HSBC Unaffordable lending - Loan setup with NO affordability checks.

siauk

Hi all, just looking for some advise.

The short version:

1. Got divorced.
2. Agreed with wife I would pay her out & I would keep house.
3. HSBC say early repayment charged would need to be paid on joint mortgage.
4. Closed out joint HSBC mortgage and replace with HSBC one solely in my name.
5. HSBC tell solicitor Early repayment charge" had been waived as mortgage was going from HSBC to HSBC
6. New mortgage all setup up & completed 
7. HSBC then change their mind and the joint mortgage re-appears with EPC in it without contacting me
8. HSBC sets up a loan in my name for the joint morg ERC and demands that I pay the full amount.
9. I ask them to close the loan and let them know I cant pay it.
10. HSBC continue to hassle me, chase the loan and affects my credit rating
11. HSBC admitted that No affordability checks were carried out in a letter.
    

The long version:

Around 5 years ago I separated from me wife. It was agreed that I would keep the house & paid her the agreed amount to do so.

We had a joint HSBC mortgage which HSBC advised me that we would have to pay an early repayment charge on the joint Morg & I would need to re-mortgage to take her name off and re-mortgage it just in my name. HSBC advised me to use there own solicitor for the Morg.

This was all completed smoothly, and the solicitor advised me that the HSBC had told them that the ERC "Early repayment charge" had been waived as I was moving the morg  from HSBC to HSBC. This was great news as ££ was tight.....

All completed and in my banking app I could see me new mortgage and the old joint one was paid off and in credit by £500 or so pounds, happy days divorce all sorted......

So I thought....

Then a few days later I noticed in my banking app that the joint mortgage had re-appeared and had a balance of roughly £3000, I called HSBC and they told me not to worry this mistake would be sorted out.

At this point I had my new mortgage of £125k & the £3000 and both were saying that Direct debits were going to be taken out at the end of the month roughly £700 for each & I told them I cant afford to pay double mortgages £1400 a month..... And that I was told this error would be sorted....

I got no where with HSBC despite having an copy of the HSBC internal email that said the HSBC ERC had been waived, I think they offered me £50 compensation at this point & that was it. 

I explained that I could not afford to now pay the ERC and also pointed out that with was from a joint account and not just my responsibly & that it was HSBC made a mistake.

I went to the FOS and all of a sudden a loan account appeared in my banking app for £3000 and the money from mortgage account was transferred to this loan account. I called HSBC and asked what this loan account was and they did not know?

A few days later I received some paperwork for the loan and it asked me to sign and return in 7 days, I called HSBC for more info but they could not provide any. I noticed that it had a cooling off period so I signed and returned the form. Stupid me..., not thinking straight after divorce.....

I then realised that I could not afford to re-pay the loan so before any payments were due I asked for the loan to be cancelled under the cooling off period as I could not afford to pay it. HSBC ignored my request then refused to cancel it.

Since then they have been chasing the loan and I keep telling them that I cannot afford to repay it......   

As far as I am concerned there has been a whole manner of issues with this & I feel like I have been forced into the situation & HSBC has made error after error.....

I have told them I feel this is unaffordable lending & Loan setup with NO affordability checks, they did not even ask if I was employed at the time of setting it up or if I had any income.

They have admitted that No affordability checks were carried out in a letter.

This whole issue has had a massive effect on my well being, credit file and a huge affect on me. I would be interested on anyone thoughts on where to go next?

There are also load more errors made my HSBC such as they kept sending the 1974 credit consumer act letters to the wrong address, when they called they kept saying that they had sent these letters & when I asked they admitted they had been sent to a HSBC branch in Sheffield????

Sorrys it was a bit long.

Simon
 

LaHostessAvecLaMostess

The loan appears to be largely a red herring.

They believe you owe them £3000. How they present this to you is largely irrelevant. The alternative would just be to leave the amount outstanding on the mortgage and demand repayment via that account instead.

What they've done seems a little unusual but I don't see what you stand to gain from trying an unaffordable lending complaint really.  You also don't know that they haven't done any checks. The fact that you can't afford it doesn't mean no checks were performed.

siauk

Hi

Thanks for the response, I do know that no checks where made as I asked and they admitted done were made at all.
They don't even know if I'm employed, let alone any other details.... Because they have never asked....

siauk

Sorry none not done:

Thanks for the response, I do know that no checks where made as I asked and they admitted none were made at all.

[Deleted User]

There wasn't any need for affordability checks as the interest free loan was simply a way of spreading out the cost of the debt you already owed to them. There was no change in indebtedness and therefore in affordability. 

The only issue you can concentrate on is whether the ERC is owed or not. But if a mistake was made in them saying it wasn't, then they can correct that mistake.

LaHostessAvecLaMostess

siauk said:

Sorry none not done:

Thanks for the response, I do know that no checks where made as I asked and they admitted none were made at all.

As zx81 says it is an interest-free loan that consolidated another debt so no affordability checks would need to be done as you already owed the money, there was no new lending offered.

The letter also indicated this was done at the request of the FOS so not sure why you seem to think it appeared out of the blue?  Presumably, the FOS informed you of their decision.

All they have done is shift the debt from one repayment vehicle to another, nothing to complain about really.

siauk

Yeah I see what you are saying.

But HSBC told me that the ERC was waived & no longer needed so I was not expecting to pay it, I then borrowed funds from elsewhere to pay my ex wife in regard to the divorce.

The ERC was then added back to my account later on well after this.

It was also it was from a joint account so I was not expecting to pay the full amount myself in the first place as it should of been split with my ex wife also.

LaHostessAvecLaMostess

siauk said:

Yeah I see what you are saying.

But HSBC told me that the ERC was waived & no longer needed so I was not expecting to pay it, I then borrowed funds from elsewhere to pay my ex wife in regard to the divorce.

The ERC was then added back to my account later on well after this.

It was also it was from a joint account so I was not expecting to pay the full amount myself in the first place as it should of been split with my ex wife also.

This has gone to the FOS and you appear to have lost there so clearly the FOS didn't agree that the ERC wasn't due.  I'm guessing someone made a mistake in informing you of this, but you can't use that as some sort of cast-iron evidence that no money was owed.

Joint debts are jointly and severally liable. They can go after either party for the full amount if they wish.  They often go after whoever they think they are more likely to get the money from.  If you have some sort of agreement with your wife to repay her share then that is between you and your wife, HSBC isn't going to be interested in it.

siauk

Hi, thanks for the info,

The outcome of the FOS did not get anywhere as I rejected the offer & the final FOS response was:
"Because you have reject our decision, neither you nor HSBC is bound to it. I have now closed our file on this case."

I also have copies of the email from HSBC following a SAR from HSBC confirming that the ERC was not required, HSBC later accepted that the below was a mistake after the mortgages had been transferred:

LaHostessAvecLaMostess

siauk said:

Hi, thanks for the info,

The outcome of the FOS did not get anywhere as I rejected the offer & the final FOS response was:
"Because you have reject our decision, neither you nor HSBC is bound to it. I have now closed our file on this case."

I also have copies of the email from HSBC following a SAR from HSBC confirming that the ERC was not required, HSBC later accepted that the below was a mistake after the mortgages had been transferred:

So the FOS sided against you, presumably, but HSBC appear to have followed their decision anyway I'm guessing.

As I said, that letter means nothing.  Someone has made a mistake.  Whilst you could probably have gotten £50 out of HSBC for the mistake, the FOS clearly accept that a mistake was made.

siauk

Yeah HSBC have accepted that it was a mistake along with various other mistakes such as sending letters chasing the money to wrong addresses.