What a Bunch of BANKERS!

Capri-Paul

Hi Folks,

long time listener, first time caller.

Well, anyway, need some help.

I have applied for some extra borrowing on my house and have signed offer documents to that effect however the bank are holding me to what is tantamount to ransom!

The situation is that I had originally applied for £36k to pay off some existing debts including a personal loan i have with the bank and some home improvements, however the valuation on my house came back lower and therefore the amount I could borrow reduced to £24k.

More offer documents were sent out, signed and returned, very standard docs with no stipulations in writing as to how the money must be utilised.

However now the money has drawn down and as it's a lower amount we have scrapped the plans for home improvement and decided to only pay off loans with higher interest rates. This does not include the bank's own personal loan.

They have since contacted us to say that we have a 'verbal' agreement to pay off their loan. We still have the money to do this but it is not the best course of action financially.

Does anyone know where we stand? Is there such as thing as a legally binding verbal agreement in the banking trade, and if we decide to push the issue what's the worst that could happen? We have not defaulted or been behind on any payments for mortgages/ loans with the bank and have no problem with keeping it this way. The main concern for us is what other 'verbal' agreements might suddenly be enforced in the future.

Any advice would be much appreciated. Thanks.

Incisor

What do they have as evidence of this agreement? Was it part of your pitch to them for getting the loan in the first palce?

maninthestreet

Ask for a copy of this 'verbal agreement' so you can check it!

Capri-Paul

when we went to get the original loan we said it was for debt consolidation and home improvements.

When the girl at the bank called us and said we could not borrow the amount we wanted she said it could now only be used to pay off existing debts, I said fine.

The plan then changed to pay the credit cards etc, the debt with the highest interest rates.

Just as I was about to pay off some, I got a call saying, oh by the way, a "verbal" condition of the loan was so you pay the unsecured personal lending off with us!

I'm just really peeved that they think they can bully us into doing something that is not set out in writing.

The offer documents have even got a section for special circumstance/conditions and that has got nothing written in it!

dunstonh

Did you fully disclose all your debts to them?
Does your application state the loan will be repaid with the mortgage (often on applications it can indicated that a debt will be repaid)?

Capri-Paul

Yeah,

The debts were disclsoed, I do all my banking through them and they had a list of all my DD's and SO's to go through with me.

They also have access to all my statements.

Nothing on the paperwork we signed stipulated how we had to spend the money.

happybroker

the application form will probably have listed your debts and which ones you were going to repay with the money and you will have signed that application, at worst the offer will have been made based on the info you gave them and then you signed the offer.

This then means that they have offered you the money based on how you told them you were going to spend the money I'm afraid.

Capri-Paul

There was nothing on the application form to say what debts we were going to pay off, just to say that it was for Debt Consolidation and Home Improvements.

They have told me that it's not on paper but on their "system" and that it was verbal.

What is to stop them in 3 months by saying, "oh yes, by the way were also imposing this condition on you and you must do this, that and the other"

happybroker

did they actually ask you if you were going to pay it off? If they did and you said yes then there's your answer but I would explain in detail why paying the other debt off is financially beneficial to you.

if you are benefitting financialy then that surely puts them in a safer position too.

talana

What about just paying off this loan they're in a tizzy about (just to shut them up), then shopping around for another loan for the same amount and you'd be back to where you want to be.

Just a thought.

Toughluck

Who is the lender? Did they specify this on the mortgage offer that it was to be repaid? Sounds like they have noted a conversation on their system and are following this up.

Wonder what they would have done if you have spent it on a hot tub and plasma screen