Tweet
Hi I have never been on this site before but I need some advice. My grandmother bought a small flat in Surrey (in an OAP estate), after moving down from Scotland, for £70,000. She had around £20,000 and thus received a loan from RBS for £50,000. This was over 14 years ago and at the time the conditions were such that they have now been made illegal, but paradoxically are still in effect due to the long standing nature of the agreement.
When she bought the small 1 bedroom flat it was £70,000, it is now worth £230,000. After 14 years she has not even begun to pay off the price of the loan. In the 14 years since arranging the contract, she has paid nearly 1.5 times the amount of the loan, just in interest and has not even begun to dig into the loan.
That is the first issue. The second is the agreement when agreed over 14 years ago (which is now illegal) still maintains that when she finally pays off the loan and sells the house (for around 230,000) the bank will take 75% of all that she receives.
As far as I can calculate she has already paid off more than the entirety of the original cost of the house but due to the unscrupulousness of RBS she has still to pay off her loan and to give the 75% of the money she would make if she sold the house (even if she died and we sold it, the bank would still take 75% of the cost plus the entirety of the loan still to be paid off). Just a brief idea, 75% of 230,000 is 172,000, add to that the loan and she would receive approx £7,500 after almost 15 years of interest and appreciation.
There are, I am sure, some particulars that I am not privy to but the bottom line, how can RBS get away with continuing to blatantly extort an 80 year old widow with a poor pension when she has already paid off much more than she originally owed them.
I would greatly appreciate any advice on this matter and I hope that there is some way to resolve this clear breach of morality (I won't except an excuse based on bank protocol and technicalities).
Thanks
Jonathan
When she bought the small 1 bedroom flat it was £70,000, it is now worth £230,000. After 14 years she has not even begun to pay off the price of the loan. In the 14 years since arranging the contract, she has paid nearly 1.5 times the amount of the loan, just in interest and has not even begun to dig into the loan.
That is the first issue. The second is the agreement when agreed over 14 years ago (which is now illegal) still maintains that when she finally pays off the loan and sells the house (for around 230,000) the bank will take 75% of all that she receives.
As far as I can calculate she has already paid off more than the entirety of the original cost of the house but due to the unscrupulousness of RBS she has still to pay off her loan and to give the 75% of the money she would make if she sold the house (even if she died and we sold it, the bank would still take 75% of the cost plus the entirety of the loan still to be paid off). Just a brief idea, 75% of 230,000 is 172,000, add to that the loan and she would receive approx £7,500 after almost 15 years of interest and appreciation.
There are, I am sure, some particulars that I am not privy to but the bottom line, how can RBS get away with continuing to blatantly extort an 80 year old widow with a poor pension when she has already paid off much more than she originally owed them.
I would greatly appreciate any advice on this matter and I hope that there is some way to resolve this clear breach of morality (I won't except an excuse based on bank protocol and technicalities).
Thanks
Jonathan
Comment