HSBC Unaffordable lending - Loan setup with NO affordability checks.

LaHostessAvecLaMostess

siauk said:

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



  

Right, which presumably the FOS dealt with but you rejected their decision.

HSBC appear to have implemented the FOS's direction that the outstanding ERC should be offered as an interest-free loan.  Irrespective of your rejection which they are within their rights to do this.  As I said, this is not an unaffordable lending complaint.  You already owed the money, they are simply getting it repaid in the form of a loan, rather than demanding payment in full, apparently at the FOS's direction.

I'm not sure who you'd make an unaffordable lending complaint to anyway, given it's the FOS who told them to do this.

siauk

Okay thanks for your advise, either way I cant afford to pay it anyway which I have told them since they re-introduced it to my account.

LaHostessAvecLaMostess

siauk said:

Okay thanks for your advise, either way I cant afford to pay it anyway which I have told them since they re-introduced it to my account.

Well then, negotiate the repayment over a longer period if you can, otherwise, it'll default.

In case you were wondering an unaffordable lending complaint wouldn't result in the capital being written off, only the interest, and as this is an interest-free loan anyway you'd be no better off.

siauk

It already has defaulted as I cant afford any payments unfortunately. Plus I'm not sure why it has just landed for myself to resolve as well as it originated from a joint account.

LaHostessAvecLaMostess

siauk said:

It already has defaulted as I cant afford any payments unfortunately. Plus I'm not sure why it has just landed for myself to resolve as well as it originated from a joint account.

Because as I said they're entitled to chase either of you,  and that means they're going to chase the one they think is more likely to cough up.

To be fair, you took on the mortgage so it's arguably not unreasonable to chase you.

The alternative would have been that the joint mortgage defaulted with your house being repossessed.  As I suspect this loan is unsecured (although there is a chance it isn't) you're arguably a lot better off than you could have been.

siauk

Yes I know what you are saying, but I feel as HSBC officially told the solicitor that no ERC was required, the mortgages transferred over and then they added the ERC back on later it put me in a vulnerable financial situation as I was officially told this fee did not need to be paid. Let alone paid 100% by me as I knew I could not afford it...

But thanks for your help it as been helpful thanks.

LaHostessAvecLaMostess

siauk said:

Yes I know what you are saying, but I feel as HSBC officially told the solicitor that no ERC was required, the mortgages transferred over and then they added the ERC back on later it put me in a vulnerable financial situation as I was officially told this fee did not need to be paid. Let alone paid 100% by me as I knew I could not afford it...

But thanks for your help it as been helpful thanks.

They made a mistake, something which the Ombudsman agrees.  Your contract stipulates that the ERC is due when repaying the mortgage before a certain date.  Their letter, unless it very specifically changed this aspect of the contract, is simply a mistake.  I'm convinced a court would agree.

I suspect that the Ombudsman acknowledged that their mistake put you in a difficult position, and probably ordered some compo to be paid as well as the outstanding amount to be paid back over time with zero interest.  Their decision was essentially "as good as it gets" and you appeared to have flushed it down the toilet.  Oops.

I'm not sure why you did this.  You appear to have done nothing since then so what was your next plan of action?  Presumably, you can do whatever that was, although I'm unconvinced you're getting out of repaying this.

siauk

I have not paid it as I cant afford to do so which is what I have told HSBC since the start.

When I took out a loan to cover my divorce I was told by the solicitor & HSBC that the ERC was not applicable, therefore I only borrowed the amount that I needed and this was pushing myself to teh limit. I was not expecting to borrow an extra 3k after as I was told the ERC had been waived as I the old mortgage was from HSBC to HSBC.

Plus I was only expecting to pay 50% not 100% of the ERC in the first place as it was from a joint account...

LaHostessAvecLaMostess

siauk said:

I have not paid it as I cant afford to do so which is what I have told HSBC since the start.

When I took out a loan to cover my divorce I was told by the solicitor & HSBC that the ERC was not applicable, therefore I only borrowed the amount that I needed and this was pushing myself to teh limit. I was not expecting to borrow an extra 3k after as I was told the ERC had been waived as I the old mortgage was from HSBC to HSBC.

Plus I was only expecting to pay 50% not 100% of the ERC in the first place as it was from a joint account...

That's not how joint debts work.  Has your divorce been finalised?  If not can you include the £1500 in it?

If the solicitor told you it wasn't applicable was that because HSBC said there was no ERC to him or did he err himself?  I can't help but think that you're really far better off than you would have been if things had played out properly.  You'd be looking at either selling the house as the ERC was unaffordable or including it in the mortgage and paying interest on it for however long.

Now you have a default (not great) but you still have the house and you're not paying any interest on the ERC.

siauk

Yeah the divorce was finalised years ago.

And yes HSBC told the solicitor that there was no ERC "See above for that  email highlighted in yellow"

At one point HSBC added x2 ERC to the account days after all the legal stuff had gone through... When I called HSBC to ask what was going on not one knew. They just said don't worry we will sort it...