Legality of a mortgage contract?

Molly Dear

I would be very obliged if there is anyone with the expertise to offer me advice on a serious problem which we have regarding a mortgage contract.
We switched mortgage provider in 2009. We got a mortgage offer through a mortgage broker which we accepted and he was well aware of the terms and conditions we already had because he had got it for us.
The day we signed with the solicitor, the contract did not arrived. Our solicitor had been waiting all morning for the courier to arrive with the mortgage contract. The signature page had arrived by fax but the terms and conditions didn’t. Tiring of waiting, our solicitor asked me what the terms and conditions were on this new mortgage and I told him. The term was 11 years interest only. We had accepted this from the broker over the telephone. The bank had never dealt with us directly and they didn’t send us any documentation whatsoever. Our solicitor allowed us to sign in good faith on the basis that we could trust the bank and broker in question as he had previous dealings with both.
Three years later, to our surprise to put it mildly, the bank informed us that we now had to pay off the capital in addition to interest because the terms and conditions were for 3 years interest only! They demanded full monthly payments off the capital. We had understood that we had 11 years interest only. Since then we have investigated what had happened. We understood that we had accepted the loan offer on the basis of an 11 year interest only term and we actually gave up a superior interest only term of 16 years for a lower interest rate but we had been completely misled. Our solicitor and the broker claim that they can’t remember any of this now after 3 years and our solicitor never took a photocopy of the document we signed. It also cost us a couple of thousand to switch and the broker got a commission from the bank.
We have continued to pay interest only for the last 20 months. We have acquired three 6 month interest only extensions with difficulty, and we have now put in another request with a financial statement. In the meantime this bank is on our case with demanding and unsigned inaccurate letters from their arrears unit and also phone calls trying to cause us as much stress as possible.
I continue to request interest only terms for the term that we understood we had and I have also made many requests to have sight of the original fax that we signed and the rest of the original contract and they never reply to us on this. They have sent us unsolicited photocopies of the mortgage contract which misrepresents the original fax. Details such as time and date are being excluded from the photocopy of the fax that we signed, disguising the fact that it is a fax and making it appear to match a photocopy of the rest of the contract which was never actually posted or faxed at the time. I have explained this to them many times and reminded them in writing on numerous occasions that they only have one faxed page which is a signed fax of the signature page, as the terms and conditions were separated and never sent and they have no matching fax of the terms and conditions. I have asked them if they have evidence to the contrary to give us sight of this in their offices, but they never reply to this.
Their own internal “Disbursement” document pages on which the cheque is signed off by them, clearly states the term to be 11 years interest only. Where did they get that figure from if we are mistaken and why is it in their final document?
As far as I am now aware, the pages of a mortgage contract should not be separated. We signed a fax of the signature page in good faith without the accompanying terms and conditions under the guidance of our solicitor whom we had known for over 30 years and neither he, nor we, suspected that there could be any kind of a scam in play.
Can this bank actually move to repossess our home based on what they have? We are up to date with our mortgage interest but we cannot make the full payments off the capital that they are insisting upon. Why would we have knowingly given up a more favourable contract for an inferior one if we had not been misled? Has anyone ever heard of this happening to other people and was it ever resolved? Can anyone offer me any advice on this?

davo10

Where is your solicitor in all this? Does he not have a copy of the page you signed?

Did you not ever receive the rest of the contract which was supposed to come the day you signed it and if you did, what does it say?

If you didn't ever receive the test of the contract, how can the bank bind you to that agreement?

Did you not receive an offer/confirmation letter from the bank outlining the main details prior to contract being signed?

I'm staggered that a solicitor allowed you to sign such an important document in his office without first seeing what you were agreeing to. Eleven year interest only is not your run of the mill mortgage, the interest rate would be very high, the capital repayments over the remaining term after 11 years interest only must be absolutely astronomical and the penalty for early exit if you sold the property before the end of the 11 year agreement would be punitive.

A lot if this just doesn't add up from the duration if the interest only, the actions of your solicitor, the bank not supplying a contract etc, is this a "sub prime" lender?

The_Conductor

A contract is a legally binding document.
You're really seeking (and need) legal advice.
Unfortunately, we are not allowed to facilitate discussions which offer legal advice.
Accordingly- and with regret- I have to seriously suggest you contact a solicitor who specialises in contract law.

Thread closed.