MSE News: Mortgages hikes after Yorkshire/Clydesdale Bank glitch

Armchair23

Not directly relevant I know, but I've had two problems with Clydesdale in the last six months. Neither of them were mortgage related but both showed very worrying flaws in their ability to manage accounts efficiently. I think a wider investigation of their administration would be a good idea.

getmore4less

People should have all the information to calculate what you should have been paying against what you were paying.

If someone can post their mortgage details I or someone else can have a look.
amount borrowed, rates, term.
Interest rate change dates.
monthly payments(all of them).
details from any statements.

details of what changes they are asking you to make.

ayrshires

I have also just recieved this letter, and im raging that i have never missed a single payment and have now been placed in over two thousand pounds of arrears through no fault of my own effectively putting my home and families security at risk, its total mismanagment of my mortgage account ,now we all get bank charges for when we are at fault and they charge us for even being a pound overdrawn to cover their costs and inconvenience, well surely i am entitled to do the same.I have been with the clydesdale bank for nearly 20 years now and trasferred my mortgage 4 years ago,a decision i now regret and will be moving all my accounts if i dont get the answers and response im looking for,why should i be out of pocket and put through stress for their gross imcompetence. how many other people out there have recieved this letter, im from ayrshire and noticed seems to be west of scotland thats affected.:mad:

getmore4less

I cannot see how pepole can be out of pocket by that much.

What do the numbers say?

If they reduced payments so you were not even covering the interest that should have been obvious.

dave_jay

I am also from the west of Scotland .. Prestwick and I have received the same letter, demanding +50% repayments for the next 19yrs on a mistake they made a year ago. Going to phone them tomorrow and will report back.

getmore4less

dave_jay wrote: »

I am also from the west of Scotland .. Prestwick and I have received the same letter, demanding +50% repayments for the next 19yrs on a mistake they made a year ago. Going to phone them tomorrow and will report back.

This is clearly nonsense for an error that is only one year old on a 20years term.

£100k @ 5% over 20 years £660pm (£417 interest only)

If they got it wrong and you paid nothing and rolled up the interest for 1 year that would add around £5200 to the debt.

£105200 over 19 years is about £716pm so max 10% increase, where they get 50% from I have no idea.

Thats based on NO payments, if you were still paying something then it would be loads less.

Can someone please post some real numbers

They got it wrong once don't assume they got it right fixing the problem.

Wulfrune

After a lengthy and pointless conversation over the telephone with Clydesdale Bank, I sent them this letter:

"Dear K*** Fl****g

Thank you for your date dated 3rd June 2010.

I actually feel that you're going through a process solely to suit Clydesdale Bank needs, not mine.
It wouldn't take a rocket scientist to work out where this is going to go..... You write back to me within a few weeks informing me about "how sorry you are" & "regretfully we're unable to do anything about this situation blah blah blah", so, why don't you just cut the chase scene and send me the letter and I can get on with proceeding to process my complaint through the Financial Ombudsman Service.
You'll forgive me for feeling bitter about this situation, but this is ENTIRELY of your making.... not mine.
Your error could potentially cost me my home, I guess this is the thanks that one gets for being a good customer and never been late with a mortgage payment. And the conversation that I had with your "mortgage advisor" yesterday bordered on being offensive. He insinuated that "I have an extremely good deal" with Clydesdale bank..... It's true, I do have a good deal with Clydesdale, but it was the deal that YOU offered and that I didn't come cap in hand to you for.
It's quite ironic that the so called "mortgage advisor" offered to increase my debt by offering me a 2nd mortgage at a "Higher APR" which as I told Jonathon; would be totally unacceptable. I feel that I came up with a perfectly amicable solution to deal with this present problem, but all the intransigent "mortgage advisor" could think about was squeezing a little more cash out of a customer that Clydesdale bank has screwed up with its accounting error.
Yours Sincerely"

ayrshires

ayrshires wrote: »

I have also just recieved this letter, and im raging that i have never missed a single payment and have now been placed in over two thousand pounds of arrears through no fault of my own effectively putting my home and families security at risk, its total mismanagment of my mortgage account ,now we all get bank charges for when we are at fault and they charge us for even being a pound overdrawn to cover their costs and inconvenience, well surely i am entitled to do the same.I have been with the clydesdale bank for nearly 20 years now and transferred my mortgage 4 years ago,a decision i now regret and will be moving all my accounts if i dont get the answers and response im looking for,why should i be out of pocket and put through stress for their gross imcompetence. how many other people out there have recieved this letter, im from ayrshire and noticed seems to be west of scotland thats affected. I have not recieved the detailed letter i have requested yet im only going on the figure given to me over the phone so dont know when it started ,its a tracker mortgage so im paying one and a half percent on . as soon i as i have recieved more imformation i will post it. thanks

dave_jay

Right I'm just off the phone with the Clydesdale and they have told me that there was a program error in their software which reduced my mortgage repayments by too much in 2008 which if left unaddressed would have meant that at the end of my mortgage I would still have an outstanding balance. I have asked them to send me a full breakdown of where is went wrong and how did they manage to make such a howling messing out of it. They have agreed to send this out within 10 working days.

What the woman also said was that the interest which I should have paid, has been paid but the the repayment value was not. I will argue in due course that this is not the case and that the capital was repaid but the interest was not .. and therefore it is their loss and not mine. The shortfall on my loan is around £1200 which is money that they say wasn't paid off the balance.

I am left with a mortgage of £39,923.51 to be paid over 19yrs and they new payment will be £221.12, I believe this is 2.5% on a repayment (the woman on the phone explained that I was on 1.5%) which anyone who can hold a calculator the right way up can work out. This payment is up from £154.05 which they told me to pay in 2008.

I feel that they have effectively moved their liability from them to me and lied to boot. When I get the paperwork in from them I will post up what they say and will go back to them and then put in a formal complaint.

To everyone else on here who has been caught up in the outrage I suggest you calm down and get all of the facts and figures before going down the complaint route.

getmore4less

OK some numbers but not enough to be totaly accurate but enough to clarify where the increases are probably coming from.


£39,923.51 19 year @ 2.5% £220.15pm(close enough to the £221.12 you have)
(£1200 short looks like that is included in the above)

Asuming it is included your mortgage would have been.

£38723.51 19 @ 2.5% £213.53pm.

So the increase in the mortgage to account for the missing capital is just under £7pm.

Most of the increase is correcting the interest rate which you cannot realy complain about.


Trying to work back to a starting point.

£1200 shortfall built up since 2008, so this could be Jan 08-May 08 or Dec 08-May 08 so between 29-17months ish.

Now there is something very wrong because

£38723.51 19y @ 0% is £170pm so the payment of £154 is less than the capital required to pay off the debt so it is not just a mistake on the interest rate

rate /short fall/months to £1200

0% / £26pm / 46
1.5% / £40 / 30
2.5% £70 / 17

so in range if they charge some interest.

I would want to do the calculations myself since they cannot be trusted to get this right.


The key point is that allthough it look like they are charging you a lot more only a small part of it is due to what ever mistake was made the main part of the rise is to correct the payment you should have been making anyway. So even if you get them to restore you to where you would be if you had been paying the correct amount your payment drops £7.

It also looks like even if the full payment was allocated to capital and ALL the interest waived you woud still have a shortfall.


Personaly I think a fair correction is to assume you were paying the propper amount and correct the interest charged over that period(based on the lowest rate they think they were charging), any capital shortfall should still be paid back interest free over the remaining term of the loan.

It is clear to me they got more than the rate wrong.

What they have really messed up is not comunicating correctly and offering propper details of the correction and a decent payback proposal.
Now they have cost themselves a lot of money having to cominicate with people and will inevitably have to pay some compensation for the trouble.


What you have to remember is that they have been undercharging so you have actualy had the use of this money.