Melbourne Mortgages-help Needed

We had an arrangement to pay our arrears off when my husband was unwell last year and have been keeping to the arrangement so far and the arrears are being repaid at the rate of £50 per month. Presently the arrears are less that 2 months of the contractual monthly payment. The arrears presently total just over £600 and will reduce at £50 per month and be clear in 12 months time. However, the lender is saying that as a result of these arrears that we have incurred £497 of expenses and £1,785 in additional charges and that interest on these amounts currently stand £246 therefore an arrears figure of £600+ they are claiming in excess of 4 times this amount in expenses charges and interest. This seems to be exhorbitant bearing in mind the level of arrears and this cannot be correct. We would guess that we would need to send them an SAR to get a breakdown of these charges and expenses.

Not so very long ago Mr T missed a payment but made it up approximately 10 days after the due date. In the intervening time they instructed a debt collector who without an appointment and without warning turned up a 7:15am one morning demanding to speak to us and obtain payment. This was resolved by speaking to the lender and complaining to them of this bad practice. A letter of apology was received after this complaint. So it could be that some of the agents fees are included in the above figures. Mr T also asked the lender to supply at that time a statement of account which to this date has not been received.

On the 31st October they issued a notice of DEFAULT SUMS because the account has fallen into arrear and that this has led to additional charges being added to the account. They then attach a NOTICE OF DEFAULT SUMS served under section 86e of the Consumer Credit Act 1974 relating to fixed sum loan agreement. The amounts which they say is dispute is for £23.50 being disbusrements re enquiry fee which has to be paid by 15/10/08. The observations here are:-
1. This notice of default sums was issued on 31/10/08 and they have never previously sent any payment request for £23.50 payable by 15/10/08.
2. They are not claiming the exhorbitant expenses additional charges and interest in this notice.
3. The notice served under s86e cannot be found but nevertheless, defaults are coverered by s87 whereas s86 deals with the death of a hirer or debtor.

Apart from doing an SAR which we think is correct to do has anybody else any comments or suggestions relating to s86e.

[Amethyst]

Re: Melbourne Mortgages-help Needed

3. The notice served under s86e cannot be found but nevertheless, defaults are coverered by s87 whereas s86 deals with the death of a hirer or debtor.

The notice attached (second attachement) is the s86E notice. It was added as a new clause in 2006.




1. This notice of default sums was issued on 31/10/08 and they have never previously sent any payment request for £23.50 payable by 15/10/08.

The default notice is in addition to the letter with the details of figures on 21st oct (attachment one) its notification of a default sum. The 15th Oct date is the date the sums notified in attachment 1 defaulted on the payment arrangement.

I assume the missed installment that was made up 10 days late incurred a charge and interest which needed paying with the installment to keep with the arrangement.

Clause 12: Notice of default sums

33. Clause 12 inserts a new section 86E after the new section 86D (inserted into the 1974 Act by clause 11). Section 86E applies to situations where a debtor or hirer under a regulated agreement incurs a default sum (as defined by clause 18). A creditor or owner must give the debtor or hirer a notice in the specified form when a default sum becomes payable as a consequence of a breach of the agreement. The Secretary of State has the power to provide that this only applies where the default sum exceeds a specified amount.

34. A creditor or owner may only require a debtor or hirer to pay interest in connection with a default sum 28 days after the day the notice was given to the debtor or hirer. If the creditor or owner fails to give a notice to the debtor or hirer then he is not entitled to enforce the agreement until he gives the notice to the debtor or hirer.

86E

“86E Notice of default sums
(1) This section applies where a default sum becomes payable under a
regulated agreement by the debtor or hirer.
(2) The creditor or owner shall, within the prescribed period after the
default sum becomes payable, give the debtor or hirer a notice under
this section.
(3) The notice under this section may be incorporated in a statement or
other notice which the creditor or owner gives the debtor or hirer in
relation to the agreement by virtue of another provision of this Act.
(4) The debtor or hirer shall have no liability to pay interest in connection
with the default sum to the extent that the interest is calculated by
reference to a period occurring before the 29th day after the day on
which the debtor or hirer is given the notice under this section.
(5) If the creditor or owner fails to give the debtor or hirer the notice under
this section within the period mentioned in subsection (2), he shall not
be entitled to enforce the agreement until the notice is given to the
debtor or hirer.
(6) The debtor or hirer shall have no liability to pay any sum in connection
with the preparation or the giving to him of the notice under this
section.
(7) Regulations may—
(a) provide that this section does not apply in relation to a default
sum which is less than a prescribed amount;
(b) make provision about the form and content of notices under this
section.
(8) This section does not apply in relation to a non-commercial agreement
or to a small agreement.”

Oh and Yes, SAR is a good idea.

[Amethyst]

Re: Melbourne Mortgages-help Needed

The letter isnt a demand for payment, its a notification of sums being added to the mortgage, basically, because of the £600 arrears.

You need to do a SAR on them and ask specifically for breakdowns of the fees/charges added. Interest is straightforward.

and it might also be a good idea to write and check with them all is still okay with your £50 a month payments.

The notice of the £23.50 is cause you broke the agreement and paid one month late and thats the fee for defaulting that part of the agreement . I assume this default occured on 15th oct.

the 7th november date is just as a guide to show what the arrears will have cost you additonally as at that date.

hope that makes more sense.

[TUTTSI]

Re: Melbourne Mortgages-help Needed

Section 86e from the OFT web site....

5 DEFAULT SUM NOTICES
5.1 From 1 October 2008, creditors will be required by section 86E of the 1 974 Act42 to give the debtor a notice in a specified form where a default sum becomes payable under a regulated agreement. A 'default sum' means a sum (other than interest) which is payable by the debtor in connection with a breach of the agreement.43
5.2 The notice must be given to the debtor within 35 days of the default sum becoming payable.44 The notice may be incorporated in any other statement or notice under the 1974 Act.
5.3 The creditor may not charge interest in connection with a default sum before the 29th day after the day on which the default sum notice was given to the debtor.45 In addition, such interest must be simple interest, and may not be compounded.46
5.4 The 2007 Regulations specify the information and forms of wording to be included in notices of default sums.47 In particular, the notice must include:
• the amount and nature of each default sum payable
• the date on which it became payable
• the total amount of default sums covered by the notice.
42 As inserted by section 12 of the 2006 Act
43 Section 187A of the 1974 Act as inserted by section 18 of the 2006 Act
44 Regulation 28 of the 2007 Regulations
45 Section 86E(4)
46 Section 86F of the 1974 Act as inserted by section 13 of the 2006 Act
47 Regulations 29-32 and Schedule 4

[Emerald]

Re: Melbourne Mortgages-help Needed

I thought only agreements under £25K were covered by the CCA. Mortgages are not.

[Amethyst]

Re: Melbourne Mortgages-help Needed

I think, although I might be wrong, this is a fixed sum loan as opposed to a true mortgage...thats what the paperwork seems to suggest. I also have no idea on the full value of the mortgage/loan etc.

Tutts, whats the original agreement ?



from the letter
This Notice of Default Sums now served on you relates to a Fixed Sum Loan Agreement numbered MML/xxxx and dated 20 Nov 2006 entered into by you with Melbourne Mortgages Limited of the address below.

[TUTTSI]

Re: Melbourne Mortgages-help Needed

I thought only agreements under £25K were covered by the CCA. Mortgages are not.

It is a fixed loan agreement regulated by CCA 1974 and is a second mortgage - so hence fall within the £25k

[TUTTSI]

Re: Melbourne Mortgages-help Needed

A full SAR and a separate letter was posted today by recorded delivery. So I guess they have 42 days to respond.

I can never imagine they could answer every question we have put to them.

xx

[TUTTSI]

Re: Melbourne Mortgages-help Needed

Furthermore, we have have just checked Experian and Melbourne have us down for in excess of £4,000 of charges and we have apart from the Default the other day never ever been informed of any charges, neither have we had any letters or statements telling us that we have incurred charges. What is the critera under the Consumer Credit Act, are they upposed to advise us that charges are being added to the account.

Also, according to Experian we are only one month in arrears dated 26/10/08 yet the default which came a few days after showed just under 2 months in arrears.

The plot thickens with this shower.

We are ready for battle.

xx

[TUTTSI]

Re: Melbourne Mortgages-help Needed

Questions....

1. Does this mean we would have to wait 12 moths from 1/10/08 to receive a statement as we are an existing customer.

2. Under the SAR we have requested the statement which we have asked for on many occasions and they have never responded. we take it they will have to supply the statement under the SAR request.

3. Also, the Experian report is showing a figure outstanding which we thought may be capital and interest + charges, should this not have reflected the £8K of payments we have already made. For instance we borrowed £25K, they are showing £32K balance. Now we paid £8k and we know that £2k was the broker fee that got added on and which we agreed to. So we are thinking perhaps they have added loads more charges and now we owe mega more than we borrowed. It feels like we will be on the never never with these guys.

4. Should under the CCA 1974, everytime they are imposing a charge, are they supposed to advise in writing what they are charging us and does anyone have the section in CCA 1974 that this applies to.


s77A(l)(a): the first statement is required to be *given' within the period one year beginning with the day after the day on which the agreement is made; or
CCA 2006 Schedule 3, paragraph 2(2): for existing agreements, within one year that begins with the day on which this section comes into force, i.e. 1 October 2008;
s77A(l)(b): thereafter, statements are to be 'given' at intervals of no more than 1 year.

NOTE- A proposed Legislative Reform Order will amend both Primary and Secondary legislation to achieve the original policy intention that the statements cover consecutive periods of not more than one year and that each statement must be given within thirty days of the end of the period to which it relates, /.& 30 days commencing on the day after the last day of the statement period.


s77A(5): If a creditor does not give the debtor a statement whenever required to do so then, under s77A(6):
(a) he is not entitled to enforce the agreement during the period of non-compliance;
(b) the debtor is not liable to pay any interest during that period, (this would require a recalculation of the pre-computed interest which was applied at the date of the agreement), and
(c) the debtor is also not liable to pay any 'default sum' that would have become payable during the period of non-compliance or charged after compliance but relates to an event during non-compliance.

[Curlyben]

Re: Melbourne Mortgages-help Needed

You know what I'd also be inclined to CCA them and get the actual paperwork you signed to see if the charges etc are covered in their T&C's.
I know you have SAR'd them, but a CCA request has certain other requirements and a different timescale.

Looks like they are playing fast and loose with the truth here, but I'd certainly look into reclaiming these charges, especially as they are blatantly exorbitant.

[TUTTSI]

Re: Melbourne Mortgages-help Needed

[quote=Curlyben;89771]You know what I'd also be inclined to CCA them and get the actual paperwork you signed to see if the charges etc are covered in their T&C's.
I know you have SAR'd them, but a CCA request has certain other requirements and a different timescale.

Looks like they are playing fast and loose with the truth here, but I'd certainly look into reclaiming these charges, especially as they are blatantly exorbitant.[/quote


Curly, is their a CCA letter which you suggest!
Ta
xx

[Curlyben]

Re: Melbourne Mortgages-help Needed

As this is the OC I'd be inclined to go for a simple one.
Something along these lines should do the trick:

Account No: **BLAH**
Dear Sir/Madam
With reference to the above agreement, we would be grateful if you would send us a copy of this credit agreement and a full breakdown of the account including any interest or charges applied, also the terms and conditions govern this agreement. We understand that under the Consumer Credit Act 1974 [sections 77-79], we are entitled to receive a copy of any credit agreement and a statement of account on request. We enclose a payment of £1 which represents the fee payable under the Consumer Credit Act 1974.

We understand a copy of any credit agreement along with a statement of account should be supplied within 12 working days.
We understand that under the Consumer Credit Act 1974 creditors are unable to enforce an agreement if they fail to comply with the request for a copy of the agreement and statement of account under these sections of the Act.

We look forward to hearing from you.

Yours faithfully

[TUTTSI]

Re: Melbourne Mortgages-help Needed

Following the SAR which was sent to them on 12th Nov08 and signed for the next day. The following paparagraph was included in our SAR:-

Creditors are warned by the Office of Fair Trading under the Debt Collection Guidance that the following practices are "considered unfair":
“PUTTING PRESSURE ON DEBTORS OR THIRD PARTIES IS CONSIDERED TO BE OPPRESSIVE.”
This includes:
• Contacting you too frequently
You are instructed with immediate effect to destroy all records of any phone numbers you may have where we can be contacted and to instruct all employees to not attempt to telephone me whilst this alleged debt is in dispute. Failure to comply will result in formal complaints to OFT, FOS and ICO requesting removal of your license to conduct any Consumer Credit trade and a complaint to the police seeking prosecution for harassment.

Both my o/h and I have both each received text messages from them on Monday reminding us that the DD is going out later this week. In the past we had never ever received any text messages from them, only phonecalls if a DD did not go through. Even though they were already in receipt of the SAR when they sent it. I would say that they have not removed our telephone numbers as part of our SAR request. Whilst it was only a text, it is still harrassment. We will hang fire on this to see for the moment to see if they they respond within the time limits or to see they do anything else naughty and then a complaint will be made to the relevant parties. We have both not deleted our text messages so we actually have proof if needs be.

Also, so far they have not answered our letter regarding the continuance of the arrangement even though that was also sent on the 12th. But in light of the text messages I presume that they have agreed to continue with the arrangement.

xx

[TUTTSI]

Re: Melbourne Mortgages-help Needed

OK, further update.

Two letters received to day (in separate envelopes).

1. They have returned the £10 fee for the SAR - as they say that they will supply all the info we have requested without payment. Is this OK!!

2. They wrote following the text messages sent - that they were just bringing to our attention that the DD would be collected this weekand that we were to make sure that funds were available to meet this DD. Is this harrassment!!

Thanks