Possible Mortgage Scam!

Martin

I think the Woolwich has developed a great scam and I would be interested in your thoughts.

I have just recently transferred my mortgage to Woolwich from C&G and I have to say I am very disappointed with the service so far.

Firstly, my mortgage completed on the 27/4 and the Woolwich help line (we wont even talk about the language problems!) has informed me that the 1st payment is due 16/5 as that is the date that all Woolwich’s direct debits are processed. On that date Woolwich will collect my capital element for the month and the interest from the 27/4 to the 30th April totalling 1450 (ish) my normal payment is 1387.

There are a number of issues with this, how can they charge me for interest up to the end of the month when I have not incurred it yet. I then asked if they are taking the payment early and charging me 2 weeks in arrears and two in advance, does this reduce the future interest charged. It will sit in my account for two weeks and therefore reduce the capital element and therefore the future interest charges, it would even benefit me by repaying my mortgage early. The answer was no, so where is the interest going on this deposit as interest is calculated daily, surely not to the Woolwich?

Secondly, I was told I can move my payment to the end of the month ie 27th one month after the completion, but I would have to use a standing order as Woolwich are unable to process DD on any other day other than 16th. WHAT! They are part of Barclays bank and They cant process DD’s other than on the 16th. I thinks its just convenient rather than unable?

Thirdly, as I was unhappy with the response I had about Woolwich trying to help me understand this problem. I wanted them to plot the early payments and daily interest impact of the early payment until the end of the Mortgage. But they wanted me to pay £25 for this info! Why? The FSA guide lines state that you should not be charged for Complaint resolution, why does the Woolwich?

This is amazing potentially they are holding a payment for two weeks and still charging me interest daily on the loan and but not reducing it, surely they cant do this. Their help desk could not grasp what I was trying to get across to them and just kept quoting policy (always a good get out!).

Have I missed the point here or are they really taking liberties?

I hope to here from you soon.

Best regards

Stephen
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Replies

  • kingkanokingkano Forumite
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    Is that a mistype and you really mean until 30th May for the interest??
  • spurs_nutspurs_nut Forumite
    329 Posts
    jocham72 wrote: »
    Martin

    I think the Woolwich has developed a great scam and I would be interested in your thoughts.

    I have just recently transferred my mortgage to Woolwich from C&G and I have to say I am very disappointed with the service so far.

    Firstly, my mortgage completed on the 27/4 and the Woolwich help line (we wont even talk about the language problems!) has informed me that the 1st payment is due 16/5 as that is the date that all Woolwich’s direct debits are processed. On that date Woolwich will collect my capital element for the month and the interest from the 27/4 to the 30th April totalling 1450 (ish) my normal payment is 1387.

    There are a number of issues with this, how can they charge me for interest up to the end of the month when I have not incurred it yet. I then asked if they are taking the payment early and charging me 2 weeks in arrears and two in advance, does this reduce the future interest charged. It will sit in my account for two weeks and therefore reduce the capital element and therefore the future interest charges, it would even benefit me by repaying my mortgage early. The answer was no, so where is the interest going on this deposit as interest is calculated daily, surely not to the Woolwich?

    Secondly, I was told I can move my payment to the end of the month ie 27th one month after the completion, but I would have to use a standing order as Woolwich are unable to process DD on any other day other than 16th. WHAT! They are part of Barclays bank and They cant process DD’s other than on the 16th. I thinks its just convenient rather than unable?

    Thirdly, as I was unhappy with the response I had about Woolwich trying to help me understand this problem. I wanted them to plot the early payments and daily interest impact of the early payment until the end of the Mortgage. But they wanted me to pay £25 for this info! Why? The FSA guide lines state that you should not be charged for Complaint resolution, why does the Woolwich?

    This is amazing potentially they are holding a payment for two weeks and still charging me interest daily on the loan and but not reducing it, surely they cant do this. Their help desk could not grasp what I was trying to get across to them and just kept quoting policy (always a good get out!).

    Have I missed the point here or are they really taking liberties?

    I hope to here from you soon.

    Best regards

    Stephen

    You have incurred interest form the 27/04 as that is the day the mortgage completed and fund we're released so that is right.

    It is also correct about the standing order as other companies use this practise and not just barclays

    as for the third point, I'm completely lost as to what you mean. Please remember you hardly pay any capital in the beginning as most of the payment is interest so the amount you pay off the loan is minimal.
  • Sorry - yes 30th May.
  • You have incurred interest form the 27/04 as that is the day the mortgage completed and fund we're released so that is right. Yes Thats right

    It is also correct about the standing order as other companies use this practise and not just barclays

    as for the third point, I'm completely lost as to what you mean. Please remember you hardly pay any capital in the beginning as most of the payment is interest so the amount you pay off the loan is minimal.

    I agree about the capital but the advance payment with both interest and capital (albeit small) is sat on my account early than expected when they work out the monthly repayment. Its the same as if I pay a one off payment it would shorten the loan. If I am paying 2 weeks early every month for 15 years the 2 weeks cash in their account adds up to a tidy sum and none to benefit me. I would expect to make a payment of interest, as with any loan, after the 1st month. Not mid way through.
  • spurs_nutspurs_nut Forumite
    329 Posts
    jocham72 wrote: »
    You have incurred interest form the 27/04 as that is the day the mortgage completed and fund we're released so that is right. Yes Thats right

    It is also correct about the standing order as other companies use this practise and not just barclays

    as for the third point, I'm completely lost as to what you mean. Please remember you hardly pay any capital in the beginning as most of the payment is interest so the amount you pay off the loan is minimal.

    I agree about the capital but the advance payment with both interest and capital (albeit small) is sat on my account early than expected when they work out the monthly repayment. Its the same as if I pay a one off payment it would shorten the loan. If I am paying 2 weeks early every month for 15 years the 2 weeks cash in their account adds up to a tidy sum and none to benefit me. I would expect to make a payment of interest, as with any loan, after the 1st month. Not mid way through.

    I see where you coming from now but can't comment as i don't know. Doesn't sound fair to me. Hopefully one of the IFA's will be along to help you out.
  • dunstonhdunstonh Forumite
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    But they wanted me to pay £25 for this info! Why?

    You are asking them to do work which is non-standard. £25 sounds like a fair charge. If I ask someone in any profession to do more work, then I would expect a charge.
    The FSA guide lines state that you should not be charged for Complaint resolution, why does the Woolwich?

    What you ask isnt a complaint. Its an extra service.

    The other bit I am not sure what you are upset about. Most mortgages have you paying in advance.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Quote:
    But they wanted me to pay £25 for this info! Why?

    You are asking them to do work which is non-standard. £25 sounds like a fair charge. If I ask someone in any profession to do more work, then I would expect a charge.

    I have complained to them and asked them to substatiate their charge. This can be done and already as part of the calculation of my monthly charge.


    Quote:
    The FSA guide lines state that you should not be charged for Complaint resolution, why does the Woolwich?

    What you ask isnt a complaint. Its an extra service.

    The other bit I am not sure what you are upset about. Most mortgages have you paying in advance

    No they dont or if they do I have never come across one. Interest is calculated on a daily basis - how can you pay in advance when the interest has not yet been incured. See my comment on additional payments. Who benefits then from the lower interest charge?
  • I agree with Dunston.

    You do pay in advance on your mortgage, which is why your first payment is usually higher, and if you miss a payment, but still pay within the month then it is not classed as a late payment.

    Andy.
  • I thought the 1st payment was higher as it was usualy from the point of completion to the end of the following month or am I again missing the point!

    I think I must be missing the point - if you take a loan out (thats what a mortgage is) the 1st payment is one month later, why is a mortgage payment different?
  • artlawartlaw Forumite
    34 Posts
    Hi, Can anyone offer any advice? I am planning to repay my mortgage off a year before my discounted deal ends, thus incurring a 6 per cent redemption penalty (approx. £8000). I know I agreed to this when I accepted the t&c'c, but to be honest I didn't expect to be moving a year before it ended. Is there any way whatsoever around this huge fee?

    Any advice would be very appreciated.
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