My Mortgage Company Won’t Help Me Until I’m 3 Months in Arrears!
Jan 22, 2018
What is the Problem?
This one comes from Daniel in Carlisle, and he says:
“I know I’m going to have difficulty with a few months payments on my mortgage, but when I contacted the mortgage company, staff told me they couldn’t agree a payment arrangement until I’m actually 3 months in arrears; is that correct because it seems crazy?”
- The requirement to be three (3) months in arrear, before the Bank will discuss a payment arrangement, is more than likely the policy of the particular Bank you deal with, although this is becoming more common place;
- We do not believe the policy complies with MCOBS and or Treating Customers Fairly ‘TCF’.
The Mortgage and Home Finance Conduct of Business Sourcebook (MCOBS) contains rules which govern the relationship between mortgage lenders and borrowers "in" the United Kingdom. They were originally overseen by The Financial Services Authority in October 2003. The Rules apply to specific mortgage contracts which were entered into after 31 October 2004.
MCOBS is a set of rules now managed by the Financial Conduct Authority (the FCA) pursuant to the statutory powers and duties vested in it by the Financial Services and Markets Act 2000
- We believe the Bank Policy affecting you has more to do with money (hedging and or insurance payouts) than compliance with MCOBS, and has absolutely nothing to do with TCF.
The Outline Solution
Short Term Problems:
- If your "problem" is a short term problem, work out an offer of payment which will bring your account up to date in the shortest possible period of time, and put it in writing to the Bank.
- Under normal circumstances the Bank would require an income and expenditure form to be completed. Don’t wait for the Bank to suggest and or demand the form be completed. Be proactive and conduct an Income and Expenditure review yourself and send it to the bank.
- Use this exercise as an opportunity to “strip away” unnecessary expenditures and don’t forget to prioritise who you pay: for example, the mortgage should come before any debt which is unsecured
Worried About Court Action?
- It is highly unlikely that a court would grant an order for possession where the problem is a short term problem. In such a situation it is highly unlikely that solicitors would proceed to court in the first place (See MCOBS 13).
- Whether staff are aware or not, they are required to assist you and not make unreasonable demands. Court action with a view to seeking possession should be reserved for only the most serious of cases where no viable long term solution exists.
Long Term Problems:
- If the problem is a serious one, brainstorm alternative solutions; ultimately you may have to learn to accept that your life-style is going to change.
- House share, downsizing, and or renegotiating your mortgage over a longer term, are potential ways of circumnavigating the problem.
- You can use the Financial Ombudsman Service to delay and or stall court action. We have information available that can assist you. Simply email [email protected] for further details.
- You can also challenge the validity of your mortgage and we just so happen to have information available that can assist you. Simply email [email protected] for further details, or visit the ToolBox and look for the Mortgage related solutions.
- The benefits system may offer some financial assistance.
- Are you sure the mortgage company complied with their side of the contract? You may want to check out the ToolBox and obtain the Mortgage Destroyer Webinar, and the Mortgage Seminar 2015.
Possible Arguments Against You
- Staff incompetence. negligence, and or ignorance is, in our experience, the general cause of stress among customers facing financial difficulty.
- Staff are poorly trained and or have little product/industry knowledge especially when it comes to regulatory requirements and or the internal ‘collection’ tools they have their disposal, to assist customers.
- Staff shortcomings, may open up a valid line of complaint which, in turn, may influence the way the Bank treats you.
- Staff that are competent are often too scared to stand up to bosses with big egos and thus tend to go along with "harsh" and or "unhelpful" practices.
- Money/profit/greed is clearly a key-driver, if not the key-driver, in creating the type of unwritten “policy” referred to above.
- Scrutinise the Corporate Website for your mortgage company. You may find that your mortgage company is NOT calling the shots. You may also discover that your mortgage company does not actually own your mortgage.
The Almost Legal Info
- Mortgage products are not the “next BIG scandal”; they are already a scandal and you are strongly advised to begin investigating NOW! After all, for most people, a mortgage is the largest contract they will ever enter into.
- If you can find problems with the product, the way it was sold, and or the way in which it has been administered, you may be able to negotiate with the Bank (it is unlikely that you will be able to reason with the Bank)!
- Make and keep records of conversations, advice and communications.
- Do not accept and or rely upon the word of staff members. Question everything and ask staff to specify whether any obstruction to real “help” is a 'policy requirement' or a 'statutory requirement'.
- Double check and verify for yourself, everything staff members tell you and pull them up if they are wrong.
- Even if staff do not formally accept a payment arrangement don’t use this as an excuse not-to-pay: do what you have said you will do and if necessary, pay what you said you would pay.
- Always stick to your word, even if the Bank staff don’t!
- Try to look at the ‘rules’ as a way in which you can turn-the-tables. The Rules are supposed to offer you an element of protection; learn them, know them, and use them!
- The Money Advice Service information sheet “Problems paying your mortgage” is available on the website www.moneyadviceservice.org.uk; copies can also be obtained by calling 0300 500 5000 (telephone number correct as at date of initial publication).
- YAYC has produced some helpful and informative shows to guide you on your investigative quest. Simply email [email protected] for further details.
- Don’t be put off by your perception about the scale of the task. Think about the value of your home and what some research or investigation could ultimately achieve.
- Learning what a mortgage is, how it works, and how it is supposed to be administered could save you, your family and your friends, hundreds of thousands of pounds.
Need More Help?
Everything starts with you. Don’t be taken for a ride and don’t lose out simply for the want of researching that which you should have researched, BEFORE you ever applied.
Don’t be afraid to ask the Bank questions. Asking questions is actually one of the most powerful tools you have available to you…. so ask away!
If you want a more detailed guide to your Mortgage, please check out the ToolBox and look for the Mortgage related seminars and webinars.
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