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  • FIRST POST
    • Geoff1963
    • By Geoff1963 14th May 17, 11:29 PM
    • 931Posts
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    Geoff1963
    Definition of "Mortgage Arrears"
    • #1
    • 14th May 17, 11:29 PM
    Definition of "Mortgage Arrears" 14th May 17 at 11:29 PM
    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
Page 2
    • dunstonh
    • By dunstonh 15th May 17, 9:45 PM
    • 88,748 Posts
    • 54,076 Thanks
    dunstonh
    1) If anyone else had their home repossessed, on the grounds of "mortgage arrears", by a bank which later returned to them, more than that amount of PPI redress.
    Unlikely. PPI premiums added to loans typically increased the monthly cost of the loan by £15-£30pm. Individually, not enough to force someone into repossession and unlikely to go on long enough for it to be a contributory factor.

    A lof of the PPI redress would come from interest and not be the actual premium. Indeed, many now are getting more back in interest than they are in premium paid.

    There is a provision within the FCA guidelines for consequences to be considered but this is aimed at those who may have gone overdrawn say by £10 in a month when a £20 PPI premium went through. In reality, those that went through their limits tended to go through by far more than that.

    2) If it is official government policy to do that.
    There is no Govt policy.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • Number75
    • By Number75 15th May 17, 10:32 PM
    • 170 Posts
    • 189 Thanks
    Number75
    Do you really not see that the PPI claim and mortgage account are completely separate things?

    Why did you stop paying your mortgage?
    • davidmcn
    • By davidmcn 15th May 17, 10:37 PM
    • 5,592 Posts
    • 5,369 Thanks
    davidmcn
    2) If it is official government policy to do that.
    Originally posted by Geoff1963
    Why would there be an official government policy about a rather obscure set of circumstances? The courts apply the laws, which are those enacted by Parliament (in the most part, many years previously) and/or those created by common law principles. You put the argument to the court, they rejected it. If you think they applied the law wrongly then you could appeal.

    when I asked the Ministry of Justice about (2), they evaded the question, suggesting they would be embarrassed if it were.
    No, it suggests they don't have any relevant policy, and you haven't really made a case for why they ought to create one.
    • silvercar
    • By silvercar 15th May 17, 11:03 PM
    • 35,659 Posts
    • 150,281 Thanks
    silvercar
    If you couldn't afford to pay your mortgage, why didn't the PPI payout? or was there some other reason why you weren't making mortgage payments?
    • Bumbletumbler
    • By Bumbletumbler 16th May 17, 8:01 AM
    • 8 Posts
    • 1 Thanks
    Bumbletumbler
    I can see some sense in what the OP is trying to say. Knowing that there was a PPI claim pending,the bank should have put the repossession on hold till the claim was settled. Its doesnt really make sense repossessing his home for say 5k and then later settling his claim for 10k- net payment in his favour. You can argue that he missed his mortgage payments and so deserved the repossession yes but not when the said bank owed him money which eventually could have been used to clear the arrears.
    Last edited by Bumbletumbler; 18-06-2017 at 8:21 PM.
    • silvercar
    • By silvercar 16th May 17, 9:13 AM
    • 35,659 Posts
    • 150,281 Thanks
    silvercar
    I can see some sense in what the OP is trying to say. Knowing that there was a PPI claim pending,the bank should have put the repossession on hold till the claim was settled. Its doesnt really make sense repossessing his home for say 5k and then later settling his claim for 10k- net payment in his favour. You can argue that he missed his mortgage payments and so derserved the repossession yes but not when the said bank owed him money which eventually could have been used to clear the areas.
    Originally posted by Bumbletumbler
    At the point of repossession, the PPI payments would have been a lot less than the mortgage payments.

    If OP wanted the PPI redress to be used for the mortgage, he could have said so at the time. The reason he didn't (I'm guessing) is that he didn't even know he could reclaim the PPI at that time, it was all fortuitous.
    • TrickyDicky101
    • By TrickyDicky101 16th May 17, 9:21 AM
    • 2,655 Posts
    • 1,717 Thanks
    TrickyDicky101
    At the point of repossession, the PPI payments would have been a lot less than the mortgage payments.

    If OP wanted the PPI redress to be used for the mortgage, he could have said so at the time. The reason he didn't (I'm guessing) is that he didn't even know he could reclaim the PPI at that time, it was all fortuitous.
    Originally posted by silvercar
    I don't believe we have seen a full timeline of the events so it is difficult to conclude that. The OP has not helped himself in failing to set out the circumstances in a clear and coherent fashion.
    • Geoff1963
    • By Geoff1963 17th May 17, 9:39 PM
    • 931 Posts
    • 573 Thanks
    Geoff1963
    Thanks for all your input, here are some more details :

    I hadn't made a Claim for the PPI, because the general Pre-Action Protocol says you must try ADR first, else risk being struck out. I instead used the FOS, but they had been on it about 2 years.

    The "mortgage arrears" at the time of the possession claim were about £10 k. I'd been paying some, but falling behind.
    I told the court that the FOS was busy trying to resolve my PPI complaint ; but the bank argued it was "independent", and the Mortgage Pre-Action Protocol which says an FOS complaint might delay proceedings, says "about the potential possession claim", rather than "about money ( from anywhere ) which would have been enough to pay it".

    After a mix-up, the bank's legal team missed a hearing ; at which point I think I could have asked for default judgement against the bank. Instead I explained the situation to the judge, and he put an Order on the bank to explain the "independence" of the PPI. They never complied, claiming the letter was lost in the post.

    The next hearing had a different judge, who ignored the PPI, and granted possession.
    At a new hearing, I applied for a delay to the eviction, on the grounds that the FOS was accelerating my complaint, and the refund ( although "independent" ) would have been enough. The judge refused, because he'd also been waiting ages for PPI, and said it was unfair on the bank to wait so long to get its money ; even though it would be the bank's PPI refund division, paying the bank's mortgage division, and me getting the remainder.

    I moved out, and my house was sold. The details of the psychological effect belong on a different forum.

    A few months later, the bank said it would pay me £25 k in PPI redress, although it took 6 months to actually do so. A stitch in time, saves nine ; which means a stitch not in time, costs nine. Most of that money went on trying to fix things that had broken.

    So :
    1) If judge A thinks the bank needs to explain the "independence" of the PPI, and judge B doesn't ; which is the correct government policy ? Granting possession means authorising the police to drag the occupant out, using tear gas and firearms if necessary, so it should be clear and published. If it were contained in an Act of Parliament, it would be thoroughly scrutinised.
    2) Why is an FOS complaint a reason for delay, only if it is "about the possession claim", rather than about a sum of money which is sufficient to pay it ?
    3) If a bankrupt person can't keep the PPI, by delaying claiming until after being discharged ( because it would be unfair on the creditors ) ; why is the bank allowed to keep my home, by delaying PPI refund until after gaining possession ? The FCA Handbook section on redress says to put the customer back in the position they would have been in ; suggesting the bank should avoid doing extra damage which is too hard to put right.
    4) The UK government told the United Nations Human Rights Special Rapporteur for Adequate Housing, that a lender seeking possession has to first, "prove to the court that they have exhausted every possible option". My experience is so different, that either the UN is being misled, or someone didn't follow a clear enough set of instructions.
    5) My mortgage contract said "pay to the bank", and if I felt that was unfair, I could challenge it under the Unfair Contract Terms Act 1977. Possession decisions ignore that, and use Civil Procedure Rules Part 55 ; which I expect most mortgage customers have never heard of. It keeps referencing "mortgage arrears" and if the government wants consistent decisions by judges, it should say what that means. If it is happy that evictions will be granted based on a shortfall of money from a digital log in the bank's mainframe ( regardless of any other dealings between the customer and the bank ) ; then why is it so reluctant to tell me ? If the bank refuses to accept my money, would the Defence of Tender Before Claim not work ?
    6) The total PPI refund to January this year, was £26.5 billion, which is about 2 mortgage payments for every household ; so I can't believe I'm the only person to have been evicted for arrears, then refunded more.
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