Unfair terms in Mortgage Contracts?

[johndeevoy]

I'll try and keep this brief. Basically, my mum went into arrears on her mortgage payments (interest only) because her income support was stopped. It was a very complex legal matter which took over a year to resolve but finally she won and her benefits (including the mortgage interest) were backdated.

 

In the meantime, my mum had notified her lender of the legal appeal against the benefit decision and offered a reduced monthly payment until the matter was resolved. This meant that the mortgage account would be in arrears until such time. This was agreed but my mum was still struggling financially resulting in her making a payment ONE DAY LATE.

 

Her lender took her to Court for repossession over this 'breach of the payment agreement'. The Master hearing the case expressed his disgust at their actions but said that his hands were tied in respect of making an Order as there were arrears he could not dismiss the application. The Order for repossession was granted but stayed on the basis that my mum was to continue with the payments as per the terms already agreed with the lender (the terms that she breached by only one day in respect of a payment of 30 pounds). The Master recommended that my mum pursue a complaint to the Financial Ombudsman.

 

My mums lender then added over 1,000 pounds in legal and 'administration' costs (including two 'admin' costs of 129 pounds each) to her mortgage account over these Court proceedings. The actual Court Order is silent on the issue of costs.

 

I have since found out that the legal position is that a mortgage lender is entitled to these costs under the terms of all mortgage contracts which state the borrower will pay 'any costs or expenses whatsoever incurred' by the lender in respect of acting to secure their sureity on the property. Recent legal texts also advise that the lender does not need to specifically apply for costs nor costs specifically awarded by the Court as the lender is entitled under said contractual provision.

 

I am also advised that the Unfair Terms in Consumer Contracts 1999 do not apply to mortage contracts and that there are no specific similar Regulations that do apply to mortgage contracts.

 

Essentially, mortgage lenders can take you to Court if you enter into any arrears whatsoever and can then charge you (based on their standard contractual small print) the legal fees incurred and alarmingly high 'adminstrative costs' no matter how unfair or unreasonable their legal action e.g. payment missed by one day.

 

While legally there seems to be no recourse for this based on contract law or based on the issue of 'legal costs following the event', but can anyone point me to any other regulations or guidelines that the lender may have broken by acting in such an unreasonable manner? I wish to challenge the lenders actions here or even challenge the 'all costs whatsoever' clause.

[Guest Old_andrew2018]

Bump

[johndeevoy]

Surely there has to be some regulation of mortgage lenders, their contracts and practices? I mean, if they all decided to put clauses in their contracts saying you will hand over your first born son....

[johndeevoy]

bump

[sequenci]

I am also advised that the Unfair Terms in Consumer Contracts 1999 do not apply to mortage contracts and that there are no specific similar Regulations that do apply to mortgage contracts.

 

Where did you get that information from?

 

I'm no expert but I thought they would be?

[johndeevoy]

I represented my mother in a small claim against her mortgage provider in relation to the fees that they added to her account. I intended to use the Unfair Terms regulations to hammer that provision in the mortgage contract that says 'all expenses whatsoever incurred' but the solicitor for the other side said that the Unfair Terms in Consumer Contracts do not apply to mortgage contracts. I would have questioned him why he thinks that but the Judge agreed with him. I didn't want to start questioning the Judge. The Judge was sympathetic to our case, even going as far as to say that he has tried every angle to assist us as he did not think that what the provider did was morally correct but that, in law, they are contractually entitled to their costs.

 

I mean, surely someone has to govern what mortgage providers put in the small print of their contracts? Or can they just put whatever they like in there and if you dont like it you can just rent forever....

[johndeevoy]

I am not quite sure which section to post this in so admin can move it if it should belong somewhere else.

 

I own a residential property with a small mortgage on it of around 18k. Myself and my partner wish to buy a new home for us to live in and let out the existing property. I have one default on my credit file which I am currently fighting to have removed (legal proceedings issued).

 

After receiving a rejection from an online mortgage provider due to "adverse credit" I went to my local bank who I have banked with for over 20 years to explain the situation, I need two mortgage products, a buy-to-let for my existing property of around 25k to release 7k to go towards a deposit on the new home, a joint residential mortgage for my partner and I.

 

The bank phoned me today and said that it was not possible for me to release equity from an existing property to be used as a deposit on a new home. I queried this saying that I never heard anything like this and asked if I could release equity for a deposit on another buy-to-let and they said YES.

 

I really do not understand their stance and I would welcome advise from CAG members - is this standard practise or is someone at my bank clueless? I really do not see why they would allow equity release to go towards a BTL but not a new home.

 

Also, because my mortgage on the existing home is so low at 18k, I NEED to take some equity out for a re-mortgage as most providers will not provide a mortgage for under 25k. I feel stuck at present - any advice most welcome.

[theoldrouge]

talk to a reliable broker about let to buy

 

http://www.thisismoney.co.uk/money/mortgageshome/article-2914608/Are-moving-house-don-t-want-sell-try-let-buy.html