back at the 1991 statement and the arrears column shows £104.43 in the positive, not minus. I can only fathom that the arrears column is showing an overpayment ? If so, what happened to the other positive figures in the 1991 statement, does that make sense ?