Help, being charged redem but not redeeming!

[Greenstuff]

Hi,

 

I still haven't received a reply at all from First National, I have

sent all letters recorded and checked that they have all been

signed for which they have.

Below is the last letter sent.

 

I am getting really nervous as we are looking to move in about 3

weeks and as you can see they are charging 2 lots of ERC's

totalling a whopping sum which we simply do not have so am getting

in a panic as to where we are going to get it from and how much in

debt it will put us and interest it will cost us.

I am thinking of this approach, would you please advise?

Thanks again, your help is very much apprecated

 

Dear Sir/Madam,

 

I'm sorry that you have chosen to ignore my past letters about this

very important matter.

I have notified the FSA of your failure to comply with their

guidelines.

 

As detailed in my letters dated 18th August 2006, 23rd August 2006

and 12th September 2006 and we believe your intended penalty of

£5,492.12 to be an unlawful charge.

AS we are moving house the Mortgage we have with you will be

redeemed, as you refuse to enter into a dialogue with me I have no

choice to notify my solicitor of the same.

I will in 7 days notify her that this amount is in dispute, provide

her with details of our letters sent to you, proof that they were

received by you and subsequently ignored, and so instructing her

not to release the penalty amount to you.

 

If you believe this charge to be lawful you will then have to claim

the amount from her, I have to inform you that once I instruct her

of the above this will become a separate matter and is likely to

incur legal costs, of which her's are £100 per hour.

You will of course be liable for these should your claim to the

penalty be unsuccessful.

 

I would strongly advise you to take this matter up with me as a

matter of urgency before this becomes the case.

 

My solicitor's details are

xxxxxxxxx

xxxxxx

xxxx

 

Yours,

Greenstuff

[Greenstuff]

> Dear Sirs,

>

>

>

>

> After consultation with the FSA please be advised that you have a 5

> day period from the date above in which to reply to this letter,

> and a total of 8 weeks from the date of this letter to resolve the

> matter.

>

>

> I'm sorry that you have not replied to our letter dated 18th August

> 2006, we have however received your settlement figure letter of

> 17thAugust stating that we would be charged a fee of £3,010.94 as

> an early redemption penalty, and £2,481.18 'Funding Fee'. It did

> state that if we took out another mortgage with you the fee would

> be waived or reduced, but unfortunately we were told by Messrs

> Itash, Isaac and Colin James on the phone that we would be charged

> this fee even if we did take out another Mortgage with yourselves.

> Our Mortgage advisor was also told this by an area Manager.

>

>

> We were sorry that you did not value our custom enough to want us

> to stay with you as we have always felt we have had a good

> relationship with you, but based on the facts we were given at the

> time we have now taken out a Mortgage elsewhere with better rates

> and terms. We are now requesting that you waive the Early

> Redemption Charge and Funding Fee, as it will put us into debt for

> which we will have to pay interest and it is in any event an

> unlawful charge.

>

>

> In the case of Castaneda and Others v. Clydebank Engineering and

> Shipbuilding Co., Ltd. (1904) 12 SLT 498 the House of Lords held

> that a contractual party can only recover damages for actual or

> liquidated losses incurred from a breach of contract as oppose to a

> charge which represents a penalty. This law was confirmed and

> upheld in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co

> Ltd [1915] AC 79. A charge will be held to be a penalty if the sum

> stipulated for is extravagant and unconscionable in amount in

> comparison to the greatest loss that could conceivably be proved to

> have followed from the breach. A penalty clause is void in its

> entirety and unenforceable.

>

>

>

> In addition the early redemption charge appears to represent an

> unfair term of contract which is contrary to the Unfair Terms in

> Consumer Contracts Regulations 1999 (SI. 1999/2083). Our account

> falls within the ambit of Regulation 5 of the Unfair Terms in

> Consumer Contracts Regulations 1999 as we are consumers. Your

> charge constitutes an unfair penalty under Schedule 2 of the said

> Regulations which provide an indicative and non-exhaustive list of

> terms which may be regarded as unfair. Under paragraph 1(e) of

> schedule 2 this specifically includes terms which have the object

> of requiring any consumer who fails his obligation to pay a

> disproportionately high sum in compensation. We would vigorously

> contend that this is the position regarding the redemption fee of

> £3,010.94. and Funding Fee of £2,481.18, total £5492.12.

>

>

> Furthermore a fee levied requiring us to indemnify you against any

> commercial risk to yourself in offering us a reduced interest rate

> in order to attract our custom is also contrary to s.4 Unfair

> Contract Terms Act 1977. We are confident that a court is likely to

> consider this clause to be unreasonable within s.11 of the said Act

> as a large commercial institution such as yourselves is in a far

> better placed position than us as consumers to bear the burden of

> the vicissitudes of business.

>

>

> I would like to bring your attention to the following statement by

> The Office of Fair Trading:

>

>

> "A term in a mortgage agreement which requires the borrower to pay

> more for breaching the contract terms than actual costs and losses

> caused to the lender by the breach (or a genuine pre-estimate of

> that) is likely to be regarded as an unfair penalty and to be

> unenforceable both at common law and (in a consumer mortgage) under

> the Unfair Terms in Consumer Contracts Regulations. A redemption

> charge may be regarded as a penalty even if it is expressed as the

> price for exercising a right rather than a consequence of breaking

> the agreement."

>

>

> We believe that the charge you intend to apply far exceeds any true

> cost to yourself as a result of our breach in terminating the

> contract early and any genuine pre-estimate you could conceivably

> reach. If you disagree, then will you please demonstrate this by

> letting me have a full breakdown of the costs to which you will

> incur as a result of our early termination, in order to reassure us

> that your charges really do reflect your costs.

>

>

> In addition:

>

> we did not actually want to redeem but our hand was forced by the

> information given.

> we understand ERC are put in place to stop people taking advantage

> of low interest rates, but your rates are not the lowest at the

> moment and have not been for a while.

> the term that the fee relates to was 5 years and there is less than

> 2 to run so we feel it unfair to be charged for that whole term.

> The 'Funding Fee' is, we feel, an additional Early Redemption

> Charge, this is in itself totally unfair.

> We have been excellent customers of yours for almost three years

> now and so you have already had tens of thousands of pounds in

> interest from us.

>

> We would like to draw to your attention that if we pay these fees

> we fully intend to claim them back. You will thus be put to

> additional costs, as if necessary we will pursue this claim through

> the courts where there will be further interest added as well as

> court fees and possible legal fees, so would ask that you simply

> waive the fee now to prevent yourselves from further expense and

> inconvenience.

>

> Yours faithfully,