Mortgage Penalty Charges Claims

[jax007]

Just wonder if anyone could just cast their eye over this 2nd LBA to GMAC before I post it off.

Claiming £1030 (plus a couple of other later charges to be added) in penalty charges (£80 for unpaid mortage ... £30 returned D/D, £50 arrears fee ... and that's just GMAC! Got the bank charges on top of that to pay too!!) Total claim with 8% interest comes to around £1130 (not inc latest charges).

Last letter from GMAC extract ....

With reference to the UTCCR 1999 I can confirm that Reg 5 refers to consumers who fail to fulfil contractual obligation and arer required to pay a disproportionately high sum in compensation. I can confirm that our charges do not constitute a disproportionately high amount of compensation for your breach of the mortgage contract and they do not exceed a reasonable pre-estimate of the loss we incur that results from your breach.

The statements of the OFT are merely expressions of opinion, which do not form part of any statute or regulation. Our charges comply with statute and common law and represent a genuine pre-estimate of the loss we suffer as a result of the breach(es) of the mortgage contract. I regret that I am unable to provide a breakdown of charges for individual accounts.

In conclusion to my investigation, I believe we have at all times operated the account responsibly and in accordance with all legal and regulatory requirements. Our charges are justified and it is therefore not appropriate for us to refund them to you or any interest as a result of the charges.

My response ................

Dear Sir/Madam

Penalty Charges levied on Mortgage Account Number xxxxxxxxxxxxx

Further to my letter of 10 July 2008 (copy enclosed), I do not appear to have received a response from you.

As stated in my letter of 10 July, I reserved the right to add any further charges that may have been applied plus any further interest. Since that time, there have been xxx further charges in the form of returned direct debits and arrears charges amounting to £xxx, and I am therefore exercising that right to include this sum. The total amount of my claim now stands at £xxx and I have enclosed an amended spreadsheet calculation to support this.

I reiterate that terms & conditions of your account contract are unfair, as the charges applied are penalty charges, which are 'to the detriment of the consumer'. The Unfair Terms in Consumer Contracts Regulations 1999 highlights these in Section 5 clause 1.5(1). A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

Again, if you wish to contend that your charges are not penalties, I once again invite you to demonstrate this by supplying me with a full breakdown of the costs to which you have been put as a result of my breaches of contract, details of all actions required to make up these costs and an explanation of how you arrived at the sums charged.

As a matter of courtesy, in case your lack of response was an oversight on your part, I hereby give you a further 7 days in which to pay the total amount of £xxxxxx. Please do not waste my time by offering part payments as such correspondence will be ignored. If I do not receive a full and unconditional payment of the highlighted sum by cheque within 7 days, I will begin legal proceedings to settle this matter without further notice.

Yours faithfully

Does anyone have anything to add to my reply or can give me any further guidance please?

Many thanx
jax

[borgbaiter]

Re: Mortgage Penalty Charges Claims

hi

please dont take legal action. by all means take it to the FOS.

They claim their charges are " a result of your breach of contract" this is good reinforcing your claim. they go on to say "they do not exceed a reasonable pre-estimate" they would need to substantiate this with the FOS and will not want to or will not be able to do so.

The reason to avoid court is that mortgage contracts have indemnity clauses in them. these in effect mean any costs they incure involved in a court action by you against them are at your cost. this is win or loose and even in the small claims track. they will however push for the case to be fast track track. this is a far more complicated process and involves much higher court costs.

having fallen into this trap myself i would urge you to use the FOS not court.


all the best


Borgbaiter

[Tools]

Re: Mortgage Penalty Charges Claims

Jax, I am afraid I have to agree totally with Borgbaiter, I started a claim against GMAC early last year and eventually dropped it before court stage after fully realising the implications.

Many people have come unstuck trying to reclaim Mortgage fees through the courts and I would hate for you to be another.

By all means, as Borg says, pursue it through the FOS but I would strongly warn against court action without VERY carefully checking your T&C`s for an indemnity clause. Costs can be in the tens of thousands and unless you get a Judge that awards no costs the risk is not worth taking................sorry.

[grimbell]

Re: Mortgage Penalty Charges Claims

Hi

I have a claim with the FOS against UCB Homeloans. The only problem with going to them is the time it takes. My claim was lodged in Aug 2007 and still hasn't been allocated to a caseworker!

[borgbaiter]

Re: Mortgage Penalty Charges Claims

hi

i started my court case in december 2007 and when it was stayed (19th August 2008) it had a projected court date of end of october 2008. neither system is particularly fast. Also an appeal would be likely even if i could face a barrister in multi track successfully) Given the difference in risk id rather wait for :-) for the FOS.

Also the FOS is more likely, i feel, to take into consideration breaches of the mortgage code and banking codes (and the associated obligations these contain) in their decision.




Borgbaiter

[Guest]

Re: Mortgage Penalty Charges Claims

Are GMAC your current lender?

[jax007]

Re: Mortgage Penalty Charges Claims

Thanks everyone ... appreciate your input. I did have another claim with TMB and they paid up in full after 2nd LBA, so didn't get so far as legal action. However I have heard GMAC are swines!

Are GMAC your current lender?

Yes

jax

[jax007]

Re: Mortgage Penalty Charges Claims

Before going any further I will go back to GMAC for a copy of the T&Cs at time of mortgage completion and see if there is an indemnity clause. I note following the SAR they omitted these when they sent the other dox.

jax

[argentarius]

Re: Mortgage Penalty Charges Claims

I really don't understand the basis of any legal claim against Early Repayment Charges - this is what I presume your claim relates to, due to its size.

Early Repayment Charges are not a penalty for breach of contract in the slightest.

Mortgage contracts allow the customer to repay the amount outstanding at any point in time that they choose. The customer has the option to repay at a time when there is no Early Repayment Charge, or to repay at a time when there is one. It is a genuine choice and no breach of contract is involved. Therefore it certainly isn't a penalty for breach of contract.

And it will also be less than their loss of profit by your early redemption. And they could prove that if they wanted to. But they don't need to prove that to you, they just need to tell you that you are wrong. Which they have.

The remainder of the GMAC response is, frankly, irrelevant. Their defence should be - and probably will be, in court - exactly as I've set out above.

I don't see that you are likely to win this in court because your logic in claiming is wrong. IMHO.


Moving away from your individual circumstances, it is only through the charging of ERCs that mortgage lenders are able to offer the sort of competitively priced (loss-making in many cases) mortgage products that they do. ERCs are not a bad thing, and they are not unfair.

[Curlyben]

Re: Mortgage Penalty Charges Claims

I believe that this claim is concerning genuine penalty charges and not the more legit ERC as you have mentioned.

You are of course correct when it comes to ERC's as they have been proven, in court, to be lawful charges.

[jax007]

Re: Mortgage Penalty Charges Claims

I really don't understand the basis of any legal claim against Early Repayment Charges - this is what I presume your claim relates to, due to its size.

No Argentarius - this is a current mortgage and purely a claim for penalty charges. They charge £80 a pop (£30 returned D/D plus £50 arrears).

I understand what you are saying about ERC though

jax

[Amy]

Re: Mortgage Penalty Charges Claims

Do you have a suspended possession order on the property?

[jax007]

Re: Mortgage Penalty Charges Claims

Do you have a suspended possession order on the property?

No Amy ... just straightforward penalty charges

jax

------------------------------- merged -------------------------------
Am in the process of locating original T&Cs at time of completion to see if there are any indemnity clauses in relation to legal costs

[Amy]

Re: Mortgage Penalty Charges Claims

Thank God for that. GMAC are not very nice people, so be careful.

[Amethyst]

Re: Mortgage Penalty Charges Claims

They charge £80 a pop (£30 returned D/D plus £50 arrears).


The £30 can be claimed - I wouldnt say the £50 arrears are - that will be the build up of interest between when you should have made the payment to when u do. IMO anyway.