Mortgage Redemption Fees. Help!

madmish00

We have recently sold our house on 16th September

To try to cut a long story short we had our mortgage with Nationwide which we want to port with additional borrowing onto a new property. The surveyor messed us around for 6 weeks, intially refusing to lend, then asking for a structural engineers report which still wasn't enough and eventually the sale fell through because the bottom of the chain were sick of waiting for us.

We then applied for a mortgage elsewhere with the intention of renting the existing property out. All of this was communicated to Nationwide in May. We completed on the new property on 24th June and informed Nationwide of our change of address.

Our buyer then found a new buyer and we contacted Nationwide for a redemption statement. This did not list any early repayment charge (we were 2mths away from being outside our tie-in period) and as a result of this we agreed to proceed with the sale (having stated that we would have to complete in November if the charge was payable)

We completed on 16th September and I have today received a letter dated 12th October stating that we owe them £2500k ERC before they will redeem the account.

Are they able to do this so long after the event? We have used the completion monies to pay down our new mortgage as we ended up having to borrow more than we would have done had we ported.

They accept it was their mistake not to include the charge on the redemption statement and their explanation for the delay in requesting the money is that is has been 'sat in my intray because I have been off sick'.

Do I have any leg to stand on in getting out of this payment?

Thrugelmir

Mistakes do happen. Geniune reason for not noticing sooner and making contact. Also you were aware of the ERC. So hard to see what your defence is if pursued for the money.

KarenBB

How many redemption statents were issued to you and your solicitor? Did none of them have the ERC on them?

It's looks like the penalty was being waived as the account was being ported and someone didn't untick the box or however it's done when you mortgaged elsewhere.

As Thrugelmir says, you knew there should have been an ERC and it would have been a good idea to have queried the redemtion statment when there wasn't an ERC showing. You could ask Nationwide to waive the charge if it wasn't on any of the statements, no idea whether they will or not. YOu would need to point out that you agreed the date of the sale based on the information they gave you and take it from there. While there's any money outstanding they won't release the charge with the new land registry which will cause problems for the new owners solicitors. It has taken them a while to ask for it but I'd say it's normal for companies to take a couple of weeks to turn anything around. You could take back the money you used to pay down your new mortgage.