Shortfall balance payment demand from Hessonite

mutterances

Up until Apr 2012 I had a mortgage with Northern Rock / NRAM. I switched at this time to a new provider.

For some strange reason, in the process of changing mortgage provider I was refunded the final mortgage payment I'd made to NRAM (approx £1,000). I then also discovered that NRAM had not been charging me the correct monthly amount, causing me to pay more interest (and in theory, if the mortgage had run its full 30 years, it wouldn't have sufficiently paid it off at the end).

I opened a case with the Financial Ombudsman soon after, withholding returning the final payment to NRAM. I calculated the amount NRAM's mistake had cost me in interest, and was willing to pay back the difference of about £250. The case dragged on for ages, and while it looked promising, it was ultimately dismissed by the FO (I believe in autumn 2013).

NRAM handed over the debt collection to a third party, who called me pretty much every day for several years. No action was ever taken, eventually it all just stopped, and it seemed like they'd let it go.

Then recently the Hessonite letters started. They are demanding payment, and say a ‘field agent’ will be visiting us soon to 'discuss my financial circumstances'. They say within 14 days of the letter, and have sent it via the slowest RM service, so despite only just receiving the letter, this could be in as little as 4 days’ time.

My layman's understanding is that there is a 12 year statute of limitation on them recovering the debt, which if taken from when my mortgage was settled in Apr 2012, I'm already clear of. However, the advice from the National Debtline is that the 12 years may have started from when the Ombudsman closed the case, in which case the 12 year period may be valid to as late as Dec 2025.

I'm getting advice from various channels as to what to do (and I'm planning to visit Citizen's Advice on Monday) but I wonder whether anyone else has experience of this rather niche scenario, or something similar? I have seen cases in the context of a house being repossessed, which isn't what has happened here. If it is that they are going to come after me for the next 1.5 years, that could be tricky to keep kicking against - equally if it's all hot air and unlikely they'll pursue this further as it's just for £1,000, I'm wondering whether to keep ignoring and see what happens.

Look forward to hearing any advice or experience of this that can be shared! Thanks guys :-)

Hoenir

mutterances said:

For some strange reason, in the process of changing mortgage provider I was refunded the final mortgage payment I'd made to NRAM (approx £1,000). I then also discovered that NRAM had not been charging me the correct monthly amount, causing me to pay more interest (and in theory, if the mortgage had run its full 30 years, it wouldn't have sufficiently paid it off at the end).

Not strange at all. When remortgaging there's often timing dfferences in the crossover. Direct debits having to be be set up 10 days in advance of the payment date. 

Majority of NRAM mortgages were on an interest only basis. Was yours? Where the interest rate does change then the monthly payment will be revised accordingly at some point of time. Extrapolating over 30 years has no substance. 

BarelySentientAI

mutterances said:

My layman's understanding is that there is a 12 year statute of limitation on them recovering the debt

I thought that meant the start of the process of recovering the debt - the demand - not actually receiving the money.  Otherwise everyone could just get their debts written off by hiding from letters for long enough.

I could be completely wrong about that though. 

silvercar

I’d be careful about contacting anyone and acknowledging the debt, it could start the clock again! Hessonsite could have bought the debts for pennies in the pound and just be trying their luck. Hessonite bought the mortgage book off NRAM which ceased to exist in 2023.

I thought secured debt was 12 years, unsecured is 6 years. At the point your debt was created I’m not sure if it was still secured.

mutterances

silvercar said:

I’d be careful about contacting anyone and acknowledging the debt, it could start the clock again! Hessonsite could have bought the debts for pennies in the pound and just be trying their luck.

I thought secured debt was 12 years, unsecured is 6 years. At the point your debt was created I’m not sure if it was still secured.

Thanks @silvercar! Sorry, in the interests of keeping my post as short as I could I didn't mentioned I won't be in anyway acknowledging the debt. I don't even wish to contact the Ombudsman to verify when my case was closed just in case that complicates things.

Your second point is extremely useful, I hadn't thought of it this way. So is your thinking that because I was transferring my mortgage away from NRAM in 2012, that final payment that was returned may have been transferred from a secured debt to an unsecured debt because it was no longer associated with an active mortgage held with NRAM?

Many thanks!

silvercar

mutterances said:

silvercar said:

I’d be careful about contacting anyone and acknowledging the debt, it could start the clock again! Hessonsite could have bought the debts for pennies in the pound and just be trying their luck.

I thought secured debt was 12 years, unsecured is 6 years. At the point your debt was created I’m not sure if it was still secured.

Thanks @silvercar! Sorry, in the interests of keeping my post as short as I could I didn't mentioned I won't be in anyway acknowledging the debt. I don't even wish to contact the Ombudsman to verify when my case was closed just in case that complicates things.

Your second point is extremely useful, I hadn't thought of it this way. So is your thinking that because I was transferring my mortgage away from NRAM in 2012, that final payment that was returned may have been transferred from a secured debt to an unsecured debt because it was no longer associated with an active mortgage held with NRAM?

Many thanks!

Once the mortgage is redeemed any debt from it becomes unsecured borrowing. So from that date I would think the debt is unsecured.

silvercar

I’ve done some digging online. Hessonite took over all mortgages from NRAM who ceased to be towards the end of last year. https://nram.co.uk/

So it appears your mortgage account was never closed and the amount outstanding remained as a live (or dormant, but not written off) debt. Hessonite are probably tidying up the books. It may be just in the hope that some money comes in without much effort on their part, or it may be in an attempt to collect money owed.

In any case the statute of limitations is 12 years on the main mortgage debt and 6 years on the interest. You were in dispute over the interest payment, as you redeemed the mortgage in 2012, so that would have cleared the main mortgage, so I would say they are well out of time.

mutterances

@silvercar - cracking. I'll raise this possibility with Citizen's Advice on Monday, but I think my strategy will be to continue to ignore any letters. If a 'Field Agent' does turn up (I think it's unlikely) they will be sent on their way regardless! Thanks for your input, much appreciated :-)

mutterances

@silvercar - sorry, our messages crossed over. Yes indeed, NRAM were acquired by Hessonite, and I share your view that more than likely they are simply trying their luck to see if they can scare a few folk into an easy payment. I imagine there are hundreds, if not thousands, of cases like ours, many of which may involve a lot more money, and I can't think we're going to be a priority to pursue, even if Hessonite are pursuing the odd case.

On a technicality though, my main concern is what the National Debtline advice given to us was, that the statue of limitations, at the extreme the 12 years, might have only started when my case with the Ombudsman was closed. As this likely didn't happen until late 2013, if this were the case that might be within the 12 year bracket by up to a year and half. If you're right about the debt having become unsecured, then any claim on their part essentially would have run out in late 2019, even if Ombudsman dates are relevant.

Really appreciate you digging into this further for me - and I will be sure to report back in the future how things rolled!