Horrendous Charges from Alliance and Leicester

claires30

My boyfriend and I are about to buy a house together and so we have both had to sell ours. His previous mortgage was with Alliance and Leicester on a fixed 2-year term. We arranged our new mortgage with the same advisors that he had arranged his previous one with the A&L. Unfortunately, he was being pressurised by his buyers to complete quickly as they had to get out of their house. It turns out that as a result of this early completion he has been charged over £3000 by A&L for early redemption charges when he actually only completed 10 days earlier than the redemption date! I wouldn't have minded them taking another mortgage payment but it turns out that despite paying his mortgage on time every month he has ended up paying more to the A&L than he actually borrowed. He feels very let down by: a) his financial adviser who should have brought it to his attention; b) his solicitor who allegedly would have received a breakdown of figures from the A&L which, if we had subsequently received this, would have prompted us to realise the seriousness of the dates and c) by the A&L who seem to be being incredibly greedy!
We have phoned the A&L who have said that we would receive a letter within 7 days explaining their charges... we are still waiting (a good 10+ working days later).
We're not sure where our best course of action lies. I'm gutted now, with the benefit of hindsight, that we didn't take out another A&L mortgage as the fees would, i'm sure have been waived. Is this not something our financial adviser should have picked up on?
I know that ultimately, the responsibility lies with my b/f to have read the information more closely.. i just feel that we've been let down by other people too.
Any ideas on which option/s we should pursue would be greatly appreciated.

dunstonh

a) his financial adviser who should have brought it to his attention;

If the original plan was to do it after the redemption penalties didnt exist then there is no reason for the adviser to mention them.

b) his solicitor who allegedly would have received a breakdown of figures from the A&L which, if we had subsequently received this, would have prompted us to realise the seriousness of the dates

From personal experience, the solicitors do discuss the terms, including penalties, before allowing you to sign the contracts.

c) by the A&L who seem to be being incredibly greedy!

does seem harsh. Although they are technically and legally correct.

Is this not something our financial adviser should have picked up on?

Not necessarily. Was the early completion something the adviser recommended or pushed for or was it you?

If you had been made aware of the £3000 redemption penalty what would you have done. It would have been too late to keep with A&L and meet the required timescales. So, it would have been a decision to risk losing the house or pay it.

TangentMan

A&L are not being greedy, they are just following through on the contract that your boyfriend signed. They aren't a charity. You mention that he has paid back more than he borrowed - that is why they are in business!

Those early redemption charges would have clearly been stated on the offer when he took out the mortgage - it might be worth checking that the amount you ahve been charged is the amount in the offer. But as horrible as it sounds, A&L are perfectly within their rights to enforce their side of the contract.

I know 10 days feels bad but a contract is a contract and it amounts to 1.25% of the fixed term.

If you are leaving the A&L then i can't really see what is in it for them negotiating since they had to buy the money they lent you and need to recover the earnings your signed up to (2 years). And they have already lost you as a customer.

You could complain to your Financial Advisor since you are correct, he should have known there should also have seen a redemption quote from A&L on which would have been these charges.

claires30

Hi

Thanks for your responses guys. I have done some searching amongst the paperwork to get to the bottom of this and can clarify the following information. I dare say that it may not make a difference, but your thoughts would be appreciated.

So, I have now found out that:

a) A&L don't, as a policy, send customers the redemption statement, it simply goes to the solicitor who requests it;

b) Apparently, it is not my b/f's solicitors' policy to send out the redemption statement to their clients either.

c) We only received the overall breakdown (not a break of redemption figure) of the solicitors fees and payments to the mortgage company on the Monday before completing on the Wednesday.

I really want to draw a line under this, but, having received the mortgage redemption statement from the solicitors (by request) we are talking about a sum of £4000 ... and that's just the blinking redemption charge.. never mind their £295 admin charge! I will of course, be fighting that one and suspect that i'll have rather more luck than i will with the redemption fee!

Your thoughts would, once again, be greatly appreciated.

Cheers

Claire

itsakidsworld

If you have, like you say you have, used the same FA then it is upto them to advise you correct.

I have over the years looked at changing one situation or another and I have always asked my FA what to do. They let me know without fail what and when I can and should change. I don't think I have a lucky FA, just a good one.

Sorry but from what I can read, it appears that the FA is at fault here, nobody else. But it must be pointed out that they have not broken any law just ill-advised you so what you can claim against them is questionable.

dunstonh

If you have, like you say you have, used the same FA then it is upto them to advise you correct.

Sorry but from what I can read, it appears that the FA is at fault here, nobody else.

There is no information in this thread to confirm who, if anyone is liable. We don't know if the mortgage adviser pushed for the early date or not. The mortgage adviser may not have been aware of the redemption penalties. Especially if they were sent to the solicitor.

So until we know who changed the dates on the mortgage commencement, you cant blame anyone.

silvercar

Is your new mortgage with A&L? If so, some lenders will refund the redemption charges if you take out a new mortgage within 6 months of redeeming the old one. Check if this is so, if it is it may be worth you while planning to take your new one with A&L to claw back the charges.

itsakidsworld

Dunstonh,

How could the FA not have been aware of the redemption penalties when it was they who arranged the first mortgage?

dunstonh

How could the FA not have been aware of the redemption penalties when it was they who arranged the first mortgage?

The first post suggests the the mortgage was originally planned to be done after the redemption period. However, pressure from vendors brought that date forward and that is how the redemption penalty occured.

The mortgage adviser would have done all the work initially based on there being no redemption penalty. Bringing the date forward after advice, applications etc have all been done doesn't have to involve the mortgage adviser. At that point, you are just waiting for exchange/completion dates and much of the communication at that stage is between the solicitor and the lenders.

So did the mortgage adviser recommend the date was brought forward?

claires30

Hi Guys

Thanks so much for all the advice. To fill in some gaps, I went to the IFA (the same one Darren, my b/f, used for his previous mortgage. He had actually already received a letter from them stating that his mortgage was up for reconsideration because of the 2 year fixed rate and obviously we were very close to that. So, having received that letter from them, I thought i'd use the same IFA's to organise our new mortgage. I did point out to him at the time that I was Nationwide and Darren was with Alliance & Leicester and that i don't know whether he wanted to bear that in mind when finding us a new mortgage. At this point, i still hadn't clicked on the fact that we were within the 2 year period having not had much to do with Darren's initial mortgage application. Anyway, he came back to us with some products, one of which was the C&G which we decided to take. At no point, and I can say this hand on heart, were completion dates discussed. All he knew was that Darren was selling his house, moving in with me until I sold and we bought together.

I hadn't really thought that he might be at blame for not having warned us about the penalty depending on when Darren completed. I have always been more cross with the solicitor who I feel should have sent us the statement. I have received my Nationwise one from the solicitors i'm using for selling my house... but each to their own i guess.

Like I said in my previous thread, I really want to be able to think 'c'est la vie' and move on... but i just can't quite bring myself to do that yet.

Cheers guys

Claire

claires30

Silvercar.... I thought of that one too and despite having paid out a considerable amount for C&G valuations etc.. thought that it would benefit us to change to A&L. However, A&L weren't interested on 2 counts:

1) Our new mortgage application would be in a different name (mine and b/f's rather than simply his

2) They don't have that 1/3/6 months grace that other BSs do... whjy doesn't that surprise me!??!

Thanks anyway!

Claire