Debt incurred by mortgage lender's mistake, and their evasion of the issue

Hellup

Hi,

My first time here. I can't find anything specific to my case after searching, but apologies if it's already addressed elsewhere. I'll *try* to keep it brief!

I was in arrears on my mortgage at the start of 2019. My case had been transferred to Santander's lawyers and I was facing repossession. After consulting with CAB I decided to use my pension to clear the arrears. Despite my completing a form allowing my CAB advisor to act on my behalf, the lawyers would only deal with me and it was always by telephone. Before taking the plunge and using my pension, I asked for assurance that the payment required of me would clear my arrears, charges, interest and any other outstanding debt, returning my monthly repayments to what they should be for the current interest rate. I was told that this was the case.

I was therefore shocked when my monthly repayment, after paying off the arrears etc, immediately shot up by about 40% to £510 per month. Santander told me this was because the amount of capital I had to pay back in the remainder of my 25-year term had increased. They didn't explain why this was the case and I had the strong feeling that they were being evasive whenever I asked where this increase in capital repayment had come from.

I eventually went through their complaints department and on 14/5/19 received a very long-winded letter filled with numbers that didn't tell me anything I didn't already know. Crucially, it still didn't explain where the ca. 40% increase had come from. In order to keep their lawyers from my door, I started paying the requested £510 per month.

I had reason to contact them again last week, regarding an SMI loan application that had dragged on for months. Two key points that arose from the conversation were 1) that they had just received backdated SMI payments totalling nearly £500 and 2) my monthly repayments were rising to £551, again due to the amount of capital I needed to repay within my remaining mortgage term. I pointed out that they had just received an additional lump sum of nearly £500 and I had been meeting my monthly repayments of £510, so how could the capital to be repaid have increased again? The conversation went in circles, with this central question being evaded. Eventually the woman I spoke to offered to put me through to the complaints department...again.

I waited a long time to be connected, then spoke to a very 'abrupt' woman who informed me that Santander had made a mistake, going back to 2016 I think she said, and hadn't asked me for a high enough monthly repayment to cover my mortgage. This is how I had effectively fallen into another set of arrears that I knew nothing about. However, she admitted that this was Santander's fault and, if I wished, she could forward it to what I think she called a Remediation Team. She explained that this could result in Santander 'writing off' some of the outstanding capital and reduce my monthly payments. I asked if this would return my monthly repayments to the expected amount of about £359, as I was assured of before using my pension to pay the arrears, and she said no: there would still be an increase in my monthly payments.

So my current situation and questions are:

1. I can't expect a response from the 'Remediation Team' before March 2020. Presumably I should continue to pay £510 or even £551 per month until I do (still awaiting the letter from Santander regarding the increase to £551).

2. As I see it logically (though I realise logic doesn't necessarily have anything to do with it) they have overcharged me for more than 6 months now because of a mistake that they made, so I should be entitled to a refund of the overpaid amount and a return to my expected monthly payments of ca. £360 per month. Is this realistic?

3. What exactly is required of Santander regarding the writing-off of debt that has arisen because of their error?

4. Should I report this to the financial ombudsman (I will call them after this)? If Santander had been up-front about this back in February 2019 instead of evading the issue for almost a year it wouldn't have been a big deal. However, to be blunt, I feel as though I have been scammed into paying 40% more per month than I should have been.

Sorry the post is so long, but I've tried to include the most relevant information.

Any guidance would be much appreciated!

ACG

I think you are going to struggle to get this answered on here.

I think you need to make the complaint official and ask them if they can sort something out in the meantime with the repayments without showing arrears on your credit file.

They have a responsibility to put you in the position you would have been had the mistake not happened, realistically that is going to mean upping your payments unless they are prepared to write off the difference, but that would be a goodwill gesture rather than a requirement I think.

I can see them doing it though if the figures are not huge. They have a choice of arguing it, spending time investigating and then it ended up with the ombudsman they need to weigh up whether they should be cutting their losses or doubling down.

Tricky one. I think you need to go through the process with Santander and then refer it over to the ombudsman once you get their response but it is not straight forward so could take a couple of weeks/months to look into it all and come back to you with an answer and a resolution.

Maybe make their life easier and tell them what you want - I used to work in complaints for a different bank and would love it if they said what they wanted. Sometimes people were just unreasonable but if it seemed about right, we would usually just agree with it as it was easier than debating about the minor details.

Hellup

Thank you for the reply ACG. I'll wait and see what Santander say in or after March then. I've been trying to find out if there are any actual requirements regarding 'refunds' covering their errors and if I can find something concrete I'll post it here for others.

I only have 15 months left on my mortgage term so unfortunately even a relatively small sum owed will become a relatively high monthly payment.

Does it never end?

getmore4less

If you want help you need to put up the numbers going back to before you went into arrears.

The only numbers you have posted are the £500(ish ones) which are meaningless with no context.

The numbers that are important
The capital owing from before the arrears and any time from then to now

The interest rates(and dates they may have changed if on fixed term).

All payments made

Full term(to the month, ie the end date).

Can start from those and build up the cashflow trail to see how you got to where you are now.

I only have 15 months left on my mortgage term so unfortunately even a relatively small sum owed will become a relatively high monthly payment.

That will almost certainly contributed to the problem unless you paid up enough to cover all the missed payments and extra interest accumulated from those.

need the numbers.