Is this an Unfair Term?

[Animal]

Is a clause in a mortgage agreement that requires immediate repayment of the entire mortgage amount, if a single payment is missed, an unfair term?
Opinions?

[SpringerSpaniel]

Re: Is this an Unfair Term?

Yes, in my opinion.

[Caspar]

Re: Is this an Unfair Term?

All mortgages are governed by MACOB (The Mortgages and Home Finance: Conduct of Business Sourcebook.

MCOB 13.4 under Arrears and Repossessions states:

MCOB 13.4 stipulates that if a customer falls into arrears, a firm must within 15 business days provide the customer with certain arrears information, and to provide further disclosure on subsequent arrears. Before commencing an action for possession, a firm must (1) provide a written update of the information required by MCOB 13.4; (2) ensure that the customer is informed of the need to contact the local authority to establish whether the customer is eligible for local authority housing after his property is repossessed; and (3) clearly state the action that will be taken with regard to repossession.

This would seem to indicate that they can legally do it as long as it is in their terms and conditions.

[Animal]

Re: Is this an Unfair Term?

Surely only those mortgages entered into since Oct 2004. This is a pre regulation mortgage.

Schedule 2 UTCCR 1999 INDICATIVE AND NON-EXHAUSTIVE LIST OF TERMS WHICH MAY BE REGARDED AS UNFAIR

para 1.(g) enabling the seller or supplier to terminate a contract of indeterminate duration without reasonable notice except where there are serious grounds for doing so;

however Para 2. Scope of paragraphs 1(g), (j) and (l)

(a)Paragraph 1(g) is without hindrance to terms by which a supplier of financial services reserves the right to terminate unilaterally a contract of indeterminate duration without notice where there is a valid reason, provided that the supplier is required to inform the other contracting party or parties thereof immediately.

implies an exemption...

There is an example given by the FSA which implies such a term is unfair if it does not give a period in which the breach can be remedied, i.e. the arrears bought up to date... So I'm left confused... :-(

[Caspar]

Re: Is this an Unfair Term?

OK - you didn't state it was pre 2004.

Does your mortgage provider subscribe to the MCRI? If so, then depending when you took your mortgage out it would have been regulated by the IRB or MCCB.

[Animal]

Re: Is this an Unfair Term?

Does your mortgage provider subscribe to the MCRI? If so, then depending when you took your mortgage out it would have been regulated by the IRB or MCCB.

That I don't know. Mortgage was taken out in June 2003.

[Caspar]

Re: Is this an Unfair Term?

Who is it with?

[Animal]

Re: Is this an Unfair Term?

Birmingham Midshires...

[SpringerSpaniel]

Re: Is this an Unfair Term?

You could refer it to the FSO for a determination of whether they consider it in breach of UCTA or UTCCR.

[Caspar]

Re: Is this an Unfair Term?

That was a good challenge, but I think we've got there.

Your mortgage would have been governed by The Mortgage Code which you can find at the bottom of this link in pdf form:

Mortgage Code

Chapter 8 deals with financial difficulties. If you read that then Birmingham Midshires have not conformed to the code.

The only slight doubt is that it was a voluntary code, but over 98% of Mortgage Providers signed up to it. Unless you are very unlucky and Birmingham Midshires are in the 2% that didn't (which I doubt as they are/were a reputable company) then it would appear as though they have acted unfairly.

Don't take this as gospel, but I've tried my best to find you an accurate answer.

[WendyB]

Re: Is this an Unfair Term?

Are/were you in arrears? And are they actually demanding full payment?

[Animal]

Re: Is this an Unfair Term?

That was a good challenge, but I think we've got there.

:-)

Your mortgage would have been governed by The Mortgage Code which you can find at the bottom of this link in pdf form:

Mortgage Code

Chapter 8 deals with financial difficulties. If you read that then Birmingham Midshires have not conformed to the code.

The only slight doubt is that it was a voluntary code, but over 98% of Mortgage Providers signed up to it. Unless you are very unlucky and Birmingham Midshires are in the 2% that didn't (which I doubt as they are/were a reputable company) then it would appear as though they have acted unfairly.

Yes, I do remember they did sign up with the mortgage code.

Are/were you in arrears? And are they actually demanding full payment?

Yes. They were asked for a payment holiday which they refused. They demanded full payment or repossession. Situation was MIL was dying of cancer and wife was unwell, so I was unable to work. I'm self employed and was so when I took out the mortgage. There are other unfair factors as well.

I am challenging the clause that allows them to repossess under UTCCR as it has no provision for remedy of what IMHO is a minor breach. They have shown no sympathy whatsoever and made no attempt to consider alternatives.

[Jason Drakes]

Re: Is this an Unfair Term?

It depends on the company who you are dealing with. But in my opinion there is some rules about missing one installment and you have to pay the entire money at once. But banks have solutions you just visit your bank.