DMP & Northern Rock (NRAM) Together mortgage

Archie911

I've just set up a DMP with Stepchange which starts May 1st. Does anyone have any experience of entering into a DMP with this type of mortgage & what NRAM's stance is? The unsecured element of the mortgage is approx. £15,000. My total debts are £28,000. Stepchange have contacted my creditors prior to setting up the DMP but I've no idea what to expect next...particurlarly from NRAM. This months mortgage payment is almost due but I'm not sure whether I should just pay the secured part or will they demand the unsecured part too which I don't have?

Sazzie23

Hi Archie,

Sorry I've never heard of this situation in a DMP, but it must have happened before. What did stepchange say?

Regarding any other creditors, it varies between different creditors, some will contact you and say yes, some will contact you and say no, some will not contact you at all but will accept the plan and reduce or freeze interest, you might just find out on a statement which shows reduced interest or agreed repayment, or any combination of the above, or something else !

Whatever they do or say though, SC will advise you to just continue to pay SC the agreed payment and the creditors will just have to let with the program.

Sorry can't help on the NRAM mortgage, but be advised by SC. Feel free to come over to the DMP mutual support thread for friendly non judgemental chat and advice, maybe someone else on there has experienced this issue.

sourcrates

Can you have a DMP on a live mortgage ?
Unsure what you mean about the "secured" and "unsecured" part of the debt ?

Can you provide more details ?

Archie911

The Together mortgage is basically where you borrow 125% of the purchase price...the 25% being a unsecured loan. At this moment in time I am completely up to date with no arrears but as of this month I need to start paying just the mortgage & not the loan. I will call Stepchange today and see what they suggest as they have informed me that they have contacted all my creditors. I just don't know what their reaction was as I've not heard from any of my creditors...as yet!

sourcrates

Archie911 wrote: »

The Together mortgage is basically where you borrow 125% of the purchase price...the 25% being a unsecured loan. At this moment in time I am completely up to date with no arrears but as of this month I need to start paying just the mortgage & not the loan. I will call Stepchange today and see what they suggest as they have informed me that they have contacted all my creditors. I just don't know what their reaction was as I've not heard from any of my creditors...as yet!

Ah, ok then, now I understand !!

Not had any experience of this, so can't really advise you, except to say that's as you are using stepchange as your intermediary, you've given yourself the best chance to get the matter dealt with.

Once lenders know your working with SC they are much more lenient in there attitude towards you.
Good luck with it !!

DorisTrousers

You cannot prefer creditors, or shouldn't, so the unsecured element of the debt shouldn't be paid, you should only pay the mortgage part.

Here is where it gets complicated however. NRAM have been notorious in the past for allocating that payment to the unsecured element, meaning that effectively you fall behind with your mortgage. I haven't dealt with them so much lately so that may have changed, and hopefully it has. Also, even if they allocated any payment to the mortgage and not the unsecured part, then they have been very quick to look to secure that debt against the property via way of charging order.

Best thing to do is to speak to StepChange and take their advice, I am sure they will tell you what to do for the best. Incidentally, how much are you expected to pay towards the DMP? A together debt lasts as long as the mortgage and therefore reducing the payments on it, which is clearly what a DMP does, will extend that debt even further. You may, depending on your own situation, want to consider an IVA as that will both limit the timescale somewhat, and also take away the threat of a charging order.

Archie911

Thanks all.

I've spoken with Stepchange this morning who have advised I sit tight for the moment and simply pay the secured part of mortgage and await any response from NRAM.

phoenixx

Archie911 wrote: »

I've just set up a DMP with Stepchange which starts May 1st. Does anyone have any experience of entering into a DMP with this type of mortgage & what NRAM's stance is? The unsecured element of the mortgage is approx. £15,000. My total debts are £28,000. Stepchange have contacted my creditors prior to setting up the DMP but I've no idea what to expect next...particurlarly from NRAM. This months mortgage payment is almost due but I'm not sure whether I should just pay the secured part or will they demand the unsecured part too which I don't have?

Hi Archie911

NRAM were ok with our DMP in the end but we had to complain to FOS first as NRAM were trying to prioritise the unsecured part of the loan in the same way as the secured. FOS upheld our complaint saying that the unsecured part should be treated like any other creditor. Now the unsecured loan that is part of the together package is paid through the DMP while the secured part of the mortgage is paid separately by us. They have also frozen interest on the £21277 that we owe on the unsecured.

Write to tell them you are in a DMP and ring them to pay the secured part of your mortgage. (Make sure you say - this amount is for the secured only and state the amount. Tell them your unsecured payment will come through the DMP.) They should be fine. We had our issues with them 3 years ago when they were very unhelpful - we made several FOS complaints 2 out of 3 of which were upheld.

They have been fairly quiet since touch wood, only once questioning our payment for pet insurance and travel. SC said the amounts were acceptable and they shut up and went away.

Archie911

Thanks Pheonixx,

I spoke to NRAM this afternoon and paid the secured element of the loan. I informed them that I can no longer pay the unsecured part in full each month & have started a DMP with Stepchange. They were aware of the DMP but still asked me for payment. Not sure what will happen now as this is the first installment I've defaulted on.

Glad to hear things went OK for you in the end...it at least gives me a little hope for the future.

neilneedshelp

Archie911 wrote: »

Thanks Pheonixx,

I spoke to NRAM this afternoon and paid the secured element of the loan. I informed them that I can no longer pay the unsecured part in full each month & have started a DMP with Stepchange. They were aware of the DMP but still asked me for payment. Not sure what will happen now as this is the first installment I've defaulted on.

Glad to hear things went OK for you in the end...it at least gives me a little hope for the future.

I am in the same situation with NRAM, unsecured loan and mortgage. I started to get into financial trouble and when I phoned NRAM as I was getting behind they actually recommended for me to speak to Payplan.When I first started my DMP I cancelled the direct debit and paid over the phone. They where aware of me being in a DMP with Payplan and always accepted my secured payment only with no hassle. They where fair to me. They did however once you had finished paying your secured remind you that you ow £xxxxx on the un secured loan. Thats it thou, no pressure.

phoenixx

You are doing all the right things. Well done for speaking to them and explaining your situation. They asked us for payment repeatedly at the start. We told SC and they kept writing to them to say that we were paying all we could. SC are used to dealing with their ways! Keep calm and don't give them any more than they are allocated. They are a miserable company to deal with but we no longer hold any fear of them. If necessary complain to FOS. Keep us posted.