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

debi15

I phoned last week and have had my account credited with approx 2000. I had made an overpayment of £5000 in November 2007 and asked over the phone if I could borrow back £2500 of this. Was told no not available for borrow back. Searched for my paperwork and found the letter detailing the overpayment and it states "you may borrow back your overpayment at any time" phoned again and was told they had no record of this as it was done in northern rocks time and they don't have any info. I'd thought this may b a good way of getting some cash from the credit on my account but I now have to submit letters with more info. Has anyone made an overpayment in northern rocks time

cot1198

lennonc1 wrote: »

I have taken a few payment holidays over the years, as long as you have paid 9 consecutive months without being late you can apply!

So does taking a payment holiday therefor alter your agreement term etc?

In the fact that your monthly payment changes(the term of the loan does not) to take into account the month you have not paid. Although this is by agreement on both parts, you and the lender.

craaaigo

lennonc1 wrote: »

I have taken a few payment holidays over the years, as long as you have paid 9 consecutive months without being late you can apply!

So does taking a payment holiday therefor alter your agreement term etc?

Interest is still being charged and increases the total amount you owe seeing as you aren't paying it during a payment holiday. Generally your monthly payments will increase after a holiday but I believe in some cases its agreed to extend the term instead.

shredder91

craaaigo wrote: »

Interest is still being charged and increases the total amount you owe seeing as you aren't paying it during a payment holiday. Generally your monthly payments will increase after a holiday but I believe in some cases its agreed to extend the term instead.

just as an example of my mortgage, my wife and i took a 6 month maternity holiday, after 9 or 10 months of having the mortgage, we are on a 35 year term - when the maternity holiday finished, our term date stayed the same but the monthly payment went up from £613 to £650 a month.

Short term benefit of £3678, long term cost £14985 - that is the 1st time i've actually worked that out........yikes!

the redress will probably balance that out...back to square one

drussmonkey

debi15 wrote: »

asked over the phone if I could borrow back £2500 of this. Was told no not available for borrow back. Searched for my paperwork and found the letter detailing the overpayment and it states "you may borrow back your overpayment at any time" phoned again and was told they had no record of this as it was done in northern rocks time and they don't have any info.

Borrow-back is only available on secured elements of the loan, and this has always been the case. It makes sense - you have flexibility against the value of your house, rather than a loan which isn't secured on anything.

What's just occured to me is that by reducing loan terms rather than paying cash, the taxpayer isn't really 'losing' £270m in real terms right now. Rather that NRAM won't be able to collect interest for quite as long, and since that the majority of these loans still have 25 or so years to run (assuming you took it coupled with the mortgage), the 'loss' is being deferred to a point in the distant future.

chips78

Any news on customers who have moved away from NRAM, it would be nice to have some idea of when/if were being looked at.

debi15

drussmonkey wrote: »

Borrow-back is only available on secured elements of the loan, and this has always been the case. It makes sense - you have flexibility against the value of your house, rather than a loan which isn't secured on anything.

What's just occured to me is that by reducing loan terms rather than paying cash, the taxpayer isn't really 'losing' £270m in real terms right now. Rather that NRAM won't be able to collect interest for quite as long, and since that the majority of these loans still have 25 or so years to run (assuming you took it coupled with the mortgage), the 'loss' is being deferred to a point in the distant future.

My mortgage was paid off when the overpayment was made, and the overpayment was made on the unsecured amount, do u think this would still b the case

drussmonkey

That doesn't quite make sense debi15. If the overpayment was against the unsecured part, then it wasn't against your mortgage. Your unsecured loan is linked to your mortgage account, but it isn't your mortgage proper.

If the secured part of your mortgage was already paid off, and the redress then paid off the unsecured part, then there's no possibility of borrow back.

marksta

We got our letter today. Our redress totals £3353.18 which has pretty much taken us out of negative equity!
:beer:

DIY_Dave

chips78 wrote: »

Any news on customers who have moved away from NRAM, it would be nice to have some idea of when/if were being looked at.

I am in the same boat, ex NRAM customer still waiting to hear.

Lets hope that it won't be long!