woolwich payback - a lesson learned

niamhsmum

I thought I would sher this with site users. We moved house in March, I arranged to have our existing mortgage 'ported' over to the new house and avoid paying an early redemption fee.

We moved and expected a cheque from our solicitors of £13,000+, we actually received £2,777 less. When I quieried this I was told this was the redemption figure given by the Woolwhich.

In November I decided to contact the Woolwich to confirm if this figure was correct, I was told it wasnt and that they owed us £2,777, at first they tried to say our solicitor must have kept it! it took over 4 weeks and numerous phone calls to get it back. We were then contacted by customer services who were invetigating why it took 4 weeks for them to pay us back, not why they had kept our money. I asked them what would have happened if I hadnt contacted them and was told it would have been 'found' eventually - probably after 20 years!

We received £50 compensation but only after my insistance that they had held onto our money for 9 months.

MarkyMarkD

I think that there is a lesson in there for other people who move house or remortgage, and hence redeem their mortgage.

Make sure that the lender sends you a copy of the redemption statement - or that you get one faxed/posted to you by the solicitor - to avoid this sort of issue arising.

It would have been far easier if the redemption amount had been corrected before redemption, and would have avoided the 9 months' delay in getting the money refunded.

Reaper

We received £50 compensation but only after my insistance that they had held onto our money for 9 months.

I think you should have asked for more. Let's say that £2,777 could have been invested in a cash ISA for 9 months at 5% interest. By my calculations you lost out on £104.14

Walletwatch

This may be a silly question, but what exactly was this shortfall towards? Was it supposed to be part of the advance itself, or was it a fee refund from Woolwich?

MarkyMarkD

Wallet

I expect that the £2,777 was the redemption penalty on the existing loan.

Probably Woolwich quoted the original redemption figure, as if the loan was not being ported, whereas in fact the penalty was due to be refunded on the purchase of the second property with the ported mortgage.

In a dodgy type of way, the redemption statement was correct - as that WAS the amount required to clear the old loan. But they should have made clearer to the solicitor that the £2,777 would be refunded as part of the new loan being taken out - or should have advanced £2,777 more for the new mortgage at their own expense.

alanobrien

I had a similar recent experience with the Nationwide but in the end i sorted it out with them direct before we completed and so avoided the 2.5 k penelty and pain of asking for it back.

In our case the solicitor did not follow the required "procedure"
but having all the costs nailed down on a spreadsheet helped us identify very quickly that something wasn't right with our closing statement.

It is irritating and another reason not to rely totally on those you pay to protect your interest.

MarkyMarkD

Well said.

The problem is that solicitors are not necessarily clued up on arrangements like portability - so double check the figures before it's too late.

Walletwatch

Wallet

I expect that the £2,777 was the redemption penalty on the existing loan.

Probably Woolwich quoted the original redemption figure, as if the loan was not being ported, whereas in fact the penalty was due to be refunded on the purchase of the second property with the ported mortgage.

In a dodgy type of way, the redemption statement was correct - as that WAS the amount required to clear the old loan.  But they should have made clearer to the solicitor that the £2,777 would be refunded as part of the new loan being taken out - or should have advanced £2,777 more for the new mortgage at their own expense.

Thanx Mark, I think I get it now.