Help! Advice Required - Halifax have extended our mortgage without our authority

burrjulie

I am really hoping you can help point me in the right direction or give some advice.

My husband & I have just found out that our mortgage provider has extended the term of a further advance on our mortgage by 10 years without our knowledge.

Basically, in February 1995 we took out a mortgage with the then Leeds Building Society. In March 1996, we took out a £4000.00 further advance on the mortgage over a 10 year term, due to finish this year.

Years later the Halifax took over the Leeds & so they became our mortgage supplier. In September 2003, we got another further advance for £15k this one for 10 years from this point.

We contacted the Halifax in February to enquire as to what the new monthly payments on the mortgage would be once the original £4k further advance was paid off. It was then that we were advised that there would be no drop in payments because the whole balance on the mortgage including any further advances had been amalgamated in 2003 with the £15k, which in effect extended the remaining balance of the £4k f.a by another 10 years. This was done without our knowledge.

We have asked the Halifax to provide us with a complete breakdown of our mortgage payments since 1996, showing clearly how much of our monthly payments went towards all further advances & how much towards the mortgage. We made it clear that in particular we wanted to know at September 2003 the balance that remained of the original further advance & what portion of our monthly payments from then until now had gone towards this. I have received a written confirmation that this balance was £1394.83 at September 2003 & that at 31st May 2006 the remaining balance for this original further advance is £1081.63.

This has now been escalated from the branch directly to their customer service department to ultimately now their Customer Relationship Officer within their "Service Recovery Team". We have not received the breakdown that we requested & moreover the we have received what we feel is an unsatisfactory response. I quote from their latest letter, signed by the Customer Relationship Officer:

"Any further advances taken out in addition to your main loan are added together as separate part of the main loan. This meant that when you applied for your further advance of £15,000 in September 2003, there was already an existing further advance balance of £1394.83. As there can only be one loan account for the further advances, the new loan had to be added to the existing one, and only one term could be applied. As the new loan was for 10 years, this meant the entire balance including the balance of the first further advance was calculated over this period. Please accept my apologies if this was not made clear to you at the time of applying for your further advance.

I do note the mortgage product your account is allocated to does not have a repayment charge. This means that you are able to repay any part of your loan with no penalty. Should you wish to repay the balance of your original further advance to avoid any extra interest, you are able to do so at any local branch or by cheque quoting your roll number. I realise this is not the response you were looking for, but trust my reply satisfactorily explains the Halifax's position."

They then included a leaflet entitled "Personal Customer Complaints, Here's what we'll do".

My husband & I are very angry by the Halifax's actions here & feel that they have breached the terms of the contract for the further advance, not to mention that they seem very blasé about all this. We have in essence have a 20 year term for £4k. We feel that by rights we should not have anything left to pay & feel that their actions are wrong & unjust. We cannot afford to make these 'overpayments' as they suggest to pay this balance off.

As a result of their actions we have decided to move our mortgage, but we feel that these issues should still be resolved.

My husband & I would like to write to the Halifax & the Financial Ombudsman, but would like some assistance in how to word these complaints to get some action from them. We wondered whether it was out of turn to expect some sort of compensation here. Ideally we feel that the remaining £1081.00 balance should be written off, as we have been under the impression that this would have been paid off earlier in the year. We understand that technically we do still owe this (through no fault of our own), therefore what would you deem to be relevant if any. Please understand that we are not moneygrabbers but feel that we have been treated unfairly & they should not be allowed to get away this.

We would really appreciate any advice that you could give here.

Yours sincerely,

:mad:

---lee---

Hi burrjulie and welcome to MSE.

I would advise against naming individuals in your post. You can go back and edit your post to remove the name of the Customer Relationship Officer.

I think the gist of your post is:

1. With the Halifax, once you get a further advance on your mortgage, a linked but seperate mortgage account is created.

2. If you get any further advances after this, the advances are lumped together under the same advance account but new terms are applied.

I would have thought that each loan should be treat as an independent account with it's own rate (hopefully all the same) and term. I've only dealt with two building societies and I know they separate their accounts, but obviously the Halifax is different (or they have made an error). Perhaps others with experience of Halifax could comment?

Before being given the advances, you would have had paperwork to sign. Do these agreements not make this clear? It’s also always a good idea to consult a solicitor (but not mandatory for further advances) so that you are advised on all the issues. Bit late for that now though . If the paperwork does not correspond with the arrangements that are in place, you would obviously have a case.

No doubt there would have been a saving if the loans had been kept separate as you wanted. How much would depend on the exact amounts, interest rates and terms of all the loans. It may not be as significant as you think though.

regularsaver1

Basically any further advances have to be over the same term - this is loan D of the mortgage so you if you requested 10 years in 2003 for the £15k then the original would change to it aswell, otherwise you would have to have had the £15k over the 3 years remaining of the original further advance - this should have been explained to you as its not a new thing

further advances can be over different terms to the mortgage (Loan A &B, but there is only ever one loan D - so all further advances must take the same time

This was before regulation

Its just like now - if a customer takes say 5 years further advance, but mortgage has 10 years, the KFI would only ever state one term of 10 years if displaying whole mortgage

i understand that you thought it was paid off, but did it not show the full balance on your statement ?

Key: (only over one mortgage, one balance, same roll number , but different parts)

Loan A - original mortgage
Loan B - any fees attached
Loan D - Further advances
Loan E - only sometimes, other associated fees

not sure why there isnt a loan C, but standard mortgage would only have a Loan A & B