Extended Mortgage term and Buildings Insurance Premiums.

[Guest]

Hi,

[Still Waving]

Hi

My initial thoughts:

I don't know whether you have quoted their first letter verbatim, but its first paragraph sounds like gobbledegook, or AN had some strange practices prior to 1993, and possibly since.

On your own final paragraph - an extra 9 years worth of interest on your reducing balance seems like a good arrangement for AN, but a bad one for you.

Did you keep all your correspondence and bank statements? They should have made it clear to you about the change in arrangements for payment of the insurance premiums, and it should have been reflected in your annual statements. (Were these premiums to cover them, ie your repayments in the case of long term illness or loss of employment? Or was it cover for the property? If it was indeed property insurance, it would seem AN has negligently left you without property cover since 2004.

EDIT: Did they have any explanation for the sudden increase in the insurance premium in 1993, or the variations prior to that?

[Guest]

Thanks

[Guest]

Ok, i've gone over my paperwork and also done some Googling and now have some specific questions. It appears it was some sort of scandal that FOS commented on:

https://web.archive.org/web/20080908...ortgage-terms/

https://www.standard.co.uk/hp/front/...s-6594501.html

The FOS said in 2007 they would be accepting no new complaints after the October (2007) deadline. Also Abbey knew i was unhappy about it, i'd complained at least twice. Abbey did say (in 2007) they would consider new cases after this time. So to be blunt if other people got compensation for it then i would like to be compensated too. What are my options ? Write to Santander who now own the mortgage account, contact FOS and tell them i'm not a "new" case ? Any other ideas ?

[Still Waving]

Hmmm, definitely dodgy practice by AN.

As far as FOS goes, it seems they were closing their file on the case in 2007. I think to get them interested now you would need to go through the entire complaints process with the lender first. Just my opinion.

In their 1997 letter, they were implying that not increasing the monthly payment was your fault, but when the can of worms was opened in 2007 it was "The bank" failing to increase repayments, and not advising customers that they were increasing the mortgage terms.

It seems they did tell you in 1997 how to get back to the original term (by increasing your repayments) but you did not do so.

There is nothing to be lost by writing to the account owner, pointing out your history of complaints, and demanding to be compensated in line with other mortgage customers following the involvement of the FOS. Nothing ventured, and all that. When Santander took over AN they took over their liabilities, as well as their assets.

I don't know whether other members have differing opinions. Anybody?

EDIT: Referring back to your post before last, and your comments regarding the insurance premiums - do you actually have any property insurance cover now? If not it would be wise to get cover.

[Guest]

Ok, i have done some more digging. You're correct , they did give me an option on how to get the term back to 25 yrs but i couldn't afford to do that at the time. But my main gripe is that "i also see from the file..........there have been slight underpayments" , that and a total of about just under £400 worth of insurance premiums seems to have added 9 years on the mortgage term. Anyway i now find that prior to my complaint again in 2002 they had indeed been compensating people and returning the mortgage terms back to original terms. I was never contacted by them, nor given any option of redress.
https://www.thisismoney.co.uk/money/...n-records.html

https://www.thisismoney.co.uk/money/...-National.html

https://www.thisismoney.co.uk/money/...nightmare.html

https://www.thisismoney.co.uk/money/...dy-couple.html

I've decided first port of call is to contact Santander which i've just done through resolver. I expect to get the same treatment the other complainants got. Whether i will is another thing. I'll keep updated if anyone is interested. Not sure where i will go next if Santander just chase me so i suppose i'll do some homework just incase.

[Still Waving]

Hi

I did not intend criticism when I said you did not increase your repayments. It's how Satander might look at it (if they still have a record of that), but it's easy to say "increase your repayments to get back to your original term" but that's easier said than done after it has drifted for a few years, and it doesn't excuse AN's cock-ups.

With all those articles you have dug out, you have some ammunition to go back at Santander with, if they rebuff you initially.

Good luck with your complaint.

[Guest]

Hi ,

[Roger]

OK here is the problem they will have a registered charge on your property!
So irrespective of how you feel it would be unwise NOT TO PAY.

You need to seek professional advice.
@Colin G Quinn

Contact Colin email of phone at colin@joannaconnollysolicitors.co.uk or by telephoning 0330 053 9340. Our initial advice is always free.

[Still Waving]

You certainly seem to have a case for grievance. I can't comment on what would be realistic to expect from them by way of redress. You should probably expect some letter ping-pong before you get their 'Final Response', so I think you need to be patient, however much that grates.

Don't take a course where you are out of your depth, and remember that in the case on non-payment their ultimate sanction is to repossess, although they have to be able to show that all reasonable attempts to resolve the situation have failed. That would be difficult if there is an ongoing formal complaint.

See if Colin Quinn can give some helpful input.

Good luck.

[Guest]

Ok, i:



Also i have used an online calculator to work out what they payments should be/ have been. They're not even close:



Have i got my sums wrong ? If that calculator is correct then it looks like AN where seriously undercharging me ?

[Still Waving]

Hi

First thing to check - is that figure of £118.69, quoted in that letter, correct ie was that your original repayment?

The interest figure for the first year in that calculator seems correct by my own calculations. The way repayments are normally calculated by building societies (I say normally because AN clearly had some odd practices), is that the interest is calculated on the balance outstanding at the start of each year (whenever their year starts). The interest is added to the account and is paid before the principal. In the early years the principal balance is reduced by a very small amount. You'll note in that calculator that the principal element of the monthly repayment is only £6.19.

Usually, if the total repayments made during the year are less than the interest and any insurance debit, then the balance at the end of the year will be higher than at the beginning. Therefore the interest added for the following year will be more than the preceding year (assuming the interest rate is unchanged).

In your case, if you were underpaying each month for several years, then your outstanding balance would have been going up each year, and consequently more interest being added.

[Guest]

Yes that figure of £118.69 was my original repayment. Thats what i'd always paid until they told me any different. I'm beginning to fully grasp what has happened here. It was never enough, but it was their fault. When it has come to light, instead of telling me they have kickstarted the mortgage with a start date of 1st January 1993 and with a term of 370 months they said nothing, hoping i would never realise until many years later. Which is what happened.

[Guest]

Hi again, i done some more digging. My paperwork shows my mortgage has been "re started" on 1st Jan 1993, with a term of 370 months, so 30 years and 10 months. I've used the mortgage calculator and played around with the interest rates from what i can fathom where in place in 1993. A 17K mortgage @ a rate of 5.3% gets me £93 a month, which is in keeping with what they say i was paying in 1998 too. Rate was 1% higher in 98 and they mention i was paying £98 a month. So not bang on, but close enough. I think i can safely establish that my mortgage balance must of been roughly £17,000 in 1993 when it was re started ? Please let me know if i'm going wrong here with my working out.

So if the original mortgage was for £13,300 and in four years its gone up to £17,000 then you'd fully expect to be in trouble with your mortgage provider ? But no, they provided a solution without telling me there was a problem. Thats really very kind of them. I think the enormity of what has happened has started to dawn on me. Is any one else thinking what i'm thinking ?

Bear in mind, i've never had so much as a cross word from them over the years, never been in trouble with them or anything. As far as i've always known my mortgage has ran without issue, well until i found out it had been extended.

[Still Waving]

Hi

Can you clarify where you got the rate of 5.3% in 1993?

According to this link (page 5, final column)-

https://www.bsa.org.uk/BSA/files/5c/...21c25f3cbd.pdf

it would more likely have been around 8%.

Edit: Also, where has that £17k figure come from?