NRAM Class Action on redress method.

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  • cot1198
    cot1198 Posts: 334 Forumite
    lennonc1 wrote: »
    Ok I now have an appointment with my mp on 15th as am sure he is labour he will take great pleasure in brining this up in parliament!! Need to get info together now. If you have anything you want included please pm me as I am pretty rubbish at this kind of thing!

    One thing I thought of was what percentage of the £270m will be paid out in the form of direct payment to ex NRAM customers. As NRAM need to pay customers who have re payed their loans directly what would that take off the £270m. What I'm trying to say is £270m is not the real figure due back to existing customers.
  • lennonc1
    lennonc1 Posts: 276 Forumite
    Well from what I've heard from customers there is no money being redressed just say 5 years reduced of term which will be approx same amount of interest taken during non compliance. So that money is lost in 20 years not now! I for one won't be keeping it that long, so if I go to sell the amount of loan is same just shorter term, so I still owe the same, is that right!! If so not on at all! Even more reason to get them now!
  • DevCoder
    DevCoder Posts: 3,361
    First Anniversary First Post Combo Breaker
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    If they have reduced the term then you owe less, the only difference is that as opposed to reducing the repayment inflation has a small bearing.
  • cot1198
    cot1198 Posts: 334 Forumite
    I don't think so. Say the amount you needed to pay off your loan today would be 10,000. Then NRAM apply the redress of say 3,000 tomorrow. The amount you would need to pay off your loan would then be £7,000. The redress amount is lost to the taxpayer whenever the loan is repaid if that be next week or in 20 years. The way NRAM are wanting to do this saves you X amount of years of payments at the end of the loan period IF the loan runs for the full term. So what they are saying is for those X amount of years you are not paying your monthly amount you are saving, you just need to wait 15 years to do so.
  • DevCoder
    DevCoder Posts: 3,361
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    You can also make a provision or write off the redress amounts up front.

    I'll have to check my IFRS/GAAP book to see what is considered norms.
  • lennonc1
    lennonc1 Posts: 276 Forumite
    krisdorey wrote: »
    You can also make a provision or write off the redress amounts up front.

    I'll have to check my IFRS/GAAP book to see what is considered norms.

    Can you explain please, think I'm still half asleep, not well baby = no sleep!!!
  • In an attempt to demonstrate your basic and continued folly in wanting this money back as cash now now now, I have put together a very simple Spreadsheet to demonstrate how the application of redress affects your account in the long term.

    I have used generic figures, conflated the unsecured loan with the main mortgage (which in most cases are on identical terms, and so can be considered 'as one'), and assumed the interest rate won't ever change throughout life of the account. It's good enough for an illustration.

    The 'Additional Balance Paid' in column F4 represents the application of the redress to your balance today. Remove it or set it to 0 to see how the figures change over time.

    Basically you can see that £2500 taken off your account today means your mortgage would finish just over a year early. In other words you save £4776 in interest and £7274 OVERALL.

    This saving is admittedly lessened with a smaller loan of £10-15k (but by turns, the term is also much more reduced) but the principle is identical. Redress applied by shorterning the term is the best thing for you. This spreadsheet also demonstrates the benefits of overpaying even small amounts. Over time it'll dramatically reduce your term and save you lots of money. Think about it!
  • lennonc1
    lennonc1 Posts: 276 Forumite
    I know all this, but I do not plan to keep my house much longer. I will sell ASAP. I have a tiny one bedroom house and now with a new baby can't possibly live here anymore.
    I don't want the money, now now now! That won't happen, but I DO want to know my rights and a choice in the matter.
    I understand it makes financial sense to accept redress on loan, and if my circumstances were different I would. It comes down to what the individuals needs are, not a bank to decide.
  • cot1198
    cot1198 Posts: 334 Forumite
    In an attempt to demonstrate your basic and continued folly in wanting this money back as cash now now now, I have put together a very simple Spreadsheet to demonstrate how the application of redress affects your account in the long term.

    I have used generic figures, conflated the unsecured loan with the main mortgage (which in most cases are on identical terms, and so can be considered 'as one'), and assumed the interest rate won't ever change throughout life of the account. It's good enough for an illustration.

    The 'Additional Balance Paid' in column F4 represents the application of the redress to your balance today. Remove it or set it to 0 to see how the figures change over time.

    Basically you can see that £2500 taken off your account today means your mortgage would finish just over a year early. In other words you save £4776 in interest and £7274 OVERALL.

    This saving is admittedly lessened with a smaller loan of £10-15k (but by turns, the term is also much more reduced) but the principle is identical. Redress applied by shorterning the term is the best thing for you. This spreadsheet also demonstrates the benefits of overpaying even small amounts. Over time it'll dramatically reduce your term and save you lots of money. Think about it!

    I can not speak for others but I for one am fully aware of the amount of money I could save over the term of the loan by shortening that term. The question is, is this method right for me at this moment in time not in 15 years, the answer is no BTW.

    Anyway this thread was not created to have an argument about if we should be asking questions, or having a debate on the financial impact on ourselves or the country. It was created so all those who would like a choice in the matter could have a thread where they could discuss this issue.
  • cot1198
    cot1198 Posts: 334 Forumite
    In an attempt to demonstrate your basic and continued folly in wanting this money back as cash now now now, I have put together a very simple Spreadsheet to demonstrate how the application of redress affects your account in the long term.

    I have used generic figures, conflated the unsecured loan with the main mortgage (which in most cases are on identical terms, and so can be considered 'as one'), and assumed the interest rate won't ever change throughout life of the account. It's good enough for an illustration.

    The 'Additional Balance Paid' in column F4 represents the application of the redress to your balance today. Remove it or set it to 0 to see how the figures change over time.

    Basically you can see that £2500 taken off your account today means your mortgage would finish just over a year early. In other words you save £4776 in interest and £7274 OVERALL.

    This saving is admittedly lessened with a smaller loan of £10-15k (but by turns, the term is also much more reduced) but the principle is identical. Redress applied by shorterning the term is the best thing for you. This spreadsheet also demonstrates the benefits of overpaying even small amounts. Over time it'll dramatically reduce your term and save you lots of money. Think about it!

    If the Government/Council wanted to to build say a prison or office block on land where your house is and they served you with a compulsory purchase order offering you well in excess of the market value of your home. Would you just accept this as it made financial sense, or would you fight for your right of choice to stay in your home? Because some decisions do not come down to a balance sheet, they are personal to the individual.
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