IS A MORTGAGE FINISHED ONCE ITS REPAID?????

boxer-jed

Hi, I had a mortgage with Chelsea b.s. I moved house and the old mortgage was repaid and a new mortgage set up.Same company was used(Chelsea building society)but a new account was set up for the new mortgage and the old account was paid off and was ,so I thought, closed. All of this was done by a solicitor.
Three and a half years later I received a letter off the solicitors saying there had been a mistake with the account and we was owed @£1500. Great I thought and phoned Chelsea B.S. to enquire. They informed me that there had been a mistake but we owed them @ £1500.
Unfortunately because this account was closed three and a half years ago we didnt keep any paperwork relating to the redemption of the mortgage.
Where do I stand and who is to blame???
Will I be legally responsible for having to re-pay the money
Any help or advice will be greatly appreciated....Thanks

Reaper

I'm not a lawyer but I suspect you are liable for the money. However it is vital you get a detailed breakdown explaining how they arrive at that figure. If a big chunk of it is interest charged on the original mistake then I'd apeal to the building society to have at least the interest part waived since it was their mistake.

If it does not include interest then at least you can take some small comfort in the thought you have had an interest free loan for over 3 years.

Joe_Bloggs

You have to doubt the figures if it takes them three and a half years to realise the situation. See, as was mentioned before, where the money went and don't let the matter depress your spirit. There are regulatory bodies out there that can look at the facts once they are known.
J_B.

dunstonh

You do not agree to pay it until you see a breakdown of of how that figure came to exist.

So, ask them for a full breakdown of the redemption of the old mortgage showing how much the shortfall was, if any and how, after three years, they are asking you for £1500.

If there was a genuine shortfall in the redemption, then you are liable. However, you shouldnt have to pay any interest due to their error.

MarkyMarkD

The £1500 sounds very much like an early repayment charge/redemption penalty.

Given that you moved and took a new loan with them, it is likely that either this penalty was not due, or they should have allowed you to "port" your existing mortgage product and hence not incur the penalty.

If they should have offered you porting, and failed to, and also failed to point out that a redemption penalty would apply if you chose not to port, I would dispute whether the penalty is in fact due. You made a decision based on the advice they provided.

I think you need to go back to the redemption statement they are now suggesting should have applied, and ask them also for a copy of the one which they provided at the time (although your solicitors would also have one of these). Then compare and contrast.

If it's a redemption penalty as I suspect, ask them why it applies given that you have kept your mortgage with them. Ask for a copy of the original mortgage terms and conditions showing that the penalty applied (and this should have either been signed by you, or sent to your solicitor and you as part of the mortgage offer, to be binding). And then examine the wording of those terms and conditions to see whether the product was portable (as most are) and hence whether they should have pointed out portability as an alternative to paying the fee.

Hope this helps ... please let us know how you get on.

payless

As well as the above comments
- one thing you say

Solicitors initially implied they owe you £1500

Lender implies you owe them £1500

is it that solicitors do in fact have funds that should have been sent to lender- giving you a neutral position