Negotiating Reduced Mortgage

jamesd

seeerer, an increase in mortgage interest rate based on a change from residential to BTL mortgage terms. Possibly also some increase for capitalised arrears.

pamstretched

Still working on this
Interesting response. The mortgage company via their solicitors have asked us to write explaining what we think the extra £300 is for?

jamesd

Assuming part of it is a higher interest rate for a mortgage wrongly believed to be for a commercial buy to let business loan one reason would be the higher default rate seen on such loans, that merit an increased interest rate to cover the higher risk, as explained in the FSA Mortgage Market Review document, compared to non-commercial mortgages like the one it actually is.

pamstretched

Thanks just realised there are page two to continue reading posets so sorry for delayed response

JamesD can they add this higher default rate without agreement?

jamesd

There may have been something in the original mortgage agreement and even if not, if they believe that it is a BTL situation they would consider the original mortgage to have been obtained fraudulently and that they are being generous in letting it continue at any rate. It's standard practice to apply a 1% higher interest rate to BTL mortgages when someone with a residential mortgage changes to letting with the prior consent of the lender, which they apparently believe wasn't obtained in tis case.

pamstretched

Paying the required mortgage to keep the account straight however,

The mortgage company- via their solicitors- have confirmed this is not a penalty but a rate change. Due to letting the property without permission if we had asked permission it would be cheaper. Also advised account upto date so legal file closed. Informed we need to sort it out direct with the lender from hereon.

Actions
Responded advising no rental income is being received / the property has never been let and requesting a correction.
Doubt they will be taking any notice so..

Not sure if we should go back to court for a Dismissal of the Suspended order because
1, No arrears and account upto date
2. Original Order Obtained on incorrect monthly payments due

Any suggestions
Recent Mortgage statement still has the original rate

Legal quote very high so trying to do as much as possible on our own first to cut down the bill

jamesd

Now there is no pending legal action it's clear for you to go to the Financial Ombudsman Service with your complaint about them wrongly believing that this is a rental property. You should use the FOS route before considering legal action, it's far cheaper - costs them money, not you.

Let them reply to your current response about this not being rented.

If they don't agree, say you're complaining and ask them to review or provide a final decision notice that mentions your right to take the matter to the Financial Ombudsman Service, which you intend to do. Also write in this letter:

"In the event that you still disagree over the facts of whether this is or isn't a let property, please act according to your treating customers fairly and hardship reduction obligations while the matter is awaiting a FOS decision by switching to the agreed letting rate instead of the punitive rate until that FOS decision is made."

Then go to the FOS. Be sure you include lots of documentation to the mortgage company proving it's been in the family, if possible showing lack of rent payments, so you don't have to add more to the FOS complaint.

pamstretched

Had a reply from the solicitors.
As before - the case and their involvement is now at an end as there are now no arrears.
All others disputes must be taken up direct with the mortgage company. They have passed on all the emails we sent to the lender to deal with direct.
Two weeks later a letter from the mortgage company.
Clearly ignoring all the correspondence and advising we are again in arrears as the payment was due six days ago. The full amount is quoted and requested immediate payment.

I will again send copy emails and ask for a written response.
Also
Do I pay the penalty amount they requested or what I believe should be paid. Concerned full payment may act as an acknowledgement this is the proper rate

pamstretched

ps
I will be putting the complaint together this weekend.
I am presuming they won't back down now the they are getting all this extra money.

Is it worth asking the court to dismiss on the basis of incorrect mortgage amount (they charge some hundreds to attend)

themull1

You should continue to pay the penalty amount until its sorted out, or as you said, you could be evicted.