Woolwich mortgage help please!

Spalmer08

Hi all
I am hoping someone may be able to help. Many years ago my stepfather took out a mortgage with the Woolwich (joint with my mother). He dealt with all the bills etc.
When he passed away, 13 years ago, we were distraught to discover that despite paying a mortgage for years there was still a huge amount owing against the house. Apparently the mortgage was one where you could borrow, like an arranged overdraft, up to 80% of the value of the house (or original mortgage value it may have been).
I remember sitting shellshocked with the bank manager and saying “how is that possible?” But it was just the type of mortgage he was sold. You didn’t have to apply to borrow, you just had like a debit card (I think it was run through a current account) and it only stopped when you’d gone so far (80%) into the overdraft. He had a drink problem but worked, hiding most of the problem. He just spent and spent and my mother had no idea, said it was overtime.
I remember both my mother and me arguing that surely this is wrong but he had signed up to it. She almost lost her home.
Does anyone know what type of account this was? I still feel angry and beleive this was mis- sold but I don’t know how to complain.
Any help really appreciated

bigisi

Spalmer08 wrote: »

I... beleive this was mis- sold but I don’t know how to complain.

It wasn't. If anything it was mis-bought but even that's debatable depending on whether your dad knew what he was signing them up for.

Be angry at your old man for not telling your mum and her for not finding out about the household finances but the provider don't seem to have done anything wrong.

davidmcn

Even if there had been a case for mis-selling, you found out about it 13 years ago, and possibly he ought to have been aware before that, so you'd be well out of time to make any sort of claim now.

Spalmer08

Thank you. Totally get what you are saying. I am angry at him as my mother worked also and was nearing retirement. I just can’t seem to find what type of mortgage allows you to do this, the name of it. How you can practically have a £100k overdraft, paying extortionate interest fees and the mortgage never going down. Why didn’t they contact etc? I remember the back manager clearly saying it was a bad mortgage and they didn’t do them anymore. At the time we were grieving and terrified my mother would lose her home of 20 years. It’s just always niggled at me, it doesn’t seem right! And with all these Mis sold things going on I didn’t know if I could get it investigated 😬

Spalmer08

I should have said, they originally had an endowment but received notification that there wouldn’t be enough so needed to throw the towel in with that and change the mortgage. They had an advisor come round I believe and arrange it all

Cazza

It was known as Woolwich Openplan, a more generic name was a Current Account Mortgage. They worked well for some individuals, sadly it sounds like your Father wasn't one.

getmore4less

It was an offset mortgage known by Woolwich as open plan

There was current account reserve that allowed you to borrow back upto the original amount as a secured overdraft.

You could effectively run it as a interest only mortgage because as your mortgage went down the overdraft limit went up.


Barclays took over the running of these mortgages and have been trying to run down the reserves to get people back on track if they did not understand their situation.

The upside should be they were available as lifetime trackers a base + less than 1%

Kentish_Dave

As above, it’s a form of offset mortgage, where you can pay more or less dependent on your needs.

What is it that you want to complain about exactly? It sounds as though your parents applied for a mortgage, were given it, and that the bank stuck scrupulously to what was agreed. It’s going to really hurt to find out that your father blew the family money, but he’s the only one to be annoyed at, and he’s now gone. I can’t see any suggestion here that the bank has done anything wrong.

Had he bought a Ferrari and driven it into a tree would you be trying to claim that the salesperson had mis-sold it?

Spalmer08

Thanks everyone. Now I understand what type of mortgage it was it makes more sense. Yes, that was not the type he should have got but he must have signed up for it.

No need for the sarcasm Kentish Dave, it’s something that has niggled me for years and I didn’t know if a bit of foul play had gone on with the broker etc, selling him a new (wrong type) of mortgage as the endowment went tits up!

The bank manager couldn’t really explain it other than to say my step father had signed on the bottom line and he was sorry.

With all the pushes now because of the ppi deadline it brought it to the front of my mind as it always felt that it was insane this has happened, and I wanted to try and discover what it was all about.

I can now at least put this to bed in my mind, thank you. Google was completely useless as I didn’t know the name of the type of mortgage.

Regards to all

Let_Us_See

Just one quick point.


You mentioned your step-father "signed on the bottom line." However, if it was a joint mortgage, your mother's signature would also be required?


Does your mother remember signing?

getmore4less

The interest rate on the Overdraft mortgage reserve should have been the same rate as the mortgage if it was an offset

Just remembered

They also did mortgage reserves on regular mortgages where the rate was SVR.

Check which sort it was.


The main problem with these was they were sold as repayment mortgages but you could take all the capital payments back making them interest only.

I don't think anyone has put a case together to challenge the way the reserve operated
It is not straightforward, for offset would probably fail, regular mortgage might have a case as the borrow back was at a higher rate.

For those that did not set up an initial reserve, as they paid of capital they got one.

IMO the amount in the reserve should have only been overpayments not regular capital payments.