Mortgage arrears / remortgage options

josiejo78

Hi there, I've posted this on another board but its been suggested that I try posting here. Sorry it's long but ANY help or ideas gratefully received:


I wonder if you can help. I’ll try to keep this as brief as I can (but it is quite long and complicated, sorry!) My ex-husband and I have a shared ownership mortgage which was taken out with Preferred Mortgages in 2003. This was transferred to Capstone and then Acenden which is the company that I pay now.The mortgage is now paid solely by me following my divorce from my ex-husband.The mortgage can’t be transferred to my name only because of course, Acenden nolonger provide mortgages.

Bottom line is that if I’m honest, when we bought our flat, myex-husband and I just couldn’t afford the mortgage and the rent on the shared ownership property. We paid the mortgage on time but we often couldn’t afford the rent and the terms of our tenancy agreement allowed for the housing association to apply to the mortgage company to pay the rent arrears.

This meant that we ended up with mortgage arrears. Ironically despite never having not paid our mortgage. This became a vicious circle – we couldn’tpay the rent because we were trying to pay off the mortgage arrears so thehousing association applied to the mortgage company to pay the rent etc etc. We ended up with a suspended possession order issued in approximately 2006 or 2007.My husband and I split up at the end of 2008. He left the property and I remained in it with no financial contribution from him which lead to the vicious circle continuing for a while.

The terms of the suspended possession order state that I am to pay £100 per month towards the mortgage arrears which has been done since the suspended possession order was put in place. I have now, after a lot of hard work,managed to get myself on an even keel where I am able to afford both the rentand the mortgage so that since approximately mid-2009 my rent has not beencharged to the mortgage company.

I noticed recently that the arrears on the mortgage don’t seem to be reducing and I looked through my paperwork only to discover that there is an ‘arrears management fee’ of £70 charged each month during “any month where payment is not made on time or the account is in arrears”. My mortgage arrears currently stand at £6,772.73 with an ‘other charges’ amount of £4,744.66 outstanding. This totals £11,517.39.

I believed that I was paying £1,200 per year in order to reduce themortgage arrears (£100 per month x 12 months) but it would seem that actually I’ve only been paying £360 per year (£30 per month x 12 months) with £840 per yearbeing paid to Acenden.

At this rate, it will take me 32 years to pay off the mortgage arrears…and my mortgage is only due to run for another 15 years! It will also cost me £26,040, if I continue topay £840 per year to Acenden for the next 31 years.

My questions are as follows:

1) I am keen to be able to remove my ex-husband’sname from the mortgage and re-mortgage in my own right, however, with the large amount of mortgage arrears, I think I’m on a hiding to nothing. Is this correct? Does anyone know of a company that may consider a shared ownershipmortgage on this basis? (I suspect a pig is flying past my window). I candemonstrate a very good credit record in the past five years since splitting upfrom my husband. I have a number of credit cards which have been excellentlymaintained, a mobile phone contract for which I have never missed a payment anda excellently maintained catalogue account (set up to demonstrate that I am able to manage my finances appropriately). I have a mainstream bank account(First Direct) with an overdraft facility which is also extremely wellmaintained.

2) My plan for dealing with Acenden originally wasjust to write to them to ask them if they would consider reducing or removingthe arrears management fee but in doing some research into this, I came across articles about reclaiming unfair mortgage fees so I thought I might try this.Has anyone had any success with regard to this? To be honest, I feel a bitguilty about this because Acenden have actually been very helpful in the pastwhen I was going through my divorce and put payment plans in place to help me out, but when I worked out how much I would be paying them and how long itwould take me to pay them back, I feel as though I have to do something because otherwise I’ll be stuck with mortgage arrears until I'm past retirement age!

3) Upon reading various websites, a number of people urge caution in approaching your existing mortgage provider to claim potentially unfair fees for fear that the mortgage company might tell the customer to take their business elsewhere. Does anyone have any advice about this? If the answer to my first question is that I am unlikely to get a mortgage elsewhere I don’t want to end up homeless!

4) Please don’t think that I don’t want to pay what I owe. I got myself into this mess (with more than enough help from my ex-husband) but I also want to get myself out of this mess so any useful advice gratefully received. Sorry that this is soooo long.

kingstreet

I am keen to be able to remove my ex-husband’sname from the mortgage and re-mortgage in my own right

What's the loan to value?

Gary123456790

Hi,

I used to work for a small lender who had a large quantity of customer with arrears. They had an FSA review of their fees and had to reduce many of them.

Where customers complained about fees, especially arrears management fees they were often refunded to save it going to the financial ombudsman as this costs the lender £600 per case even if the lender wins so they want to avoid this.

Lenders are not allowed to make a profit on fees and charges, therefore any charge made must be the actual cost to the company. You can write to them asking what they were doing every month to justify the £70 charge.

The company I worked for also charged £70 when customers went into arrears but if you called and made an arrangement to pay extra each month towards the arrears then this charge was removed because they did not need to chase you or review the account. The £70 was only charged for trying to contact the customer and for the customer service manager to review the account to decide what action to take which were not required if you were paying extra.

It is highly likely that you would get some of these charges refunded and I think it is very unlikely that they would tell you to take your business elsewhere. It is also a very long road to repossession and if you are trying to pay the arrears off it is very unlikely a judge would ever grant a repossession.

If I were you I would write them some strongly worded letters requesting details of what action was carried out each month a charge was made.

Hope that helps.

Gary.

josiejo78

The property is worth approximately £185,000 which would mean my 50% share is worth approximately £92,500. The mortgage (including arrears) has approximately £70,000 outstanding and there is a second charge on the flat that would need to be repaid which has approximately £12,000 outstanding. So I would need to mortgage £82,000 which is *does some quick maths* 88% LTV?

josiejo78

Gary123456790 wrote: »

Hi,

I used to work for a small lender who had a large quantity of customer with arrears. They had an FSA review of their fees and had to reduce many of them.

Where customers complained about fees, especially arrears management fees they were often refunded to save it going to the financial ombudsman as this costs the lender £600 per case even if the lender wins so they want to avoid this.

Lenders are not allowed to make a profit on fees and charges, therefore any charge made must be the actual cost to the company. You can write to them asking what they were doing every month to justify the £70 charge.

The company I worked for also charged £70 when customers went into arrears but if you called and made an arrangement to pay extra each month towards the arrears then this charge was removed because they did not need to chase you or review the account. The £70 was only charged for trying to contact the customer and for the customer service manager to review the account to decide what action to take which were not required if you were paying extra.

It is highly likely that you would get some of these charges refunded and I think it is very unlikely that they would tell you to take your business elsewhere. It is also a very long road to repossession and if you are trying to pay the arrears off it is very unlikely a judge would ever grant a repossession.

If I were you I would write them some strongly worded letters requesting details of what action was carried out each month a charge was made.

Hope that helps.

Gary.

Really helpful Gary, thank you. I shall start thinking about my strongly worded letter!