RBS Offset Mortgage

cymonguk

I am selling my house, I was provided in December with a mortgage release figure of 147k. However as it is offset they said I would have to phone back on the completion day for a new figure.

My solicitors contacted yesterday and were told the redemption figure was now £176k!

When we looked into it they are trying to lump into the redemption my old loan and overdraft. the loan is outstanding for 27.5k and the overdraft was 1050. These debts are with their debt recovery team.

Speaking to the offset mortgage department in order to pay off my mortgage I simply need to pay them 147k for the mortgage to be paid.

Now the solicitor asked them why this was to be included in the redemption and they were told that the overdraft was on an offset account and my loan was part of the offset accounts?

As far as I am aware no loan other than one that is included in a mortgage increase can be included in RBS offsets, and it would need to be entered into the registry if it was secured on the property as a secure loan (which it is not).

Also although my current account was included in the offset accounts, the loan account was never included otherwise it would appear on the offset statements, and the offset team confirmed that the only accounts on the offset list were my mortgage and current accounts, and the RBS website states you can only add current and savings accounts anyway! The loan was also taken out before I even had an offset mortgage, so it is not even as though they can claim that it was taken after that in line with those T&Cs!

Anybody had similar problems, or know what the issues are here? Is there anyway I can simply pay them the mortgage amount of 147k and that would release it?

The house is only selling at 157.5k so no way they can expect to get the money anyway? Plus there is an existing charge of 9200 which means no money will be coming out anyway.


Thanks in advance

Senior_Paper_Monitor

At some point, somewhere it would appear you have consented (possibly unknowingly as banks rarely point out and explain this clause) to a unilateral charge - this effectively merges all liabilities to the lender and all assets of the borrower (first charge if no other charge and second charge if already secured by another party).

You can challenge it and ask for the document that established the charge, but I suspect they will pull something out of the records and draw your attention to section 6, clause xi, para 3 !!

cymonguk

Apparently RBS have a "One Money Agreement" which they say applies to the Offset mortgages, basically this says that when you sell your house any money you owe, etc from other RBS accounts MUST be paid off whether or not you are in arrears, etc!!

My loan was not taken out as secured loan, but by taking out an offset mortgage it effectively securitised my loan against my house!

I find this incredible, if not amazing, that they can try to take money that has never been secured, or where the account is not included officially in the offset accounts from any "profits" of a sale, I am not sure what happens if you are buying a new property, they may then just transfer the "rights" to your new home.

Any money they cannot secure against the profits of the sale becomes "unsecured" again.

Thrugelmir

cymonguk wrote: »

Apparently RBS have a "One Money Agreement" which they say applies to the Offset mortgages, basically this says that when you sell your house any money you owe, etc from other RBS accounts MUST be paid off whether or not you are in arrears, etc!!

My loan was not taken out as secured loan, but by taking out an offset mortgage it effectively securitised my loan against my house!

I find this incredible, if not amazing, that they can try to take money that has never been secured,

With a loan balance of £27.5k now, your original advance (or facility) would have fallen into the category of being unregulated (above £25k). In simple terms this means you have no protection from consumer law. As you are deemed to be knowledgable enough to understand the risk that you were undertaking.

Quite rightly the bank would have required some form of security should you default.

Would appear that you either didn't read the contract in detail or the person advising you before you entered such an agreement didn't point out the downsides either.

silvercar

I'm guessing they are fully aware that you are having financial difficulties and therefore using the charge for the house to secure all the debts.

If you look at the small print on the mortgage it says something like they reserve the right to use this (mortgage) charge as security for any other debt you hold with the group. My solicitor pointed this out to me when I took out the mortgage and said it was a fairly standard condition.

silvercar

Anybody had similar problems, or know what the issues are here? Is there anyway I can simply pay them the mortgage amount of 147k and that would release it?

The house is only selling at 157.5k so no way they can expect to get the money anyway? Plus there is an existing charge of 9200 which means no money will be coming out anyway.

If you can't reach agreement with them to fund some of the money owed as an unsecured loan and allow the sale, it looks like they can scupper the sale.

If the existing charge is a second charge behind the mortgage, then RBS get all their money first.

cymonguk

With a loan balance of £27.5k now, your original advance (or facility) would have fallen into the category of being unregulated (above £25k). In simple terms this means you have no protection from consumer law. As you are deemed to be knowledgable enough to understand the risk that you were undertaking.

Quite rightly the bank would have required some form of security should you default.

Would appear that you either didn't read the contract in detail or the person advising you before you entered such an agreement didn't point out the downsides either.

The loan was not taken as an advance on the offset, but not sure that is what you were actually getting at. I can understand the bank wanting to gain security and they had the option to do so, by making a charge, etc. I certainly wasn't made aware that this would mean that my existing loan would now be secured against the property by default, and I would probably not have taken such a mortgage.

If you look at the small print on the mortgage it says something like they reserve the right to use this (mortgage) charge as security for any other debt you hold with the group. My solicitor pointed this out to me when I took out the mortgage and said it was a fairly standard condition.

OK well I have to admit I never knew that. I do find it surprising that as soon as you close your mortgage they will use the remaining money to pay off any other debts you have, the lady on the phone said that this is a common call that they receive from customers selling their house, so it is obviously not particularly clear for this particular product. I think the difference here is between reserve the right and automatically doing so. I did look through my original documents and could not see anything about "one money", etc.

If you can't reach agreement with them to fund some of the money owed as an unsecured loan and allow the sale, it looks like they can scupper the sale.

If the existing charge is a second charge behind the mortgage, then RBS get all their money first.

The bank have said I only have to pay them the mortgage off, then I pay the charge, then I pay them any remaining towards this money, the remainder will remain as unsecured which I will owe (which was fine).

Thanks for the replies.

whysitallsocomplicated

Hi
Recently ported my RBS mortgage when buying the new house. When looking at the mortgage deed it did clearly say it was securing all monies owed to RBS against the property and looked like the standard form of mortgage deed they use so expect it was the same as you signed. I have a loan from RBS as well (3 years old) and a balance on a Mint card which is owned by RBS and after reading the deed took it for granted that this would also now be secured against the house if I defaulted on any of it.

cymonguk

Frankly the all monies charge is one of those things I had never heard of, the issue has been magnified in my case as they didn't actually explain the issue very well, and only plucked this out of the air on the day of my sale.

Had they informed me in December that the payment was 176k I could have sorted it there and then, it was then further compounded by the bank giving out incorrect/misleading information over the last three days, it seemed like the left hand did not know what the right hand was saying. One minute I was told everything was fine, 3 hours later it was all off again. Caused major issues in trying to sort stuff.

Well after all that the RBS are being paid out, the second charge is being cancelled and the property will be sold, leaving me with no assets, time to take back control