MSE News: Mortgages hikes after Yorkshire/Clydesdale Bank glitch

Skyerocket_2

Wolfrune, I'm in the same boat as you. I think at this point we complain to the ombudsman, they seem to be trying to find a reason to deny you a mortgage going forward.

CKW1

I've just come across this thread and am amazed that CB are trying to claw back monies which have not been paid as a result of their error! I work for a mortgage lender and know that in cases where an error has been made we always ensure that the customer is put in the position they would have been had the error not occured and i'm surprised that CB have not taken the same action as I believe this is what the FSA would expect them to do!

My understanding of this matter is that those of you affected are on repayment mortgages and that when the base rate reduced they didn't calculate the repayments correctly. I note that a few of you have quoted that this was an error going back to 2008 but the base rate did continue to reduce in 2009 were the payments not recalculated then? or was there a rate floor which stopped the rate reducing when the base reached a certain level?

When the rate was reducing presumably Clydesdale sent you a letter advising of the new rate and new monthly payment. If the monthly payment they quoted on their letter is the same as the amount they have been collecting by direct debit I do not believe they can request overpayments to make up the shortfall. As a customer you cannot be expected to check their figures, particularly on repayment mortgages where the calculation is more complex than interest only. In my opinion Clydesdale should be adjusting your balances to the level they should be had the correct amount been paid over this period and writing off any interest they've lost as a result. Now that the error has been picked up they are within their rights to increase the monthly payment to what it should have been, providing sufficient notice of an increase has been provided to you under the terms of their direct debit guarantee & mortgage conditions of course!

getmore4less

CKW1 wrote: »

In my opinion Clydesdale should be adjusting your balances to the level they should be had the correct amount been paid over this period and writing off any interest they've lost as a result.

From the info provided so far it seems that the payments were not just short on interest but also capital to repay the loan.

In most cases the results from a simple mortgage calculator are close enough to spot these sorts of big errrors the tiny errors are harder to spot.

In the case of the £130k over 15years
At 0% interest the payment would be £130k/(12*15) this is £722pm.

A payment of £563 should have set alarm bells ringing.

CKW1

getmore4less wrote: »

From the info provided so far it seems that the payments were not just short on interest but also capital to repay the loan.

In most cases the results from a simple mortgage calculator are close enough to spot these sorts of big errrors the tiny errors are harder to spot.

In the case of the £130k over 15years
At 0% interest the payment would be £130k/(12*15) this is £722pm.

Good point, i hadn't looked at any of the calculations in detail! More than a loss of interest for CB then if the FOS rule in the customers' favour!

getmore4less wrote: »

A payment of £563 should have set alarm bells ringing.

Yes and the monthly payment must have reduced quite considerably from what was being paid before! However most people wouldn't even consider questioning whether or not a payment is correct (particularly when it's reducing!). At the time there would have also been a lot in the media about the effect of reductions in the base rate on mortgage repayments and therefore most would have assumed this to be correct. It is not fair for CB to penalise customers for their error.

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"Some 18,000 homeowners who were undercharged will be asked to make up the shortfall, though you have a right to complain ..."

Read the full story:
Mortgages hikes after Yorkshire/Clydesdale Bank glitch

cycloid

I am pleased to find this thread. I received a letter on these lines from CB today. I have requested a breakdown of their calculations, which make little sense from the information in the letter, & will then consider options.

Martin

Dollydebs_2

Just off the phone to another advisor from CB - and after 3 letters from them stating its 'under investigation' she was basically the poor stooge left to call me and prob quite a few others I suspect to 'make me an offer of goodwill' of £250. Immediately I said no thanks I will just take it up with the ombudsman because it costs me nothing.
Its costs the bank I think £500.

I presume that even if I am made another offer by CB which I reject, its then down to the ombudsman and even if they find in CB's favour and uphold their offer, I would still receive their original offer therefore I feel as if I have nothing to lose but everything to gain.

So keep pursuing folks...

opinions4u

Dollydebs wrote: »

I presume that even if I am made another offer by CB which I reject, its then down to the ombudsman and even if they find in CB's favour and uphold their offer, I would still receive their original offer therefore I feel as if I have nothing to lose but everything to gain.

You are not guaranteed to get the £250 if the Ombudsman rules against you.

That said, I would probably do exactly what you are doing.

Personally I think the FSA should be intervening on this one to ensure that all customers affected are compensated en masse without having to resort to the long drawn out processes of the FOS.

mortgagequestions

Hi. Have just received a similar letter from Clydesdale and found this forum, and am also furious. Thanks for helpful comments so far on this forum. My mortgage re-payments are also going to increase by about £300 per month (over £5,000 shortfall in 2 years apparently - but that maths doesn't seem to work to me). It is ridiculous that they can have made this mistake and are expecting customers to make up the shortfall without any explanation.

Have just phoned them and apparently the main reason for the difference is that they made an error in calculations when interest rates dropped back in 2008, and then each time the interest rate has dropped since then the problem has been compounded. I have said that I am very unhappy with this, particulary since the Bank confirmed that we are being asked to pay interest on the capital shortfall, as well as paying back the capital. I'm no expert, but that seems to me to be wrong and I am going to take it up with them further. Even if we are responsible for the capital I can't see that we are responsible for the interest on the capital shortfall. They are going to send a detailed explanation of what happened so I will take it from there. Will post any useful updates!

gp11971

I too have just had a letter from the Clydesdale Bank, and I'm based in the Manchester area. They claim I have paid back £2K less than they indicated on their last statement and they want to increase monthly payments by 25% and/or extend the length of the repayment term. Thanks to the comments above I have drafted a letter requesting a full breakdon of their calculations and asking them to defer any rises in payments until I hae had a chance to consider their response.

With regard to complaints, is it best to exhaust the CB system before going to the FOS, or go straight to the FOS. Any advice welcome.