MSE News: Mortgages hikes after Yorkshire/Clydesdale Bank glitch

mashed_monster

Hi

We've had a letter from the Clydesdale to tell us that they've undercharged us on our Mortgage. In a subsequent telephone call they've said it was a system fault and now they want the money back.

They've increased our Mortgage payment by £107 p/mnth.

I have 2 questions, I appreciate that from now we'll have to pay the increased amount, however I feel that they are in breech of contract and we should be able to change lender without paying a fee - am I right?

Also, since this is not our fault, I don't really see why we should have to pay back the shortfall (they've offered to add 3 years to our mortgage which we don't want to do). Surely since this is their mistake then we shouldn't have to pay it back?

I'm not sure who to complain to/what to do for the best.

We took the mortgage 18 months ago, based on the figures quoted at that time. Now we could be in a situation where we may have to move due to the increase (sadly husband is out of work at the moment).

Any help/pointers would be appreciated.

beecher2

If your husband is out of work at the moment, you will struggle to change lender. Do your income multiples still stack up even after losing his income?

If you're not paying enough to pay off your mortgage then there will be a shortfall which will have to be paid somehow. I've no idea if you've got a case for them paying the £1900 difference accrued so far - hopefully someone else will be able to advise.

Thrugelmir

mashed_monster wrote: »

Hi

We've had a letter from the Clydesdale to tell us that they've undercharged us on our Mortgage. In a subsequent telephone call they've said it was a system fault and now they want the money back.

They've increased our Mortgage payment by £107 p/mnth.

I have 2 questions, I appreciate that from now we'll have to pay the increased amount, however I feel that they are in breech of contract and we should be able to change lender without paying a fee - am I right?

Also, since this is not our fault, I don't really see why we should have to pay back the shortfall (they've offered to add 3 years to our mortgage which we don't want to do). Surely since this is their mistake then we shouldn't have to pay it back?

I'm not sure who to complain to/what to do for the best.

We took the mortgage 18 months ago, based on the figures quoted at that time. Now we could be in a situation where we may have to move due to the increase (sadly husband is out of work at the moment).

Any help/pointers would be appreciated.

When you say undercharged. Are you refering to too little interest being charged or the amount calculated to discharge your mortgage within the term of the mortgage being too low. There is a distinct difference between the 2. As ultimately your side of the contract is to repay the mortgage in full. As such there is no breach of contract on behalf of your lender as it stands.

getmore4less

How obvious was it that they were wrong on the original quote.

What was the deal.

Mortgage amount
Interest rate (if promotianal eg fixed, how long and the followon rate)
Full term
Mortgage payment
Interest only or repayment

alan_money

Hi

Money saving newbie i myself got a letter today stating the very same thing, mortgage has been undercharged by the clydesdale bank Iam very angry i have paid religiously and kept to the deal also the must take a fee for setting up the mortgage and so on every monthly payment for running it . If this is the case then they must be in breach of contract due to negligence of my finances of the mortgage they have left me in terrible spot in just an 18 month period with a bill of £1700 pounds and they want the money now or as soon as or put my repayments up £110 per month the question is,there may well be that there is a shortfall but i did not create it through there bad management they have left me in this position or is this another lets scam the public out of more money seen as i did not get a big enough bonus iam presuming you were on a tracker mortgage like me as the figure you have said is very close to mine i would be interested to know if you stay in the glasgow area.

beecher2

alan_money wrote: »

Hi
an 18 month period with a bill of £1700 pounds and they want the money now or as soon as or put my repayments up £110 per month the question is,.

Are you sure they don't want to do both, ie receive £1700 that you owe up to now, and a further £110/month from now on? Have you been given the option of lengthening the term?

getmore4less

alan_money wrote: »

Hi

Money saving newbie i myself got a letter today stating the very same thing, mortgage has been undercharged by the clydesdale bank Iam very angry i have paid religiously and kept to the deal also the must take a fee for setting up the mortgage and so on every monthly payment for running it . If this is the case then they must be in breach of contract due to negligence of my finances of the mortgage they have left me in terrible spot in just an 18 month period with a bill of £1700 pounds and they want the money now or as soon as or put my repayments up £110 per month the question is,there may well be that there is a shortfall but i did not create it through there bad management they have left me in this position or is this another lets scam the public out of more money seen as i did not get a big enough bonus iam presuming you were on a tracker mortgage like me as the figure you have said is very close to mine i would be interested to know if you stay in the glasgow area.

Same as the other poster can you give the mortgage details.

You both need to work out what has been missed so you can argue a case agaianst the lender.

What was in the key facts
Was it an obvious mistake(did you go through a broker) from the numbrs offered.

I think it is unreasonable to expect you to make up the full shortfall but to expect to be put in a position as if you had paid the correct amount might be expecing too much.

eg. if you had been interest only I would expect the interest you had not being paying to be waived, and the option to move to another lender without penalty.(and similar for repayment but harder to calculate)

OR(which will be harder to prove) if you chose this loan over another one because of the misinformation then to be put in the equivilent situation.

Also If you used a broker mortgage advisor why did they not spot the error?

Senior_Paper_Monitor

Was the original quote (KFI) correct ?

Was the original offer letter correct ?

If not to both then , and only then, do you have any chance of "breech (sic) of contract" approach. If they - or even just the offer - were correct then they have offered and you have accepted the contract.

If they were both correct, then the broker cannot be to blame either (this is all he/she can check - as he/she does not have ongoing access to check your bank statements to check you habve been charged correctly).

If the contract is in place but they have simply undercharged then in would be my (non legally qualified) opinion that the repsonsibility to pay the amount due to date (but not any interest applied due to their failure to collect correctly) remains with you.

Strictly speaking you are responsible for checking your accounts and making allowance for anything you have not paid.

However, FSA Treating Customers Fairly guidelines (in particular items 1 and 5) would seem to indicate that the lender will have a responsibility to ensure that you do not suffer in any way from their error and have every opportunity to pay the outstanding amount in timescales suitable to you without it affecting your overall cost.

I would recommend taking the latter approach rather than 'breach of contract'.

alan_money

Hi thanks for response

Iam going to try and explain this problem a bit better ,

2yrs ago i signed a tracker deal with the clydesdale bank using there own mortgage advisor at that time the deal for a tracker was 1% above the bank of England base rate which at that time the base rate was maybe 3 or 4% after the term i would go straight on to the standard vairiable rate sounds good so far .
Things in the bank sector went a bit wrong and the B . O . E base rate fell to 1/2% quids in great.
Today i recieved a letter from them admitting they had made a mistake, after a brief phone call they said 18 months ago they changed their software and a computer error has landed our mortgage with a shortfall of £1700 pounds and it cant go on .
They gave me 3 options one was to pay the cash asap the other was that they would increase the monthly payment by £110 or increase the term of the mortgage by how long they could not say at this time .
Now the point i would like to make is that the mortgage monthly payment has been the same barring the odd couple of quid when the base rate fell
so as for me noticing any difference was nil.
Also i have put my faith in these people and they have been paid for this they will argue thats what they are doing now by highligting it , but its a bit like closing the door when the horse has bolted.
Iam like most people and dont have that sort of cash i feel, call me paraniod but there is something not quite right about this, i cant work any of the figures out so you sort of have to try and trust them.
I feel they have now left me with a very big problem they have put my mortgage in arrears, i cant go anywhere else they will just add the lot on to the balance, its an auttomated direct debit so the £110 extra will be taken off each month wether i like it or not or in the case of the 3 option they have now extended my mortgage by possibly 3 to 5 years because of ther mishandling, it looks like iam stuffed but i think they are at fault and will fight all the way,this cant be right any help or advice from anyone woud be grateful. Iam a joiner and if i give someone a price for a job thats it i know what someone would say if after the job was done i said to them oh by the way made a software error when pricing you job you owe me £1700 pounds i think i have a pretty good idea what they would say to me.

benbo_2

I am in a similar situation to you - while I think that the Bank has a contractual right to demand the money that we have both underpaid because of their mistake - I also think that their resources are much greater than ours! I protested very strongly to the bank and they offered me £250 compensation - this is not much but it is better than nothing, so make sure you get this!!!!

Secondly if you are not happy with what the bank offers you you can go to the Financial Ombudsman with your complaint. He may find in your favour - or not- but it costs you nothing to do this. Best of Luck!

getmore4less

Don't believe them they got it wrong once they will again.

Work out your mortgage based on the rates and the amounts you were paying.

If you give the full details someone can help.

Need every rate change and monthly payments
so get your statements and rate notifications out.