URGENT: Were my parents shafted?

Ape_grrl

OK - I now have my hands on the statements.

History first:
The mortgage was originally taken out with the Middleton BS.
This was then taken over by/merged with the Lancastrian in 1986.
This was taken over by Northern Rock in 1992.

Everything appeared fine with the Middleton, but during the late 80's/early 90's, the interest and charges exceeded the payments, so the amount owed annually was increasing!
After NR took over, everything went better, so it appears that the account was mis-managed during the "Lancastrian" period.

Another point is that the nearest branch to us (Rochdale) is Oldham or Bolton and I don't know whether I've got the strength to do all of this.

Blehch!

robnye

To be honest, I think they were just relieved that the endowment wasn't short!
Would I be able to complain on their behalf (just to take some of the pressure off) or does have to be them directly?

sorry for (possibly being thick here), but you say that the endowment wasnt short..... but you said they only got £600 back, is that £600 in their pocket after their other mortgage was cleared, leaving only the £5000 mortgage?
if the NR £5000 mortgage was interest only, i assume your parents didnt have a second endowment to cover that mortgage.
If that was the case... how where your parents planning to pay off the £5000?

with regards to the mismanagement you could try contacting the FSA.
I would also question why NR didnt ask your parents to increase the payments. or did they, but not enough to reduce the £900+ arrears?

Debt_Free_Chick

Let me see if I've understood correctly.

Your parents took out an interest only mortgage, backed by an L&G endowment. That mortgage is now being paid off, using the endowment, and they will get an extra £600 as well.

In addition, in 1985, they took out a further advance for £5000 - again, interest only but no other "product" to back the amount borrowed (£5000). The amount now needed to clear that further advance is £5965.12 when you (and us all) would only have expected to pay £5000 i.e. the amount of the further advance, as all interest has been paid, as it accrued.

The extra £965.12 seems to arise from charges that were added to account when it was managed by the Lancastrian. Is there any explanation for these charges or any description on the statement? Normally, charges would only be added in this way for late payment or some other "default" on the account. Do they have all the paperwork or just some of it?

I would expect that NR inherited their file from Lancastrian, so NR should be able to explain, but it might take a while if they have to go back more than 10 years - and the information might not be accessible over the telephone. Nevertheless, you should ask for a full explanation.

dunstonh

Everything appeared fine with the Middleton, but during the late 80's/early 90's, the interest and charges exceeded the payments, so the amount owed annually was increasing!

I'm going to guess that it was standing order then rather than direct debit at that time (which would be consistent with the era) and not all the amendments took place. During that time, there were some periods when standing order amendment letters were going out a couple of times a week.

Ape_grrl

Right (deep breath) - here are the facts:

In 1985 my parents took out a £5000 endowment mortgage, on which they were supposed to pay the interest only (and buildings and contents insurance, but that's by-the-by).
From 1985 until 1992, the charges by the company (the Middleton and then the Lancastrian BS's) exceeded the amount my parents paid, leading to an increase in the amount of money they owed. Even as early as 85 they were paying by DD (I've checked) and so the amount should have been adjusted automatically - right?
The endowment policy with L&G will mature at the end of this month, covering the initital £5000, plus giving them £600 extra. OK, so far?
The Northern Rock says that my parents owe them £5900+, the extra £900-odd of which I believe results from the mismanagement in the period mentioned above (less the mortgage release fee stuff - £250).

Clear as mud?

I'm honestly about to go and bash my head against the wall to make the pain go away .....

Thank you, everyone, for the help so far. I suspect that tommorrow will be a day spent with my ear glued to the phone. Oh, and my parent's tumble dryer's drive band has just gone as well. Don't they say things come in threes? :think:

Robert_Sterling_3

Although it is not relevant to the enquiry you have made could you say whether or not your parents got the Northern Rock windfall.

I have often dealt with financial matters for members of my family.
I print off a letter, as if from the family member, asking the financial institution to discuss my relatives financial situation with me.
I get my relative to sign the letter and I post it for them.
I have never had any difficulty when doing this.

Ape_grrl

Robert_Sterling wrote:

Although it is not relevant to the enquiry you have made could you say whether or not your parents got the Northern Rock windfall.

I have often dealt with financial matters for members of my family.
I print off a letter, as if from the family member, asking the financial institution to discuss my relatives financial situation with me.
I get my relative to sign the letter and I post it for them.
I have never had any difficulty when doing this.

Thank you - yes I've already started a letter!

They did get a windfall when NR went "public", but sold the shares "Ages ago" - according to my Dad. They needed the money when they sold them (unemployment and so on) and I'm still sure that the problem is with the BS-as-was, and not my parents.
:sigh:

Robert_Sterling_3

Thanks for the additional info.
It is nice to know that your parents had a bit of good luck along the way.
I will be interested to hear what the Northern Rock has to say.

margaretclare

Hi

Direct debits have been around for a heck of a long time - we were certainly doing them in the late 1980s/early 1990s.

Also, interest rates were very high in that period of time. I took on an interest-only mortgage in September 1990 for £45,000 with the then National & Provincial (which got taken over by Abbey National, now Abbey). I was paying £500 a month at that time in interest. Much later it went down to £250 a month. I think interest rates were about 15% at that time!!!

Aunty Margaret

Robert_Sterling_3

In 1980 the Halifax Building Society rates were as follows

Mortgages up to £20,000 15%
Mortgages more than £20,000 up to £25,000 16%
Mortgages over 25,000 up to £30,000 17%

I took out a £25,000 mortgage.