Clydesdale M'gage Banking Ombudsman ^ Small Claims Court.

Paul_K_2

In brief - 
I had a mortgage with the Clydesdale
I applied for 3 months of reduced mortgage payments for Jul Aug Sep 2019
I asked if the reduced payments would put me affect my credit rating as I was planning to re-mortgage
I was told

“It would have a minor effect on the credit score however because it’s a managed situation it wouldn’t be like you were missing payments it’s not like it’s a big black mark it’s a tiny little tick where we’ve been assisting you through this, it would show reduced payments still being made so obviously the payments are being made and with the banks agreement basically. So it’s not like you were just not paying for two months, you’re entering a plan with us which is being managed”.

And

“OK so while you’ll be in an arrears position you may find it more difficult to get a re-mortgage elsewhere however once they’re clear it would be you’ll be able to get a new mortgage or a new mortgage with us as easy as ever is the basic line obviously while you’re going through an arranged arrears position it may be slightly harder that’s what it is”.

These are from a recording I have of the conversation I had with the Clydesdale representative.

I paid the arrears in Feb 2020. In August 2020 the Leeds BS, after making an initial offer in principle, then withdrew it because of the negative marker Clydesdale had added to my credit rating. I eventually got a mortgage via a broker with Vida Homeloans at a higher interest rate. In all I would have saved around £11k if I had been able to re-mortgage with the Leeds.

 I complained to Clydesdale but they rejected my complaint.

I then went to the Banking Ombudsman with a claim but they declined to address it as I was 13 days outside the 6 month time limit, this despite waiting 3 months for Clydesdale to send me a recording of the conversation.

So, due to being misled by the Clydesdale representative I will be £11k out of pocket.

The question I have is can I got to the small claims court to recover the money from Clydesdale. (I'm happy to reduce the claim to <£10k)

Cheers, Paul

Thrugelmir

Was your choice to switch lender. That's outside of the Clydesdale's control.  Reduced payments suggest financial distress. A red flag to any new lender. The higher interest rate with Vida reflects the perceived increase in risk.  That's the way risk is priced. 

K_S

@paul_K_2 The way he has explained it (especially the first paragraph) is really really poor, misleading and plain wrong. I think the person you spoke to simply didn't have a clue and shouldn't have said all that. Recent mortgage arrears are a big black mark as you have found out.

It doesn't help you in this case but you should always escalate to the FOS the day after 8 weeks have elapsed, that doesn't stop Clydesdale from continuing to work on the complaint.

The primary question is, why did you move away from Clydesdale, could you not have switched products and stayed with them?

Paul_K_2

Thrugelmir said:

Was your choice to switch lender. That's outside of the Clydesdale's control.  Reduced payments suggest financial distress. A red flag to any new lender. The higher interest rate with Vida reflects the perceived increase in risk.  That's the way risk is priced. 

I think you're missing the point. I was mislead by the Clydesdale representative and that has forced me to a secondary market lender (Vida) with extra cost. If the representative had said it will go down as mortgage arrears and seriously affect your credit score I would of carried on paying the mortgage. I had two other options to get me over the temporary financilal "distress"
But thanks for replying!

Paul_K_2

K_S said:

@paul_K_2 The way he has explained it (especially the first paragraph) is really really poor, misleading and plain wrong. I think the person you spoke to simply didn't have a clue and shouldn't have said all that. Recent mortgage arrears are a big black mark as you have found out.

It doesn't help you in this case but you should always escalate to the FOS the day after 8 weeks have elapsed, that doesn't stop Clydesdale from continuing to work on the complaint.

The primary question is, why did you move away from Clydesdale, could you not have switched products and stayed with them?

Thanks for replying K_S
As I was still in correspondance with Clydesdale, in my ignorance I believed I had 6 months from their final refusal to deal with my complaint.
I moved from Cldesdale as I had to raise money for a divorce settlement and needed an interest only mortgage at £450 a month whilst the existing mortgage was £1750. Clydesdale wanted a minimum income of £100k for interest only mortgage so I couldn't stay with them.
Question is can I take the case to the small claims court?

MWT

Paul_K_2 said:

The question I have is can I got to the small claims court to recover the money from Clydesdale. (I'm happy to reduce the claim to <£10k)

To answer this one I'd say probably not, but call Citizen's Advice and get their opinion...

There isn't actually a 'small claims court' any more, it is just a process for 'money claims'

https://www.gov.uk/make-court-claim-for-money

... and it is aimed at simple clear cases that do not require much more than a statement of facts to allow judgement.

Thrugelmir

Paul_K_2 said:

Thrugelmir said:

Was your choice to switch lender. That's outside of the Clydesdale's control.  Reduced payments suggest financial distress. A red flag to any new lender. The higher interest rate with Vida reflects the perceived increase in risk.  That's the way risk is priced. 

I think you're missing the point. I was mislead by the Clydesdale representative and that has forced me to a secondary market lender (Vida) with extra cost. If the representative had said it will go down as mortgage arrears and seriously affect your credit score I would of carried on paying the mortgage. I had two other options to get me over the temporary financilal "distress"

Suggest you find suitable legal representation as you are going to require something more substantive to pursue a claim. Not least because August 2020 was in the midsts of Covid and all lenders had tightened their lending criteria considerably.  Somewhat different climate to June 2019 to when you originally enquired.  You could have remained with Clydesdale rather than switching lender. Was the purpose of the remortgage to release equity? 

amnblog

It sounds like you could not maintain contractural payments to Clydesdale and you asked them to give you some breathing room. They agreed and this was reflected on your credit file. They even warned you of this - ‘ you’ll be in an arrears position you may find it more difficult to get a re-mortgage elsewhere ‘
Clydesdale are not responsible for the later lending decision of Leeds BS, nor your need to raise funds for your divorce, or your decision to remortgage with an offer from Vida.
It looks a little baffling to me why you feel you have a claim here.

K_S

Paul_K_2 said:

K_S said:

@paul_K_2 The way he has explained it (especially the first paragraph) is really really poor, misleading and plain wrong. I think the person you spoke to simply didn't have a clue and shouldn't have said all that. Recent mortgage arrears are a big black mark as you have found out.

It doesn't help you in this case but you should always escalate to the FOS the day after 8 weeks have elapsed, that doesn't stop Clydesdale from continuing to work on the complaint.

The primary question is, why did you move away from Clydesdale, could you not have switched products and stayed with them?

Thanks for replying K_S
As I was still in correspondance with Clydesdale, in my ignorance I believed I had 6 months from their final refusal to deal with my complaint.
I moved from Cldesdale as I had to raise money for a divorce settlement and needed an interest only mortgage at £450 a month whilst the existing mortgage was £1750. Clydesdale wanted a minimum income of £100k for interest only mortgage so I couldn't stay with them.
Question is can I take the case to the small claims court?

@paul_k_2 Imho , even if this was taken up by the FOS, the most you would get is a token amount for the poor way in which the implications of mortgage arrears on your credit report were communicated.

The way it'll be seen is that the need to raise cash, go interest only and move lenders was your decision and not something forced on you by Clydesdale.

dunstonh

I am struggling to see any actionable wrongdoing here.   The information in 2019 may not be the best worded but it does give you warnings.  Authorised arrears affect your credit status less than unauthorised arrears.
Leeds BS made you an agreement in principle but changed their mind as they changed their lending criteria to be more cautious. As did many lenders during 2020.   That would not have been predicted in 2019.
Also, the Clydesdale rep is not responsible for the lending criteria of other lenders.  You got a mortgage elsewhere.  So, it didn't stop you from getting a mortgage    You just didn't get a mortgage with a particular company.     Your financials seem to be poor even without the arrears history.   None of that is down to Clydesdale.

The FOS is more consumer-friendly than the courts. They probably would have awarded £100 for the warnings not being worded as well as they could have been but the courts don't work that way.   You are asking for too many additional unconnected events to be disregarded.
Leeds didn't reject you because of the authorised arrears.   They rejected you as all bits of your situation took you outside of their lending criteria.  The authorised arrears would be part of it but so would you borrowing on interest-only basis, and needing further money and seeing the lending criteria tighten during CV.   A lending decision is a totting up of positive and negative things.  One negative doesn't mean you will get rejected.  However, multiple negatives can turn it into a rejection.    
You are out of pocket because of your choices.  Not because of Clydesdale.

Paul_K_2

dunstonh said:

Leeds BS made you an agreement in principle but changed their mind as they changed their lending criteria to be more cautious.
You are out of pocket because of your choices.  Not because of Clydesdale.

My broker was told the withdrawal of the offer by Leeds was because of my credit rating. I met all the other criteria.
And those choices were based on misleading information from Clydesdale - you’ll be able to get a new mortgage or a new mortgage with us as easy as ever