Warning to people on a DMP with C&G or Lloyds Bank Account

rayday2

Whilst going through ex papers I came accross a leaflet from C&G about becoming Lloyds TSB in October. In the new guidelines they warn that if you are behind on payments then money from accounts can be taken from C&G and Lloyds or vice versa, saving accounts etc.

Below is the full online leaflet

http://www.cheltglos.co.uk/pdfs/LCGP10185_Transition_Mortgage.pdf

Here is just the bit about set-off

Set-off
This is the right of a bank or building society, in certain circumstances, to use
money you have deposited with them (such as in a current or savings account)
against a debt you also have with them (such as a mortgage) that becomes
repayable.
So if you have both a C&G savings account and a C&G mortgage, and you fall
behind with your mortgage payments for example, then money in your savings
account could be used against the mortgage debt. But before 1 October, money
you have deposited in a Lloyds TSB account couldn’t be used.
The transfer explained in this leaflet means that from 1 October this right will
continue to apply between C&G mortgages and C&G savings accounts, but it
could also apply to money deposited with Lloyds TSB, although the precise effect
depends on whether your mortgage starts before or after 1 October:
• If your C&G mortgage starts before 1 October, only money in a C&G savings
account, or in a Lloyds TSB account that you open on or after 1 October, could
be used to repay what you owe on your mortgage. Money from a Lloyds TSB
account that was already open before the transfer could not be used unless
the account’s terms specifically allow for it to be used to repay debts owed to
other Lloyds TSB Group companies.
• If your C&G mortgage starts on or after 1 October, money you have in a Lloyds
TSB account, whenever you opened it, could also be used to repay what you
owe on your C&G mortgage, in addition to money you might have in a C&G
savings account.
• But there is also a reverse position. This is where you could be owed money
by Lloyds TSB on an account you may have with them (such as a refund of a
payment made in error for example) and you might want the money you are
owed to be treated as reducing your C&G mortgage. However, any money
you are owed on Lloyds TSB products which you took out before 1 October
cannot be used to reduce a C&G mortgage that also started before 1 October.

rayday2

Not sure how this will impact anyone wanting to re-mortgage to get a better deal because it now looks that C&G and Lloyds will be the same so if you have no arrears ith C&G but behind on Lloyds who knows if they will from October be considered.