Definition of "Mortgage Arrears"

Geoff1963 · 14 May 2017 at 11:29PM

Does anybody know the official definition of "mortgage arrears" ? I don't mean "How much money ?", or "How many months ?", but more basically, is it :
a) The lender doesn't have enough of the customer's money ; or
b) The lender might well have enough of the customer's money, but they have managed to keep it out of the mortgage account.
Possession decisions are based on Civil Procedure Rules Part 55, which uses the term ; but I can't find anyone in the Government who will tell me what it means.
Option (b) would seem : seriously unfair, a change of the contract I signed, and a Human Rights violation. Does anyone else have experience of a lender claiming it, and a judge accepting it ?
Thanks

glosoli · 15 May 2017 at 12:12AM

I would imagine it's when the customer falls behind their payment schedule, and solutions such as funding it from an overpayment pot have been exhausted. As far as I am aware if you hold funds in say a current account with the same lender then they can effectively begin debiting the repayments from that.

I am not sure how human rights enter the equation. Whats the situation?

enthusiasticsaver · 15 May 2017 at 12:30AM

Mortgage arrears are missed mortgage payments. If you are saying the lender misapplied the payments they are unlikely to take someone to court for repossession. Usually the account is at least 3 months in arrears before legal action started.

Geoff1963 · 15 May 2017 at 12:54AM

I was in the middle of PPI complaint with the FOS.
The lender said in court, effectively, "We may well owe the customer far more than he owes us, but we have managed to keep his money out of the mortgage account, so can we have his home ?"
The judge said, effectively, "Sure. If it isn't in the mortgage account, that's all that matters.
Now they have paid up, it means they had enough of my money all along, and since my contract said "Pay to the bank", rather than "Pay into the mortgage account of the bank", the government evicted me on a condition that it created. The Ministry of Justice, who write the rules, can't tell me if that is the proper outcome.

Geoff1963 · 15 May 2017 at 1:01AM

The lender had made me an offer for PPI redress, which I thought was too small. They threatened repossession, to blackmail me into accepting it ; and when I held out for an FOS decision, they claimed possession, and got my home. Years later, I've had back much more than the mortgage arrears.
I say that if they owed me for PPI, they had my money in time, and it doesn't matter what they called it. If that isn't true, then if I get a tax refund and call it a donation to my holiday fund, HMRC will have to pay me again, repeatedly. The government web-site on bankruptcy and PPI says the the eventual recipient was always the owner of the money.

GarthThomas · 15 May 2017 at 6:09AM

They did not "owe" you PPI until a judgement was made. If, while you were making this argument, you were in arrears then yes, they are able to take your house. Don't fall behind in your payments on your. Mortgage, it is a priority debt.

If I have a savings account with a bank, but fail to pay my mortgage, the my hose can be repossessed. It's the same here.

Geoff1963 · 15 May 2017 at 9:07AM

That's what I first thought, but search gov.uk for "Bankruptcy" and "PPI". It says that if a bankrupt person gets PPI redress, it goes instead to their creditors ; because the person owned that money throughout the time the PPI seller had it.
If you gave money to a taxi-driver, would you be expected to be convicted for not paying, if he could show a pocket in his jacket, which your money hadn't reached ?
A bank can easily prevent your money moving within its organisation, so if that is the rule, then no-one has Security of Tenure ( = Human Rights ).

Paully232000 · 15 May 2017 at 1:11PM

Surely you dont think that you are not in mortgage arears, when you are behind in your mortgage payments, even if you may, sometime in the future, possibly be owed money by the same organisation that holds your mortgage account.

David_White · 15 May 2017 at 2:44PM

Are you essentially saying that you shouldn't have been penalised for not paying your mortgage because you had a potential PPI refund on the horizon from the mortgage lender?

Geoff1963 · 15 May 2017 at 3:20PM

I'm saying that if government rules would take PPI redress off a bankrupt person, because they are considered to have owned the money ( even though it was in the PPI-sellers possession ) between paying the PPI, and getting it back ; then I should not be considered to be in mortgage arrears, simply because the bank for a time thought ( or said it thought ) it owned the money.
HMRC don't want income tax on the whole of the redress, only the 8 % compensatory simple interest ; because they believe you are getting back, what was always yours.

Let's say you take a 3 month holiday, leaving enough money in your current account for the mortgage payment, and a Direct Debit to transfer the money into the mortgage account. As your flight is called, the bank takes all of the money out of your current account, and stops making mortgage payments. Two months later, a court grants them possession of your home. When you get back off holiday, the bank regrets its mistake, and gives you the money it took out of your current account ; but you get a bill for their court fees, a demand for the shortfall on the sale, and a CCJ.

Let's say you are owed a tax refund, and pay the cheque into your holiday deposit account. Would HMRC agree to pay you again, if you could show the money wasn't in your current account ?

A mortgage account is a virtual place in the bank's financial system, to which no customer has access. If it can create "mortgage arrears" by moving, or not moving, money that a customer has given it, within its organisation ; then they can do that to anyone, at any time, and no-one has Security of Tenure. I've asked the bank, and the Ministry of Justice, if that is true ; but neither will answer me. If anyone else can get an answer, I'd appreciate it.

mrginge · 15 May 2017 at 3:30PM

The NHS is just about back up and running. I suggest you get yourself booked in sharpish.

Definition of "Mortgage Arrears"

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