Mortgage Company allegedly dictating spending
Mortgage Company allegedly dictating spending
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Discussion

Hyper10

Original Poster:

432 posts

185 months

Wednesday 31st August 2011
quotequote all
I read an article in Telegraph today where it said that Banks will be calling the most exposed customers asking them how when interest rates rise, they intend to service the debt.
About 6 months ago, we had a customer service call from Alliance and Leicester almost along these lines. I listened for a short while and then without responding to the question, suggested they put the query in writing. I never have had a response. To clarify in 9 years we've never missed a payment
This got me to thinking a few things
1) Can a mortgage company insist you pay the mortgage off early
2) Is this a way of them trying to sell their own products.
It seems Banks are being squeezed for profit and maybe they're looking to get weaker mortgagees off their books. If any of this is actually true then it is a worrying turn as who wants to be dictated to if you are meeting your commitments

surfymark

895 posts

247 months

Wednesday 31st August 2011
quotequote all
Hyper10 said:
I read an article in Telegraph today where it said that Banks will be calling the most exposed customers asking them how when interest rates rise, they intend to service the debt.
About 6 months ago, we had a customer service call from Alliance and Leicester almost along these lines. I listened for a short while and then without responding to the question, suggested they put the query in writing. I never have had a response. To clarify in 9 years we've never missed a payment
This got me to thinking a few things
1) Can a mortgage company insist you pay the mortgage off early
2) Is this a way of them trying to sell their own products.
It seems Banks are being squeezed for profit and maybe they're looking to get weaker mortgagees off their books. If any of this is actually true then it is a worrying turn as who wants to be dictated to if you are meeting your commitments
Basically Yes and Yes.

They are perfectly entitled to insist you pay off the balance any time they like. However it is unlikely they would move to repossess at that point as it is a pain to them to do this.

What would be better for them would be to lock you down into a different product for as long as possible putting you in a "Good Loan" scenario rather than "Bad Loan".

M

Soovy

35,829 posts

287 months

Wednesday 31st August 2011
quotequote all
Hyper10 said:
I read an article in Telegraph today where it said that Banks will be calling the most exposed customers asking them how when interest rates rise, they intend to service the debt.
About 6 months ago, we had a customer service call from Alliance and Leicester almost along these lines. I listened for a short while and then without responding to the question, suggested they put the query in writing. I never have had a response. To clarify in 9 years we've never missed a payment
This got me to thinking a few things
1) Can a mortgage company insist you pay the mortgage off early
2) Is this a way of them trying to sell their own products.
It seems Banks are being squeezed for profit and maybe they're looking to get weaker mortgagees off their books. If any of this is actually true then it is a worrying turn as who wants to be dictated to if you are meeting your commitments
Did yu read your mortgage contract at all?

They can 100% call the loan in any time they like.


Rude-boy

22,227 posts

249 months

Wednesday 31st August 2011
quotequote all
If it helps you understand that balance of power with mortgages I was due to complete on a matter today and yesterday at 4pm got a call from the lender to return the funds (I always get them a day early to avoid issues..).

The Client had done nothing wrong.

There was nothing wrong with my Certificate of Title or the Title to the property at all.

The lender's valuer had missed that the Property had a garage when they looked around and Client had brought that to the lender's attention over 4 weeks ago. On final checking someone at the lender decided that they needed a fresh valuation and pulled the offer with less than 2 working hours to completion.

As it happened the facts of the matter in hand meant that it hasn't caused any real issues but if this had been a mortgage for a First Time Buyer at the head of a chain of 8 or more Properties my client could have been £1,000's out of pocket through no fault of their own.

eztiger

836 posts

196 months

Wednesday 31st August 2011
quotequote all
You *may* find if they're desperate to get you off their books they may offer you a discount on the amount outstanding - should you settle it within a time frame either by forking out yourself or by remortgaging elsewhere.

This isn't as unlikely as it sounds wink

Hyper10

Original Poster:

432 posts

185 months

Wednesday 31st August 2011
quotequote all
Thanks for the replies. As for reading the document no but then I've been with A+L since 1996 and never had a problem. Ah well 11 more years to go but it is an interesting scenario. Theoretically if all mortgages were called at once, this could be detrimental to the economy

Mattt

16,664 posts

234 months

Wednesday 31st August 2011
quotequote all
Soovy said:
Did yu read your mortgage contract at all?

They can 100% call the loan in any time they like.
Presumably not during a fixed rate period (without penalties on their side)?

Rude-boy

22,227 posts

249 months

Wednesday 31st August 2011
quotequote all
eztiger said:
You *may* find if they're desperate to get you off their books they may offer you a discount on the amount outstanding - should you settle it within a time frame either by forking out yourself or by remortgaging elsewhere.

This isn't as unlikely as it sounds wink
yes

I have a client who they were so pleased to get off their books they settled for only a 75% redemption.

caymanjames

2,971 posts

174 months

Wednesday 31st August 2011
quotequote all
any tips on how to become one of these clients??

Rude-boy

22,227 posts

249 months

Wednesday 31st August 2011
quotequote all
caymanjames said:
any tips on how to become one of these clients??
Have a mortgage with GMAC or a lifetime base + 0.2% from the ones I have seen, but I am sure Scotal knows far more.


eztiger

836 posts

196 months

Wednesday 31st August 2011
quotequote all
Sit tight - I'm no expert but I imagine the number of mortgage companies looking at their balance sheets and having the thought that having most of the money in hand right now immediately for use is better than having all of the money paid out in dribs and drabs but over a long period will only increase as more banks get into trouble.

At least I presume that's the rationale behind it. That or they consider you to be at risk of defaulting and would rather they got some cash back than had to repossess so long as some other sucker will give you a mortgage. But I suspect the former given the people I know who have been offered it have not been in arrears or having payment problems in any way.

Soovy

35,829 posts

287 months

Wednesday 31st August 2011
quotequote all
Mattt said:
Soovy said:
Did yu read your mortgage contract at all?

They can 100% call the loan in any time they like.
Presumably not during a fixed rate period (without penalties on their side)?
They can require you to pay in full at ANY time.

scotal

8,751 posts

295 months

Wednesday 31st August 2011
quotequote all
Soovy said:
They can require you to pay in full at ANY time.
The FOS, for all their faults, are going to take a pretty dim view of a lender asking for repayment on a mortgage that is up to date. The banks do not currently fancy another crack at the FSA.

I suspect that the only people who are going to get calls are those who have ultra high LTV's, outstanding credit problems or are showing signs of affordability problems where they bank with their mortgage rpovder..

If my mortgage lender calls me to discuss the state of my bank account (given they are with different providers) then there are going to be some pretty unsavoury questions being asked from my end.

Soovy

35,829 posts

287 months

Wednesday 31st August 2011
quotequote all
scotal said:
Soovy said:
They can require you to pay in full at ANY time.
The FOS, for all their faults, are going to take a pretty dim view of a lender asking for repayment on a mortgage that is up to date. The banks do not currently fancy another crack at the FSA.

I suspect that the only people who are going to get calls are those who have ultra high LTV's, outstanding credit problems or are showing signs of affordability problems where they bank with their mortgage rpovder..

If my mortgage lender calls me to discuss the state of my bank account (given they are with different providers) then there are going to be some pretty unsavoury questions being asked from my end.
Aye a fair point I guess.

And in other news....

http://www.telegraph.co.uk/finance/personalfinance...



scotal

8,751 posts

295 months

Wednesday 31st August 2011
quotequote all
Soovy said:
Aye a fair point I guess.

And in other news....

http://www.telegraph.co.uk/finance/personalfinance...
Now this is going to make life interesting for some of my more malleable oppos in the mortgage market the self employed, who maybe earn a bit ore than they declare and I suspect there will be a few accountants regretting the certificates they may have issued in the recent past as well.


Soovy

35,829 posts

287 months

Wednesday 31st August 2011
quotequote all
scotal said:
Soovy said:
Aye a fair point I guess.

And in other news....

http://www.telegraph.co.uk/finance/personalfinance...
Now this is going to make life interesting for some of my more malleable oppos in the mortgage market the self employed, who maybe earn a bit ore than they declare and I suspect there will be a few accountants regretting the certificates they may have issued in the recent past as well.
"Malleable" hehe

There are going to be some sweaty compliance folk about..........

Rude-boy

22,227 posts

249 months

Wednesday 31st August 2011
quotequote all
hehe

I can smell the fear from here smile

Soovy

35,829 posts

287 months

Wednesday 31st August 2011
quotequote all
Rude-boy said:
hehe

I can smell the fear from here smile
And if they're not praying, they should be....



Rude-boy

22,227 posts

249 months

Wednesday 31st August 2011
quotequote all

eztiger

836 posts

196 months

Thursday 1st September 2011
quotequote all
yahoo said:
This is not a Big Brother thing, but we are taking a sensible pragmatic approach should people get into trouble.
..by harassing them *before* they get in trouble.

Interesting indeed..