Abbey branch messed up our lump sum payment

familychoice

Thanks again for the replies.

DVardysShadow wrote: »

I am guessing you have a mortgage in the 50,000 region, looking at £128 as a month's payment. If they processed £8,000 as early payment, it looks to me like they did not take the regular payment. Is this the case?

I think so. Our mortgage is just under 20k, and we paid in just under 7k as a lump sum off that total. Their letter says:

"...due to the way the funds were sent to us, this amount was paid as an overpayment to your mortgage not as a capital reduction. This means that the amount has been used to pay your monthly instalments instead of them being collected by direct debit as normal. This means that the amount has not been reduced by your mortgage balance as intended."

"So far £127.27 of the overpayment has been used on monthly payments, leaving £6702. This amount has now been paid to your account as a capital reduction and backdated to 27/4/11......

....If you want to make a capital reduction to the original amount, please send a cheque to us for the sum of £127.27..."

I'm just popping down to the branch now so I'll post what they say later.

ViolaLass

Right, now I see.

They thought you wanted to bank your lump sum and use it to pay the monthly payments (drip feeding it, effectively). Leaving aside that this is a daft thing for them to think, the reason why you now owe them £128 if you want to end up where you were aiming for in the first place, is because they didn't take your usual monthly payment of £128 - they took it from the lump sum. If you want the whole lump sum to be used as an overpayment then you need to pay up.

In other words, you haven't lost out, especially since they've backdated the payment.

familychoice

ViolaLass wrote: »

Right, now I see.

They thought you wanted to bank your lump sum and use it to pay the monthly payments (drip feeding it, effectively). Leaving aside that this is a daft thing for them to think, the reason why you now owe them £128 if you want to end up where you were aiming for in the first place, is because they didn't take your usual monthly payment of £128 - they took it from the lump sum. If you want the whole lump sum to be used as an overpayment then you need to pay up.

In other words, you haven't lost out, especially since they've backdated the payment.

Thanks for the explanation, but I still don't see why I have to pay £128 if it's their mistake.

TrickyDicky101

It hasn't cost you any money - you simply have £128 more cash sat in your bank account (offset by a £128 bigger mortgage balance outsanding) than you otherwise would have had Santander actually taken it that month.

InMyDreams

familychoice wrote: »

Thanks for the explanation, but I still don't see why I have to pay £128 if it's their mistake.

You would have had to pay this whether or not they made a mistake. This was your last mortgage payment that as a result of their mistake you did not pay at the time (because they erroneously took it out of your lump sum). As you didn't want them to do that, you'll have to pay them now instead. Because it was their mistake, they are backdating all the interest so you won't lose out by paying it late, but you still have to pay it.

ViolaLass

Had you noticed that your last mortgage payment wasn't taken?

familychoice

Thanks all, I understand now what you're saying and it's also been confirmed by the branch.

familychoice

I've just had a thought.....if the lump sum had gone in when it should have, the repayment would have been based on the new amount, so instead of £20k, and a repayment of £128 the monthly repayment figure would have been based on the new figure of 12k, and therefore less.

Unless I've missed something it seems that we're being overcharged because of their mistake.

InMyDreams

familychoice wrote: »

I've just had a thought.....if the lump sum had gone in when it should have, the repayment would have been based on the new amount, so instead of £20k, and a repayment of £128 the monthly repayment figure would have been based on the new figure of 12k, and therefore less.

Unless I've missed something it seems that we're being overcharged because of their mistake.

But earlier in the thread you said that your normal monthly payment used to be £150.

In any case, most mortgages calculate interest daily, so if you paid the lump sum the day before (say) your payment was due, the 30 odd days used to calculate you interest would have still been based on the higher figure.

For example, the interest on my mortgage is calculated from the 11th to the 10th of each month. They tell me on the 10th what the interest is that I owe and they don't actually take the direct debit until the 1st of the following month. So in my case, I could put a lump sum in on the 11th of one month and the payment I make the following month is still the same. Even the one after won't fully reflect the lump sum as it's paid so far in arrears, as it were. Could something like this explain why it's higher than you think it should be?

familychoice

InMyDreams wrote: »

But earlier in the thread you said that your normal monthly payment used to be £150.

In any case, most mortgages calculate interest daily, so if you paid the lump sum the day before (say) your payment was due, the 30 odd days used to calculate you interest would have still been based on the higher figure.

For example, the interest on my mortgage is calculated from the 11th to the 10th of each month. They tell me on the 10th what the interest is that I owe and they don't actually take the direct debit until the 1st of the following month. So in my case, I could put a lump sum in on the 11th of one month and the payment I make the following month is still the same. Even the one after won't fully reflect the lump sum as it's paid so far in arrears, as it were. Could something like this explain why it's higher than you think it should be?

Thanks, yes I did say £150 but that was my mistake - I think I started the post generalising the amount then wrote the specific amount after.

Our monthly payments were £128, so unless the lump sum exactly missed the end of that month then we have overpaid and it would have been less after the payment.