MSE News: Call for Clydesdale/Yorkshire mortgage gaffe write-offs

Former_MSE_Guy

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

"Consumer Focus has written to Clydesdale and Yorkshire banks urging them to cancel mortgage demands following a glitch ..."

Read the full story:
Call for Clydesdale/Yorkshire mortgage gaffe write-offs

callum9999

Increasing it by £3500 a year is unfair, but claiming back the money is completely fair - they should just do it over a longer period, i.e. over the entire duration of the mortgage or something.

If the situation was reversed and customers were giving the bank too much, it would be unquestionable that the bank didn't give it back straight away. While you can't expect the underpayments to be given back straight away in this case as people obviously have less cash flow than banks, there always seems to be a double standard in cases like this.

danoruk

It's an absolute disgrace that Clydesdale/Yorkshire do not simply write off this debt by default. How dare they even consider adding it to the mortgage and making the customer pay interest on it for the remainder of the term!

It's the one debt that should be relatively transparent in our lives but Clydesdale sure made this the focus of my attention for about 8 months last year as I was affected by this error to the tune of £2500 and this stressed me out no end!

I didn't trust what Clydesdale were telling me as the figures they provided just didn't add up and kept changing after each of my letters proved them wrong. I spent hours if not days literally re-plotting my mortgage over the past 7 years (complicated somewhat by being an offset mortgage) to work out for myself what the actual shortfall was and what my repayments should be and with this ammunition I took my case straight to the FOS.

Whilst the FOS don't seek to get you compensation, they do aim to get the debt written off and your mortgage to a state it should have been had the error not occurred.

My mortgage account and repayment amount are now correct thanks to the FOS and the £2500 has been credited to my mortgage account. I've cancelled my direct debit though and moved to a standing order so I stay in control of my repayments - if you do the same just make sure that you re-calculate your repayment whenever the interest rate changes!

I would highly recommend anyone affected by this mess to do the same and start a case with the FOS - you simply can't trust your bank these days and the FOS will do their best to get the situation sorted for you.

Dan

pintofbitter

I've just received notice from the Ombudsman that the Clydesdale has been instructed to write off the underpayment of approximately £4000 resulting form its error in calculating my repayments.

My understanding is fairly clear. The Clydesdale has is acting in a professional capacity and has made an error. The FOS states that:

“Ordinarily, we will tell the lender to write off the capital shortfall that has built up to the date the mistake was sorted out – and we will not deduct notional past savings”

(The exception to the above approach would be where) “the lender can show that the past savings are still retained by the borrowers as identifiable and readily-realisable assets”

“Some lenders appear to over-estimate the ability of borrowers to spot such mistakes. By their very nature, these are mistakes that have not been spotted by the lender – despite its greater knowledge and resources. Borrowers must not shut their eyes to the obvious. But was the mistake obvious if the lender itself did not spot it?"

“Not unreasonably, borrowers expect lenders to be able to calculate repayment figures correctly. Most borrowers do not have the knowledge or resources to audit lenders’ figures.”

“No doubt lenders will bear this in mind in attempting to settle mortgage underfunding cases directly with borrowers”


(Ombudsman News June 2001 and August 2010)

The Clydesdale was a signatory to this agreement and I find its approach quite disappointing.



I would strongly urge anyone who has not yet approached the Ombudsman over this to do so. Similarly, should there be further errors by lenders in the future then DO NOT simply accept their first or indeed full and final offer without due consideration of using the Ombudsman service.

Richbey

Any advice out there for people in my situation?

I myself discovered an error in my repayments to Clydesdale before the problem hit the news. I was moving house and planned to take my mortgage with me when I realised there was a shortfall in my repayments. We were in a rush to proceed with the mortgage offer so I agreed to them correcting the deficit and accepted £200 as a "good will gesture for the inconvinience" (not compensation!)

Now I realise that I have made it easy for them, my repayments almost doubled and I am unhappy that they concealed the widespread nature of the error. At the time they led me to believe that I was a unique case and I had no option but to pay them the money I owed them. I have complained to the FSO last week an am waiting for a response. What does everyone think?