Possible mistake by mortgage lender

bally84

Hi money saving experts!

Not sure if I have put this in the correct category - it could fit into a few.

A few months ago my partner died very unexpectedly at 42 (I am 39).  We had just bought a house together and were joint owners.  When I notified our lender that my partner had died, they said that the mortgage would be suspended for 12 months as it came out of a bank account in his sole name.  Part of me thought that this was great, as it would buy me time to sort out my finances and get my life in order.  The other part of me thought it was too good to be true so I asked them to put it in writing.  They wrote to me to say that payments on the account would continue unless the payments came out of an account in a sole name, which they did.

At no point was it explained to me either on the phone or in writing that my mortgage would go into arrears and it would impact my credit rating.  I only found this out the other day when I happened to check my credit rating.  There are currently two missed monthly payments on my credit report and my score has gone down.  I called the bank and asked them what was going on and they explained that the interest was building up and that I was in arrears.  They had not written to me to tell me that this was the case.  I explained that no one would told me that this would happen.  I raised a complaint and the lender will come back to me on Tuesday.

I am wondering if anyone else has experienced this, and if and how it was resolved.  Might I be able to get this expunged from my rating if it turns out that the bank were not clear enough that this would happen?  If I pay the interest owed now will be credit rating go back to normal?  How worried should I be for my future that this is now on my credit record?  I have never, ever missed a payment on anything and it is very upsetting that this is happening.  I don't know worried I should be.  I appreciate your guidance.

MorningcoffeeIV

Clear the arrears while you await their response.

If they remove the missed payment markers, great. If not, then it's not the end of world.

Either way, your credit rating means nothing in lending, so don't be concerned of it drops again when you clear the arrears or markers are removed.

Brie

My condolences on your loss.  I'm fortunate to not have been in a similar situation but hopefully can provide some assistance in any case.

The only reason to worry about your credit history is if you are planning on taking out more credit in the next several months.  Your credit "rating" is a fiction and no creditor pays any attention to that as your history gives them the kind of detail they require.  

As for the mortgage provider....I would lodge a complaint with them via their vulnerable customer or bereavement team.  Given the situation they should have been well aware that you were unlikely to be in the best state of mind regarding what they were proposing and even if the interest did get mentioned you might be very unlikely to have taken that on board.  

Have another read through the information they sent you - it's possible that it doesn't say you would go into arrears but might refer to the T&Cs which may mention something pertinent.  Remind them that nothing was said on the call or stated directly on the letter sent to confirm their action so it is unreasonable for you to be aware of what their subsequent actions would be. 

Point out that your credit history is showing the missing payments and that is effecting you badly.  Tell them that you feel you have been "financially disadvantaged" (use that term) due to interest accruing despite them implying that it would not.  Ask them to add a note to your credit file that it is their error not yours. 

eskbanker

bally84 said:
They wrote to me to say that payments on the account would continue unless the payments came out of an account in a sole name, which they did.

But presumably the intention was to convey that you'd need to arrange payments from a different account?  Are you able to share the exact full wording used?

Hoenir

bally84 said:

They wrote to me to say that payments on the account would continue unless the payments came out of an account in a sole name, which they did.

Whose bank account is this? 

bally84

Hoenir said:

bally84 said:

They wrote to me to say that payments on the account would continue unless the payments came out of an account in a sole name, which they did.

Whose bank account is this? 

My late partner's

bally84

eskbanker said:

bally84 said:
They wrote to me to say that payments on the account would continue unless the payments came out of an account in a sole name, which they did.

But presumably the intention was to convey that you'd need to arrange payments from a different account?  Are you able to share the exact full wording used?

'The monthly repayments will continue unless they were being paid from a sole account in the name of X.  If you need to start a new direct debit, want to discuss the monthly repayments or have any questions about the mortgage account please call our Mortgage Servicing Team'.  

I still don't think this is clear given that they had told me on the phone that the mortgage would be suspended for twelve months.   It's very confusing.

bally84

Thanks for your comments, the bits about the credit history being a fiction are reassuring.

MorningcoffeeIV

bally84 said:

Thanks for your comments, the bits about the credit history being a fiction are reassuring.

Your credit history isn't a fiction. That's the real bit.

It's the credit score which is fictional.

Hoenir

If the mortgage wasn't being paid at all. Then arrears would mount. That's the natural course of events. They've granted you a stay of 12 months with no demand of repayment.  Interest however will continue to accrue. Until such time as the debt is repaid / refinanced. Being joint owners of the property. It has become 100% yours. With this comes the entire responsibility for the mortgage. 

Appreciate that this is a difficult time for you. Focus on resolving the immediate issues first. Tidying up your credit file can come later. 

eskbanker

bally84 said:

eskbanker said:

bally84 said:
They wrote to me to say that payments on the account would continue unless the payments came out of an account in a sole name, which they did.

But presumably the intention was to convey that you'd need to arrange payments from a different account?  Are you able to share the exact full wording used?

'The monthly repayments will continue unless they were being paid from a sole account in the name of X.  If you need to start a new direct debit, want to discuss the monthly repayments or have any questions about the mortgage account please call our Mortgage Servicing Team'.  

I still don't think this is clear given that they had told me on the phone that the mortgage would be suspended for twelve months.   It's very confusing.

The written word seems to be saying that they could only continue to take direct debit repayments if they weren't being paid from your partner's sole account, and that in that scenario, you'd need to set up a new direct debit to repay from an account in your name - obviously none of us has heard what was said on the phone so the verbal conversation may have conveyed a different impression, but if there's a discrepancy between recollections of what was said and what's put into writing, then the latter is generally going to be seen as the definitive version.

You should be able to get hold of a copy of the call recording if you submit a subject access request to the lender....