MSE News: Northern Rock pays £270m to 150,000 after gaffe

faz33

Oh we'll. cheque would have been nice. But having my loan reduced is better than nothing.got my letter in November so hopefully we will be told soon.
I have had a loan with northern rock and paid it all off in 2007ish could this be affected. It wasn't part of a morgage and was under £15000?

natalie_1982

fergalator wrote: »

Hello again,

So in my usual internet search for information I've found the latest Government update on finances references the NRAM refund/redress situation. It's most likely that they will have the most upto date information as it's part of the public finances.... Here's a cut and paste of the text....

On 11 December 2011, the Economic Secretary to the Treasury announced that Northern Rock Asset Management (NRAM) would be refunding interest payments to some customers. The refunds are being made because of failure by NRAM to comply with all the requirements for loan documentation under the Consumer Credit Act 2008. The UK Asset Resolution (UKAR – the holding company which manages NRAM) have stated that they will be refunding the interest payments made by affected customers over the period that their documentation was not compliant. They estimate that the total cost of this action will be of the order of £270 million. More information can be found on the UKAR website. When the compensation payments take place they will be recorded, under National Accounts rules, as current transfers to the private sector, which means that they will increase the public sector current budget deficit and the public sector net borrowing. As most of the payments will be used to reduce the loan balances of NRAM customers there will also be a simultaneous reduction in public sector loan assets.

This is confirmed on the UKAR website. So it does seem that balances will be reduced rather then cheques sent out. Also interesting to note that the Office of National Statistics (ONS) can't get a date right in their communications! If you want to find this yourself then simply google NRAM refund and look for the link starting ONS

I think this was explained in the original letter; my query would be that the Together mortgage has an overpayment/borrow back facility thus whatever money is refunded to bring down the outstanding balance - is this recorded as an overpayment and as such is it withdrawable so that I could use it to pay a different outstanding debt off entirely (one that I am struggling with), this would enable me to clean up my credit rating and then give me the opportunity to remortgage and get rid of NRAM altogether!

fergalator

I'm hoping it can be considered as an overpayment as it will allow me to be free of my other obligations sooner and then can focus my payments on getting my NRAM mortgage down and out of negative equity.

Kodagirl

Im an existing NRAM,customer,took my together mortgage out in 2005,i recieved a letter in December,and im waiting patiently to hear any further update,any monies would be gratefully recieved,and even better still,if coming off,my balance,as im on a mission to become mortgage free.

Ive read,people complaining,that they are in negative equity,now after taking out the together mortgage package,so am i,however,i am grateful for the together mortgage,it enabled me to purchase my home,without a deposit,and i bet,alot of people out there,would give their right arm for that opportunity at the minute.

simbamk1

Please find below an email i have sent to my iva company. Basically i had a together mortgage and unsecured loan, usual story sold the flat kept the loan the interest rate changed doubling the payment which i was unaware would happen. I got a mortgage and bought a house that was in need of doing up, tore it apart to renovate then lost my job, northern rock as i was struggling with the payment slapped a charging order on even further into negative equity when i was struggling with payments i was now left with no options could not sell, could not refinance nothing. The only option was to voluntary repossess and move into rented accommodation and join an iva. Had northern rock not placed the order i could have sold and only had their £7.5k loan to deal with, instead i have nearly £50k from the shortfall etc. my mortgage adviser only gave me one option for the mortgage and that was the together product i was young and knew nothing of mortgages and took his advise. Is there anything i can do its so unfair what they have done its ruined us financially, and if you see the email below during the time that we were struggling. Was charged all these extra charges with no knowledge of them.
Hi,


I am writing with reference to my request for the original credit agreements for the loans taken out with gmac and northern rock.

I intend to pursue legal action against northern rock and require this information, i have been advised that they are in breach of their duty of care towards me when originally selling me the mortgage which was one of their together mortgage products which put me in negative equity straight away.

Also i do not seem to have the original signed credit agreement for both that i had requested, i also will be taking gmac or webb resolutions to court as i was originally on an interest only mortgage, so this meant i pay off the interest as it accrues each month and the capital will remain.

From the statements you have sent me there is nearly £5k in additional charges for things like not paying by direct debit, paying by debit card, and £50 per month for being in arrears! This is absurd and from legal advice i have gained so far believe this is illegal also and completely unfair.

There are even fees for home visits that i have been charged when no one had ever visited my home! Also the reason for having to go through the stress of repossession was due to northern rock again for the second time applying a charging order to my property plunging me into negative equity.

Also i believe that the amount of shortfall on the mortgage is not even £24k it is actually closer to £17k and that both companies have broken the law, never have i been informed of these extra charges and the reason for them, i have been charged extra money in a time of crisis for being already in financial trouble at the time and now paying for it for the rest of my life. Also the original northern rock loan was not £9k where has this figure come from, i want answers from them.

I will be withholding payments until the my legal action has been completed and i have all the necessary

craaaigo

Unfortunately for a few posters above I don't believe that any payment would be classed as an 'overpayment', and thus you wouldn't be able to withdraw the money back out of the loan. It will be classed as a correction of a charge that shouldn't have been legally made in the first place.

Similarly there's no way at all that NRAM would refund this money to any customers with a live account in the form of a cheque because its not in their interests to do so.

The only reason that NRAM exist and only purpose that they serve is to get back everyones money for the government as quickly as possible. Hence the fact that they don't offer new mortgages, or further advances and that they have retained a pretty sensible SVR.

I realise that you may have the best of intentions with any refunded money and would like to pay back more crippling debts but if NRAM are going to take such a big financial hit on this (and they undoubtedly are) then they're going to at least make sure that this money pays back debts owed to them, as opposed to other debtors (or even a new car or holiday in some customers cases!)

And I'm still waiting to hear back too... The quoted 8 weeks is a very standard timescale that financial companies are given to deal with when looking at investigations & complaints about their products. Unfortunately we're not actually guaranteed a final response within the 8 weeks and may just receive an update or holding response.... That said, its not in NRAMs interests to let this drag on because its only increasing the amount of interest that will be due to be refunded, so we should hopefully hear something soon.

Hopelessly_Hopeful

craaaigo wrote: »

Unfortunately for a few posters above I don't believe that any payment would be classed as an 'overpayment', and thus you wouldn't be able to withdraw the money back out of the loan. It will be classed as a correction of a charge that shouldn't have been legally made in the first place.

Similarly there's no way at all that NRAM would refund this money to any customers with a live account in the form of a cheque because its not in their interests to do so.

The only reason that NRAM exist and only purpose that they serve is to get back everyones money for the government as quickly as possible. Hence the fact that they don't offer new mortgages, or further advances and that they have retained a pretty sensible SVR.

I realise that you may have the best of intentions with any refunded money and would like to pay back more crippling debts but if NRAM are going to take such a big financial hit on this (and they undoubtedly are) then they're going to at least make sure that this money pays back debts owed to them, as opposed to other debtors (or even a new car or holiday in some customers cases!)

And I'm still waiting to hear back too... The quoted 8 weeks is a very standard timescale that financial companies are given to deal with when looking at investigations & complaints about their products. Unfortunately we're not actually guaranteed a final response within the 8 weeks and may just receive an update or holding response.... That said, its not in NRAMs interests to let this drag on because its only increasing the amount of interest that will be due to be refunded, so we should hopefully hear something soon.

Thank you for a very well balanced post. I agree and believe this strikes the appropriate balance between putting right a legal shortfall, benefitting customers and showing repect to the public purse.

HHx

Bigkev999

also believe the above is very fair and reasonable, we all have to remember that for most of us it was them who brought this to our attention.

if they had not mad the announcement then im sure i would never have know.

at the moment im over paying £250 a month due to missing a month payment last year and least this will allow all of the over payment to get me back on track with my current mortgage but also help the balance of the loan that im going to look at paying off early anyway.

i dont think they will have an answer by the 8 weeks and will prob request another or tell you to go the FOS. we all have to have in mind that if we go to the FOS they prob wont get back to us for 12 weeks anyway

either way what ever we all get back is a BONUS to us all.

downhiller

simbamk1 wrote: »

I will be withholding payments until the my legal action has been completed and i have all the necessary

I would strongly advise that you don't withhold any payments.

It's unclear what the resolution will be and withholding any payments could leave you in a bigger financial hole.

craaaigo

Absolutely agree with downhiller, witholding payments could have disastrous consequences. Please don't do this!