Mortgage Alert Legal & General Cash Reserve

parsley1

NRAM - Northern Rock (Asset Management) PLC have sent out Letters informing the holders of Legal & General Cash Reserve Mortgages that they will be making some changes to the product "to ensure that it is administered in line with the original product terms and conditions". This appears to entail no longer holding the clients overpayments in a separate cash reserve sub account but merging it into the main mortgage account. What differnce you ask? The difference although not openly explained in the letter is that where hitherto you could drawdown from the cash reserve with no questions asked, the "money will still be available to you, however you will need to request the funds as a borrow back service." The borrow back service I have since discovered is NOT -no questions asked, they will require certain current financial information from you. There reasoning being that they would need to know that in releasing funds to you the monthly payment would increase and they would have to be satisfied that you could make that payment.

The reason that many finacially astute customers contracted into this product was specifically for its long term flexibilty. Being able to drawdown to finance things such as home extensions, replace vehicles etc without the rigmarole of obtaining credit came at the price of higher interest rates than one could have sourced in the market place!

Lets run a scenario - In today's climate you are made redundant and would like to release funds until you find another job - is that authorised if you then have no current income? If no then you default on the monthly payments and repossesion is a possible outcome!

I have lodged a complaint which they will respond to within six weeks. I have to make a decision in three (by 14th October) whether to let them merge my accounts or take my cash reserve elsewhere!

Is this legal? Has the FSA authoried this?

The tel no on the letter is not NRAM's it is another previously related company. I spent 25 minutes holding and then finding out I had the wrong number.

The Authorisation form it not a separate piece of paper but printed on the reverse of the letter - you send it in you lose the letter!

Any comments welcomed.

kingstreet

TBH it doesn't surprise me. NRAM is tasked with getting its book down to nothing as fast as possible. Taking this action will look, on paper, like it's doing better than it is...

No help to you, I'm afraid. Couldn't offer any more advice than to do what you've done.

neil9313

I also have an ex Legal & General BTL now with NRAM, I don't think they can do this.

I have sent you a message parsley1

Thrugelmir

parsley1 wrote: »

Lets run a scenario - In today's climate you are made redundant and would like to release funds until you find another job - is that authorised if you then have no current income? If no then you default on the monthly payments and repossesion is a possible outcome!

Totally irresponsible lending in the example you have given. Allowing individuals to draw down with no income. A basic credit check should not prove onerous for people wishing to borrow for the right reasons.

Thrugelmir

Is this your own circumstances?

neil9313

Thrugelmir I don't think you understand these mortgages, they don't do a credit check as its yr own money that you have overpaid to them. What they are trying to do is actually change the T & C's

Thrugelmir

neil9313 wrote: »

Thrugelmir I don't think you understand these mortgages, they don't do a credit check as its yr own money that you have overpaid to them. What they are trying to do is actually change the T & C's

What was previously the means of accessing the money held in this account?

neil9313

A letter or a phone call, same day credit if paying a chaps fee, or free in 3-5 working days back to the account where your DD was from, no questions asked, min of £250 though.