NRAM Together Mortgage – Should I push for Default?

DrWatson1

I’m after some advice on my NRAM Together mortgage. I entered a DMP around 5 years ago, and most of my creditors marked my accounts as defaulted, meaning they will start dropping off my credit file next year.

However, NRAM did not default me and my credit report for them is marked as “late payment”.

My current arrangement with them has me paying £5 per month, with the interest frozen. The balance outstanding is £26,876.

My question is, should I push for them to default my account, and have it backdated 5 years? My main concern is once they have defaulted, they can obviously go down the CCJ/charging order route, and as the loan is not regulated by the CCA, then as I understand it, statutory interest of 8% pa can be added….

This is all a bit of a can of worms, and I’m sure I’m not the only person in this position. I’d be interested to hearing from people in a similar position to me, as despite doing a search for “NRAM”, I haven’t found anyone with any “default” issues.

antrobus

Unless I'm missing something, "paying £5 per month", means that NRAM have six years from the date of the last payment to "go down the CCJ/charging order route". The date of default doesn't determine when it becomes statute barred, so I don't think it matters.

sourcrates

What the OP means is that as long as the account has not defaulted, legal action cannot be taken, as a default notice must be issued first.

I must just add that a default notice, and a default on your credit file, are two separate things.

If a default notice has already been issued, then they could, feasibly, take legal action any time they wanted.

DrWatson1

sourcrates wrote: »

What the OP means is that as long as the account has not defaulted, legal action cannot be taken, as a default notice must be issued first.

Yes, exactly.

I have a pile of old paperwork, but i'm fairly certain a default has not been issued. The current arrears are only the accrued amount of missed payments - they have not made the full amount due.

The_Debt_Expert

Is this still an actual mortgage or just a mortgage shortfall? I'm assuming a shortfall but not sure. Or is it the unsecured loan that goes alongside the mortgage with NR Together mortgages?

If it is a shortfall debt, the debt isn't going to be anywhere statute barred if it's been paid at £5/month since. Also be aware that for mortgage shortfalls the limitation period is 12 years rather than 6 for the capital part of the mortgage, and 6 for the interest.

There's no time limit on NRAM going for a CCJ other than if it ever became statute barred.

If the property was repossessed then the original mortgage agreement was broken anyway so there's nothing to default - unless it's the unsecured loan you're referring to. For unsecured debts, it's possible to argue against defaults placed on years after the agreement should have defaulted. Creditors should issue a default notice and terminate the agreement at the earliest date they can.

Basically, a lot more information is needed for anyone to give accurate advice.

DrWatson1

Sorry I could have been clearer - I am a homeowner with around £40k remaining on my mortgage, and all secured payments are up to date. The £5 a month I pay towards the unsecured element of the NRAM loan is through a DMP with stepchange, and I've been paying that amount for around 2.5 years.

Having done some further reading, I think my best course of action is to continue with my current arrangement. I don't think there is anything to be gained by asking them to default me; however, should they decide to default me, I assume I have good grounds to argue they should backdate it to the point when my account fell 6 months in arrears?

The_Debt_Expert

Okay thanks for the information.

Regarding the Consumer Credit Act: If the unsecured loan was under £25,000, it will be regulated by the CCA. If it was over £25,000 but taken out since April 2008, it will also be covered. But if it was over £25,000 and taken out before April 2008, it won't be covered by the CCA.

If it is covered by the CCA, then the guidance is that the account be defaulted within 3-6 months of the account falling into arrears. If this wasn't done, you could complain and if necessary raise it to the Financial Ombudsman.

If you require any further advice I'd recommend contacting SC and speaking to a debt advisor there for more personalised support.

DrWatson1

The_Debt_Expert wrote: »

But if it was over £25,000 and taken out before April 2008, it won't be covered by the CCA.

It was this, so it's not covered - even though the paperwork explicitly states it is covered (apparently statute barred works both ways, who knew....)