could a bank error mean anything?

quickstarr

hello money savers, I have a quick question on my mortgage from a very big bank.

A couple years ago I tried to claim for mis-sold mortgage protection but the bank refused to grant it. And as the mortgage is still on I figured hey I might actually need it at some point so did not go to court (touch wood right?).

As I was trying to claim I heard of people that had the whole mortgage wiped out because the bank had defaulted or made errors on the terms of their mortgages making the contract null and void. (anyone with examples of this please get in touch)

Anyway just the other day I got a letter from the bank saying they would credit my mortgage account with a certain amount because for the past three years I had been paying too much interest and more than the terms of my mortgage said I should pay. so apologies, apologies here's is a capital credit to your morgage account.

Now I have worked in banks in the past and know that they do not just pay money out of the blue just like that and if they do, they are hoping to keep me quiet about trying to claim more or what I should really be getting back.

Can anyone advise on how to go about figuring this out and if there could be grounds to sue for violation of mortgage contract and getting a bigger chunk back or wiping out altogether for defaulting on terms of the mortagage?

Any help will be much appreciated.

blueberrypie

quickstarr wrote: »

As I was trying to claim I heard of people that had the whole mortgage wiped out because the bank had defaulted or made errors on the terms of their mortgages making the contract null and void. (anyone with examples of this please get in touch)

Doesn't happen. There were businesses out there trying to convince people they could get their mortgages written off, and lots of people were suckered into paying up-front fees to those businesses, but you can forget actually getting your mortgage written off.

Anyway just the other day I got a letter from the bank saying they would credit my mortgage account with a certain amount because for the past three years I had been paying too much interest and more than the terms of my mortgage said I should pay. so apologies, apologies here's is a capital credit to your morgage account.

Now I have worked in banks in the past and know that they do not just pay money out of the blue just like that and if they do, they are hoping to keep me quiet about trying to claim more or what I should really be getting back.

Can anyone advise on how to go about figuring this out and if there could be grounds to sue for violation of mortgage contract and getting a bigger chunk back or wiping out altogether for defaulting on terms of the mortagage?

It's hardly "out of the blue", and if they're trying to keep you quiet, they've done a really bad job, because it's been all over the news and financial websites. If you'd bothered to look, you'd have found plenty of information on this and other sites - and several threads on this forum about these payments.

Start here for a news story:
http://www.moneysavingexpert.com/news/mortgages/2011/02/halifax-to-repay-500-million-to-300000-mortgage-holders
and here for a lengthy thread discussing it:
https://forums.moneysavingexpert.com/discussion/3066112

quickstarr

thanks for the links, I had totally missed it

Jenniefour

quickstarr wrote: »

As I was trying to claim I heard of people that had the whole mortgage wiped out because the bank had defaulted or made errors on the terms of their mortgages making the contract null and void. (anyone with examples of this please get in touch)

There is no such thing as a mortgage being 'wiped out' - what you have probably heard is the wishful thinking of people who very mistakenly thought thier mortgage would 'disappear' if a bank went down. Not so, the mortgage loan book would be bought by another bank. Mortage contracts 'null and void' - another urban myth, I think.

And the only 'errors' I think lenders made in the good old days of chucking money about was that some very lucky people are now on trackers just above base rate. The lenders must be regretting this as they are now trying to fill all those black holes and a tiny bit of interest on such mortgages doesn't go very far to helping repair their balance sheet.

nomoneytoday

AFAIK you wouldn't be able to sell a house until the charge was cleared.
This would happen once the mortgage is paid off.

magpiecottage

quickstarr wrote: »

I have worked in banks in the past and know that they do not just pay money out of the blue just like that and if they do, they are hoping to keep me quiet about trying to claim more or what I should really be getting back.

They do not appear to have trained you very well, then. They are required to put you back into the position you would have been in but for their error, no more and no less.

By using it to reduce the mortgage, they have assumed that you would have paid the extra and done just that. This means that the balance has gone down each month by the amount of the overpayment. The interest the next month (assuming the rate was the same) would have been lower and the overpayment greater and so on.

The alternative would have been to refund you the money plus interest (at a lower rate than you would have been charged) and compounded it annually. Then they would have deducted Income Tax from it. That would have been to your disadvantage.

If you really want it done that way they could probably arrange it but I can't see why you would.