Bank withhold my £21K from my mortgage account

Nelle40

hello, 
Can some one please help? Is it fraud if the bank collects funds from my endowment policy but fails to add those funds to my mortgage account? Like for 3 years?

In the meantime, they insist that I am the one responsible for collecting policy funds.

What can I do about it?

TIA for all advice

penners324

It might be an administrative error, certainly not fraud.

You get all the information (dates, amounts and references used) you can about this payment from the endowment company and present it to your mortgage company to investigate.

Lodge an official complaint as well.

400ixl

Slightly confused with what you mean here.

Do you mean that you had an endowment policy which matured? An endowment policy is separate to what I assume is an interest only mortgage, usually from a different provider. This usually pays out to the policy holders personal account (or as a cheque) on maturing and the policy holder is then free to make a payment to the mortgage provider against that policy. At least that is how ours would have worked (paid the mortgage off early so it didn't need to be paid off by the endowment in the end).

user1977

Where were the funds, if not in your mortgage account?

Nelle40

Thanks for all the responses.

To clarify: mine was a endowment mortgage arranged by the bank with guarantees.  The endowment policies were set up by the bank and assigned to themselves as per requirement of the mortgage contract.

When the mortgage completed, they collected to the policy funds. I do not know where they kept the funds. But they failed to reduce my mortgage account, and continued to charge me interest on the whole outstanding amount.

I reported them to the Financial ombudsman who say Bank has done nothing wrong because hey have collected the money.  The FOS  failed to investigate and prove that the bank failed to add those funds to my mortgage.

MattMattMattUK

Nelle40 said:

Thanks for all the responses.

To clarify: mine was a endowment mortgage arranged by the bank with guarantees.  The endowment policies were set up by the bank and assigned to themselves as per requirement of the mortgage contract.

When the mortgage completed, they collected to the policy funds. I do not know where they kept the funds. But they failed to reduce my mortgage account, and continued to charge me interest on the whole outstanding amount.

I reported them to the Financial ombudsman who say Bank has done nothing wrong because hey have collected the money.  The FOS  failed to investigate and prove that the bank failed to add those funds to my mortgage.

Have you checked your mortgage statements for the last few years to see if this has been allocated, but just not in the way you expect (eg. a lower amount than you thought)?

Nelle40

MattMattMattUK said:

Nelle40 said:

Thanks for all the responses.

To clarify: mine was a endowment mortgage arranged by the bank with guarantees.  The endowment policies were set up by the bank and assigned to themselves as per requirement of the mortgage contract.

When the mortgage completed, they collected to the policy funds. I do not know where they kept the funds. But they failed to reduce my mortgage account, and continued to charge me interest on the whole outstanding amount.

I reported them to the Financial ombudsman who say Bank has done nothing wrong because hey have collected the money.  The FOS  failed to investigate and prove that the bank failed to add those funds to my mortgage.

Have you checked your mortgage statements for the last few years to see if this has been allocated, but just not in the way you expect (eg. a lower amount than you thought)?

Once the mortgage matured they did not produce any statements so I do not know what they did with it.  

Why would they not reduce the outstanding mortgage immediately. What would be the point of putting it aside(allocated?)?   

The only thing I could see was that the interest was not reduced. Not by one penny.  So none of the funds were used to reduce my mortgage.

penners324

Have you requested mortgage statements from them?

MattMattMattUK

Nelle40 said:

MattMattMattUK said:

Nelle40 said:

Thanks for all the responses.

To clarify: mine was a endowment mortgage arranged by the bank with guarantees.  The endowment policies were set up by the bank and assigned to themselves as per requirement of the mortgage contract.

When the mortgage completed, they collected to the policy funds. I do not know where they kept the funds. But they failed to reduce my mortgage account, and continued to charge me interest on the whole outstanding amount.

I reported them to the Financial ombudsman who say Bank has done nothing wrong because hey have collected the money.  The FOS  failed to investigate and prove that the bank failed to add those funds to my mortgage.

Have you checked your mortgage statements for the last few years to see if this has been allocated, but just not in the way you expect (eg. a lower amount than you thought)?

Once the mortgage matured they did not produce any statements so I do not know what they did with it.  

I think you really need to delve into some of the paperwork for the endowment, that should fully detail the redemption process, then you can establish if either yourself, or the bank is not following it and exactly how to get things moving again.

Nelle40 said:

Why would they not reduce the outstanding mortgage immediately. What would be the point of putting it aside(allocated?)?   

They may not do that because it may not be structured that way, the endowment and the mortgage may not be part of the same product even though they were sold at the same time. There could be issues if the endowment does not clear the mortgage in full as expected, but as the mortgage has not been extended there is not a standard mortgage account to pay it into etc.

Nelle40 said:  

The only thing I could see was that the interest was not reduced. Not by one penny.  So none of the funds were used to reduce my mortgage.

How can you see that if you do not have any mortgage statements? 

You need to ask for mortgage statements, submit information request to all the relevant bodies, eg. the mortgage provider, endowment provider, the bank (the lending arm may be different), any broker involved in the process. Once you have all the detail you can then approach the body which has caused the problem. You say "When the mortgage completed, they collected to the policy funds." but how do you know that actually took place? I am wondering whether there is a procedure where you have to request those funds are released to the bank, as the situation may exist where you had already paid off the mortgage for example. 

When you have all of that and you can see as much as what has happened and hopefully find where the blockage in the system is. If that does not resolve things then you can start the formal complaints procedure where relevant, the bank, the mortgage provider etc. and after eight weeks if it is still unresolved you can take it to the ombudsman, at which point you will know who to complain about and for what specific reason.