Bank Error on Mortgage - They want money NOW

mockingjay

Our Bank has just informed us that they had been charging us the wrong interest rate since 2008 - we thought we were on a tracker (interest only) and they want to have us on over 4% since then - the letter was very scary - but they want a massive, massive lump sum within 30 days or God knows what -of course we don't have it, sick with worry. Found my contract it says interest only but underneath says the 4.5% etc, can't make sense of it & have been playing the interest only rate with no problems for almost six years, anyone know what's going on?

socco

mockingjay wrote: »

Our Bank has just informed us that they had been charging us the wrong interest rate since 2008 - we thought we were on a tracker (interest only) and they want to have us on over 4% since then - the letter was very scary - but they want a massive, massive lump sum within 30 days or God knows what -of course we don't have it, sick with worry. Found my contract it says interest only but underneath says the 4.5% etc, can't make sense of it & have been playing the interest only rate with no problems for almost six years, anyone know what's going on?

Contact the bank and discuss it with them. Don't feel under pressure to pay it all off up front as it is their mistake. However if the money is owed then you should repayment it however offer to do so by making them a realistic repayment plan to repay the money owed spread over a period of time.

Liam D Ferguson

From what you're posting it doesn't sound like the bank is being terribly apologetic about their error. I'd be inclined to write back to them along the lines of: -

• What assurances can they give you that this mistake won't happen again?
• What compensation are they offering you for the inconvenience?
• You have neither the ability nor the wish to correct their mistake with a lump sum. However, if they answer the above two queries to your satisfaction, you will be willing to enter into negotiations with them about paying back the underpayments over a period of, say, 20 years.
• If they do not come up with a satisfactory reply, you reserve the right to take a complaint to the Financial Services Ombudsman.

That should cool their heels a little...:p

chris85

Liam D Ferguson wrote: »

From what you're posting it doesn't sound like the bank is being terribly apologetic about their error. I'd be inclined to write back to them along the lines of: -

• What assurances can they give you that this mistake won't happen again?
• What compensation are they offering you for the inconvenience?
• You have neither the ability nor the wish to correct their mistake with a lump sum. However, if they answer the above two queries to your satisfaction, you will be willing to enter into negotiations with them about paying back the underpayments over a period of, say, 20 years.
• If they do not come up with a satisfactory reply, you reserve the right to take a complaint to the Financial Services Ombudsman.

That should cool their heels a little...:p

This sounds like a good plan to follow. Realistically if it's owing it will have to be paid but ultimately it may have to be restructured into the remaining term of the mortgage.

_ciaran_

If you get on to them they will work out a way for you to pay the money back over a reasonable timeframe at a level you can afford.

They will not compensate you for the inconvenience and a complaint to the ombundsman will do very little as this is widespread over the past couple of years.

I used to work in the mortgage department of one of the main Irish banks and this was so common that there was (possibly still is) a restitution team who's sole function was to identify cases like this and work out payment plans with the customers.

Their argument of course will be that you should have been aware of the terms of the loan agreement that you signed and you never spoke up when the interest only period failed to expire. If they say this jusy ask them why they didn't spot it.

Liam D Ferguson

_ciaran_ wrote: »

If you get on to them they will work out a way for you to pay the money back over a reasonable timeframe at a level you can afford.

They will not compensate you for the inconvenience and a complaint to the ombundsman will do very little as this is widespread over the past couple of years.

I agree but I think it's worth making a formal complaint, which has to be dealt with by the bank's complaints procedure, rather than simply accepting a "scary" letter and being "sick with worry", as the original post says. At the very least it should get the bank to acknowledge some level of partial responsibility for the error and come up with a more reasonable suggestion than to pay everything in one lump sum within 30 days.

Rua1

We had something similar happen a few years back. The mortgage was originally on a discounted tracker for a year or two after my now husband bought the place. The bank forgot to increase the rate after this, so we got a letter from the bank after a good few months saying they were going to add this extra money onto the principal. I think someone else must have complained, and they eventually offered the option of paying off the extra over a year, I think, interest free, which we took. I'd definitely complain about that, sounds very heavy handed.

mockingjay

Yes, it has added up to a hefty six figure sum, so on top of now doubling our repayments we have this as well. Fixed up house over the past five years & spent money we thought we had - this will probably have us selling our home - it's just such a shock!

themoneyguy

If you have been paying the loan by direct debit for the last number of years then the Bank have bit of a problem. If THEY have been charging you the wrong rate then ultimately its their problem. They should and will accept most of the cost here , especially if it is pursued through the ombudsman.

If you have been paying by standing order or something and have been choosing to pay a repayment that wasnt in the contract then you could have a problem

Best of luck

skippy2

If you have any savings with this bank move them immediately as they have the right to take money from your bank account if it is owing to them

_ciaran_

skippy2 wrote: »

If you have any savings with this bank move them immediately as they have the right to take money from your bank account if it is owing to them

I don't think that's correct. They would only have the right to take savings if the OP had signed a letter of lien to that effect AFAIK

mockingjay

Thank you all for your replies but after an extremely stressful and sleepless fortnight we have resolved the issue. I pulled the house apart and found our loan agreement (this was very important) and any other correspondence we had. We then went to an amazing solicitor who deals with property law, he looked over our contract and confirmed we were on an interest only tracker, then he rang the bank on our behalf, they were dying to know who he was and have now confirmed that the letter was an error on their behalf as they were reviewing 'all' their files, we have asked that they now rectify their error in writing. This was an appalling error on their behalf as the were looking for over €100k, and trying to get us to add it onto our mortgage at an appalling new rate - I don't think you would believe the turmoil they put our family through but to them it was the flick of a pen - we are disgusted - but still have no apology to us - just talking the talk to our solicitor, who very kindly didn't charge us because he has come across this problem before - my advice is - get legal advice and don't sign any of their supposed 'kind offers' to help you out of hour debt (trackers!) - great nights sleep last night:)

rameire

good to hear you got the issue resolved.
you need to write a formal complaint and send it to their mortgage department.
send it by registered letter.

as an aside, im sure you know this, but you do realise you will have to pay off the total loan amount at the end of the term, so it would be an idea to start saving now, or start putting lump sums off the mortgage when you can afford it.

mockingjay

Thanks Ramiere, yes aware of this, but at least it's a few years breathing space and hopefully it will have increased in value rather than selling now with a deficit, by the time we're out of the deal we'll probably be downsizing again! better position than many I suppose.

Padraig Mor

I'm guessing the OP was with Ulster Bank?

http://www.independent.ie/business/personal-finance/property-mortgages/ulster-bank-tells-customers-they-must-repay-30000-after-mortgage-error-29096823.html

Sam_89

Would you be able to pass your solicitors details to me (PM) as I too am now in a very similar situation and the bank wont negotiate with regards to making a resolution, they say we are too old to extend the term of our mortgage, and honestly we cannot afford to increase the monthly payments, as it is nearly double what we are paying now, they are also offering an interest free loan but this is also going to be double what we can afford to pay at present including our monthly payments already. Also the bank wont talk to us to try come to some agreements unless we sign their letter agreeing to one method of payment. We cannot sign something which we know we cannot afford to commit to, and dont want to default, but until we sign they wont deal with us... I would greatly appreciate any advice on this matter.

namloc1980

_ciaran_ wrote: »

I don't think that's correct. They would only have the right to take savings if the OP had signed a letter of lien to that effect AFAIK

All the bank have a right of set off in their basic terms and conditions.

MMAGirl

Post a stone to their head office and tell them when they get blood out of it to post it back to you and then you will pay them.