Northern Rock Together Mortgage in breach of "duty of care"?

Nonshy

Conqueror wrote: »

A lost cause indeed, but interesting debate . Thank you for your contribution Nonshy. The 8% increase was put in place before the debacle of Northern Rock. Could that be construed, in your opinion, as NR viewed the borrower as risky back then but still agreed to lend?

Every borrower is constued a risk imo. Some more than others but no one can predict the future.

The 8% increase would be to cover themselves, if you default on your together mortgage they could then repossess your house and reclaim some of the funds.

If you become a de-linked customer and default then reclaiming funds is a lot harder ... NR have more to lose, hence, the higher interest rate.

So if you are asking for my honest opion I don't think you have a leg to stand on... "duty of care" is a very generalised term and can be interpreted in many ways from a borrower's point of view and a lender's... the end of the day the lender always has the upper hand and for you to prove they were not following their duty of care would a be a near impossible task.

dunstonh

dunstonh, thank you for a very convincing argument. I think the subject at hand revolves around this statement of yours " Being in negative equity is not something that should be avoided at all costs and a failure by a lender". For if it is a veracious statement, then I can see where the lawyer's argument in the referenced article can be flawed.

I'm not a lawyer and law doenst always match common sense.

I think that cases where affordability was dubious to begin with stand a much better chance of success. If they lent you the money when its clear you couldnt afford it then that is bad lending from day one irrespective of economic events.

People that borrowed 125% mortgages in 1993 have made staggering gains on their property values. People that borrowed 125% in 2007 may not have made gains in 2008 but what about in 2017?

If property had a fixed asset value then the argument on due of care could come into play as you know what its worth now and you know what its going to be worth in the future. It doesnt though.

interesting debate

Certainly is. You have done well in how you have approached this as well. Too often we see people come in here thinking they have a right to get their money off, debt cleared or someone else is to blame and be quite aggressive or assume the world owes them a living and the thread goes nowhere as no discussion and debate takes place. By discussing and debating the issues we get a much better quality thread.

Conqueror_2

dunstonh wrote: »

You have done well in how you have approached this as well. Too often we see people come in here thinking they have a right to get their money off, debt cleared or someone else is to blame and be quite aggressive or assume the world owes them a living and the thread goes nowhere as no discussion and debate takes place. By discussing and debating the issues we get a much better quality thread.

Thank you dunstonh. All credit due to you and everyone who took the time to contribute and share their opinions. Thank you all for being good sports and a great source of information. Wishing you all a happy and prosperous New Year! I hope to read more threads of mortgages being paid off, and things getting better despite this recession for you all in 2009.

Ian_Griffiths_Halifax

I think David Greene lost the case as soon as he came out with this statement in regard to the Together Mortgage.

Borrowers that took out mortgages like Northern Rock's 125pc "Together" mortgage could use the argument, he said, as the bank was putting the customer straight into negative equity. Interest only loans for 100pc of the property raised similar questions about the lenders' "duty of care" to customers, he added.

Perhaps he's been taking the advice of an 'Investigative Journalist'!

However, I think it DOES stand for Mortgage Express and Standard Life Bank, who were lending at over 100% as a Mortgage and not as a mortgage + unsecured loan.

If you are looking for a way out of the mortgage you have, then here are a few pointers.

a) Northern Rock stated that any customers coming off a deal would be able to go onto any of their deals available at that time. They have since revoked this, but I can't find anybody who has a copy of this statement in writing from NR.

b) ALLEGEDLY, If your mortgage was arranged through a broker who was part of the Mortgage Times Network, then the mortgage may be unenforceable as, I have been told, that Mortgage Times registered all their brokers with Northern Rock using the Mortgage Times Consumer Credit Licence or FSA Number and each broker should have been registered under their own Licences/Numbers.

c) This won't apply to the OP, but apparently the original Northern Rock Together Mortgages are unenforceable due to illegal/unenforceable loan agreements and/or wrong calculations of APR Rates.

d) I'm told that the Mortgage payments and Unsecured Loan payments should be taken separately, but have always been taken in one payment. If you are facing financial difficulty most people would make sure that their mortgage is paid before anything else, then any Secured Loans. How can you stop the payments of the Unsecured Loan, if the payments are taken in one lump?

On a separate note, somebody mentioned the 8% interest loading if the mortgage is moved away from Northern Rock, but the loan continues. This used to be 3% as far as I can remember.

neverdespairgirl

Conqueror wrote: »

in the legal aspect the burden of "duty of care" lies with the lender. This is more a debate regarding the extent of "duty of care" in individual circumstances.

If the borrower is asseting that the bank had a duty of care, and that it was breached, it is for him to proof. The burden of proof is on him, not the bank.

Anyone foolish enough to take out a 125% mortgage in Nov. 2007.....!

the_league

I have been reading with interest this thread. I took out a 125% interest only mortgage in jan 2007 with NR then in august 2007 took out a further secured loan (offered and took more than asked for so am now in a lot of negative equity. Does anyone think that I could argue that NR had no duty of care when they offered me the secured loan which most likely took me to a 100% if not more on the property, particularly when they offered me 10k more than I asked for. I dont expect anything written off but maybe get a good reduced rate to allow me to have some extra to pay off some of the capital as I am so much in negative equity.

opinions4u

the_league wrote: »

I have been reading with interest this thread. I took out a 125% interest only mortgage in jan 2007 with NR then in august 2007 took out a further secured loan (offered and took more than asked for so am now in a lot of negative equity).

So they told you what the maximum is they would lend. You chose to take it though.

Does anyone think that I could argue that NR had no duty of care when they offered me the secured loan which most likely took me to a 100% if not more on the property

It probably didn't based on valuations at the time. It probably took you to 95% of the estimated value (excluding the 'unsecured' element of your 125% mortgage). If you thought at the time that it would take you over 100%, why did you borrow it?

particularly when they offered me 10k more than I asked for.

Get a grip. I was told I could borrow in excess of £200k last May. I borrowed £50k. My choice. My decision. My responsibility.

I dont expect anything written off but maybe get a good reduced rate to allow me to have some extra to pay off some of the capital as I am so much in negative equity.

So you do expect them to write something off. Some of the interest.

So other borrowers should pay more than you to subsidise the outcome of your decisions?

When it comes to "duty of care" you have a responsibility to yourself. Every individual has a choice as to what the spend, what they borrow and what they save.

You made your choice. Live with it.

dunstonh

Does anyone think that I could argue that NR had no duty of care when they offered me the secured loan which most likely took me to a 100% if not more on the property

The Govt openly encouraged 125% mortgages after the last recession. Its now reversed its opinion because its popular for it to forget the past and go with what people want to hear now.

A 125% mortgage is not a bad thing in itself. There are times where it can be seen to be sensible.

particularly when they offered me 10k more than I asked for.

And did you say no to that?

as I am so much in negative equity.

You knew you were in neg eq from the start. So, why should a short to medium term of more neq eq be an issue. At the end of the day your mortgage will be zero and you will own your home. No different to if you bought a 25%, 80% or 125% mortgage.