Please help - Bank calculated repayments incorrectly and want to put the payments up

jeanangeo

Hi all,

Please could someone advise me as I'm depsarate and don't know what to do.

I took out a loan with a mortgage with Northern Rock in Nov 2006 (to pay for the deposit, stamp duty, lawyers fees and to pay off an existing loan). If I had known about this site then, I would never have gone with Northern Rock - I would have cleared my debts, saved some money and then got a decent mortgage.

I got a letter from them yesterday saying they had calculated my repayments for the loan incorrectly and they would be going up by a factor of 5 starting 1st February.

I would have NEVER taken out the loan (and subsequnetly would not have bought the house) if I had known the real cost.

I can't believe they made such a mistake or that it took over a year for them to spot it.

I did get statements but did not understand what I was seeing until I got the letter when the fact that my balance had gone up suddenly made sense.

Can anyone help as I just don't know what to do.

Thanks anyone who answers
jeanangeo

MarkyMarkD

Can you please explain why the loan repayments were wrong?

Did they incorrectly set the mortgage and loan terms the same?

Is this a Together mortgage where the mortgage and loan are all part of the same deal?

If you have illustration documents for the mortgage, which clearly say that you will repay the amounts you have actually been repaying, and with the correct term, then you have a very major case for compensation as the original loan was mis-sold.

If your illustration documents show the correct repayment details, and they have just been collecting the wrong amounts, then IMHO you don't have a case for compensation as you owe the amount due - I think this is unlikely, though, from what you've posted.

jeanangeo

Hi MarkyMarkD,

Thanks so much for repsonding.

I am currently looking at a letter from Northern Rock headed "Offer Of Loan". The exact words are as follows:

QUOTE

"Summary of details of your offer are as follows:

Total secured loan amount: £132,770

Total unsecured amount: £30,000

The total monthly payment, including the initial unsecured amount of £6.950.00 that you ahve requested is £791.99."

END QUOTE

And now my stomach has sunk into my feet as I have noticed a descrepancy (highligted in bold)...

jeanangeo

Hi all,

Oh my!!!! - this is worse than I thought - In section 12 on page 10 they get the amount right - the total payments are listed on this page as £923.26.

I am so screwed!

Let this be a lesson to anyone who is witnessing - ALWAYS READ THE WHOLE DOCUMENT - ASSUME NOTHING - DOUBLE CHECK EVERYTHING

I wish I had never bought that house!

Is there anything I can do about this or is this a case of "stupid consumer nails their own coffin shut"?

yours in pain

jeanangeo

MarkyMarkD

I don't think that discrepancy should cause your stomach to sink. It's exactly what I was looking for ... it's stating that the total monthly payment will be £791.99.

You decided to accept their offer of a loan on the basis of a monthly repayment of £791.99, which they actually calculated incorrectly due to somehow (very strangely, to be honest) mixing up two amounts on their offer document which ought to be impossible from a computer system point of view.

Now, before you got the offer document you must have been issued with a key facts illustration by either NR or your mortgage adviser. If that document ALSO contained the same error, you have a case; if it didn't, you don't.

Please let us know what the KFI says.

jeanangeo

Thanks again MarkyMarkD for responding.

The situation is that the summary letter was incorrect but the 10 page actual offer of loan was correct - so as you said I don't have a case.

I am screwed.

Thanks for taking the time out to repsond - it's greatly appreciated.

MarkyMarkD

The reason I mention the KFI is that it is the KFI which should have made you go ahead with a full loan application. If the KFI under-stated the loan costs, and this was reiterated in the loan offer (or at least, the summary letter) then you have clearly been misled.

If the KFI stated the true cost, then why would you have applied for the loan?