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Furness building society loan discrepancy

Hi, please can I have some help and advise.

In November 2004 my parents owned a flat above a commercial property they they also rented and owned a floristry business. The owner of the the shop offered the commercial property to my parents to buy as they already rented it. So they took out a Loan of £80,000 to buy the commercial property. it was £60,000 but they wanted to renovate the flat above as well so they took an extra £20,000. The solicitor they had at the time advised them to consolidate both property into one and the loan would be secured against the whole property (top i.e the flat and bottom i.e the shop). The original document in November 2004 state the loan is for £80,000 to be paid back over 16 years with monthly repayments of £478.96 with an interest rate of 5.24%. My parents were 47 and 48 at the time meaning the loan would be paid off before their retirement. Being happy with this the documents were signed and all was correct. Since this time by parent have now separated (not formally but do not live together any more and statement are sent to my father).
However due to lock down my mother has been clearing out and digging through paper work and came across the original documentation and realised that the loan is due to be paid off this month, November 2020. So she spoke to my farther and reminded him of this but then when he checked the last statement he received from Furness its states that there is still another 10 years to pay! that would mean the £80,000 loan would end up being repaid as £149,435 and they would be past retirement age. 
This obviously shocked my mother who called Furness BS and they advise that according to their records it was a mortgage taken out in January 2005 for 26 years.
Please can some one help as we have no idea what has gone wrong as we have the original documentation stating the loan was only for 16 years and what stands in any legal way to help my parent as they would never has agreed to this mortgage going into their retirement, and we have no signed documentation indicating this term.

Thank you!
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Comments

  • If you have the original document and, as far as you know, no further paperwork has been signed, challenge them on it. Ask them for copies of any paperwork that they have. Submit a subject access request and see what comes back.
    I came into this world with nothing and I've got most of it left.
  • fwor
    fwor Posts: 6,845 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Unfortunately the repayments they have been making are nowhere near enough to pay back £80k in 16 years - monthly payments would have to be closer to £660/month for that.
    In cases like this it would not be unusual for several options to be considered when the loan was originally taken out, and what you mother may have is an illustration for one of the other options. Unless it's the copy that they signed up to, it's not likely to be helpful.
    Unless they actually have documentary proof that they signed up to a 16 year term, I would suggest that they are just going to have to deal with the situation as it stands, because the simple fact is that - whatever the reason - they have not paid back anywhere near enough for it to be paid off this month.
  • fwor said:
    Unfortunately the repayments they have been making are nowhere near enough to pay back £80k in 16 years - monthly payments would have to be closer to £660/month for that.
    In cases like this it would not be unusual for several options to be considered when the loan was originally taken out, and what you mother may have is an illustration for one of the other options. Unless it's the copy that they signed up to, it's not likely to be helpful.
    Unless they actually have documentary proof that they signed up to a 16 year term, I would suggest that they are just going to have to deal with the situation as it stands, because the simple fact is that - whatever the reason - they have not paid back anywhere near enough for it to be paid off this month.
    The document out lining all the terms of the agreement '£80,000 over 16 years' is the document that was signed and agreed to by my parents. 
    So when you apply for a loan they send you two copies of the terms one to sign and send back and one to keep for you records.
    the document she has it the terms she signed up to.

  • fwor
    fwor Posts: 6,845 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Katlmorgs said:
    The document out lining all the terms of the agreement '£80,000 over 16 years' is the document that was signed and agreed to by my parents. 
    So when you apply for a loan they send you two copies of the terms one to sign and send back and one to keep for you records.
    the document she has it the terms she signed up to.

    Obviously, I can't see what document she has, but the sad, inescapable fact is that an agreement based on £80k over 16 years at 5.24% APR cannot result in monthly repayments of £478/month, so whatever she is holding in her hand doesn't help.
    The fact is that they have not paid enough in repayments, and arguing about the document that she has is not going to alter that.
    So they need to accept that another 10 years of repayments will be required - or the equivalent if they choose to pay it off as a lump sum to avoid the extra interest payments.

  • molerat
    molerat Posts: 33,530 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    edited 16 November 2020 pm30 5:39PM
    Using the loan calculator I get £60K at 5.24% APR over 16 years £462 per month and £80K over 26 years at £470.
  • fwor said:
    Katlmorgs said:
    The document out lining all the terms of the agreement '£80,000 over 16 years' is the document that was signed and agreed to by my parents. 
    So when you apply for a loan they send you two copies of the terms one to sign and send back and one to keep for you records.
    the document she has it the terms she signed up to.

    Obviously, I can't see what document she has, but the sad, inescapable fact is that an agreement based on £80k over 16 years at 5.24% APR cannot result in monthly repayments of £478/month, so whatever she is holding in her hand doesn't help.
    The fact is that they have not paid enough in repayments, and arguing about the document that she has is not going to alter that.
    So they need to accept that another 10 years of repayments will be required - or the equivalent if they choose to pay it off as a lump sum to avoid the extra interest payments.

    Thank you! Seems so frustrating that what they agreed to and signed is in the document and yet Furness have some something different with no signatures or agreed for by my parents.  I mean in all honesty it’s frustrating for me that it’s taken them 16 years to notice this. My parents feel swindled. Thanks for your all your help! 
  • For reference this is the first page of the document that has been signed 
  • molerat said:
    Using the loan calculator I get £60K at 5.24% APR over 16 years £462 per month and £80K over 26 years at £470.
    I have been trying to work it out and yes It looks like there has been an error when the Furness created the original document what I assume is that it should state the repayments over 26 years instead of 16. But what I wonder is because this is the document the bank as provided them to sign does that stand at all? In a legal manner? Or can the bank just say no sorry we made an error you signed a document that’s wrong and the document not longer stands? Because then the agreement is totally invalid is it not? Other wise if the loan was over 26 years and they knew this at the time they would never have agreed it. 
  • Why not take it to say Citizens advice first - just to see what they say about the legality or not of the term being wrong?

  • Why not take it to say Citizens advice first - just to see what they say about the legality or not of the term being wrong?

    Thank you yes that's tomorrows job really want to find out where they stand legally, as the document states in big bold letters it is legally binding. 
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