Unfair mortgage fee's ??

yay

Hi,

The worst financial decision I ever made was taking out a consolidation loan to pay off cards etc around 2005 secured on house (I know, I know) ! The lender refers to the loan as a mortgage. (£18,000)

I think the loan was with GE money and then was sold recently to Elderbridge.

In 2012 I missed 1 payment and fell 1 month into arrears. Payments after the missed month were kept up to date but the account was a month behind for approx 24 months maybe. I have no one else to blame for the situation, I should have paid it off or agreed to pay it off over a few months but I just left it. I eventually brought it up to date early 2015 I think and thought no more about it.

I have recently received a statement from Elderbridge which shows a number of things. Firstly a default charge of £40 each month while in payment arrears, a further default fee which varies each month but generally about £20, interest on arrears of approx £5.

Even after the missed payment was cleared, they are still viewing my account as being in arrears (due to the fees) and have been charging a default fee of about £20 a month plus interest even though the loan payments are up to date.

I have only just sat down and spent the time going through the statement to work out what has been happening but in some years, even after paying the monthly payment, the amount outstanding is either the same or going up ! (due to the charges).

I have roughly worked out that if I do nothing, I will clear the orig loan on the agreed year/day but will then have a further balance of fees of over £5,000 to pay. Surely this would be deemed as unfair?

I have so far paid approx £24,000 in monthly payments and at worst been 1 month behind.

The statement states :

Arrears due to missed payments £0 Payments up to date.
Arrears related interest and charges £2,846
Total outstanding £14,221

I have not yet contacted Elderbridge but am thinking that a challenge on unfair charges is possible?

Any ideas of help appreciated.

dunstonh

I have roughly worked out that if I do nothing, I will clear the orig loan on the agreed year/day but will then have a further balance of fees of over £5,000 to pay. Surely this would be deemed as unfair?

Not necessarily. There has been some views by the FCA on arrears charges and one key thing is that they lender has to state what the charge is for and they have to actually do what the charge is for. Some lenders were charging it and not doing the work they said they were for the money.

Where do you get £5000 from as the statement says £2846?

I have not yet contacted Elderbridge but am thinking that a challenge on unfair charges is possible?

You may want to avoid the wording "unfair" but focus more on excessive for the level of arrears and failure to communicate their charges and the fact they would be ongoing and the failure on their part as to what would stop the charges being made. Point out that their charges and interest on the arrears was £2846 but the arrears themselves were £x (hoping that the £x is a lot less than £2846). If the have provided no support or communication offering help during any of that period then say that in the complaint.

yay

Hi, thanks for the reply. The arrears were £207 (1 missed payment).

The account is up to date but the arrears balance (which is entirely made up of fees) is being added to at £20/month or £240/yr. If this is just left to accumulate, it would add a further £1,920 in fees over the next 8 yrs of the term, I had foolishly assumed the initial charges for missing a month would have been added to the loan, not separately be viewed as arrears in a never ending cycle.

While I was 1 payment behind, they were writing to advise of a default fee per month but after I brought the account up to date, the monthly letters stopped, they have been adding £20 a month for seemingly doing nothing !