LEGAL CORNER by Owen Hill of Wollen Michelmore Solicitors
Mis-sold mortgage monies: maybe? I
met Martin recently (not his real name) to discuss a property transaction and asked to see the Deeds. There was a number on the front-page cover of his 1982 Mortgage Deed which caught my eye. I said something along the lines of how lucky we all are to be in a world where no one pays 14% interest to their bank for mortgage monies anymore. Martin was not amused.
He told me that the original loan was at a variable rate that rose to 15% in 1989 when he was offered the opportunity to fix the rate at 12.5%. This seemed
like a good idea at the time – so he signed a letter from the lender that recorded the fix and slept well for a while.
As interest rates fell over the last twenty years he occasionally asked for a redemption figure from his lender so that he could see what it would cost to repay the loan.
Wollen Michelmore SOL I C I TOR S
Did I mention that the loan of £100,000 was interest only? Well – the last time the lender produced a statement indicating the cost of repaying the loan was in 2011 and it obviously included the repayment of the capital of £100,000 but included also a charge for early redemption of the loan. Guess how much? You’re not even close. How about £60,000?
The South Devon Law Firm
Did I mention that the loan made in 1982 was for 40 years and that the brief letter signed in 1989 fixed the rate at 12.5% for the whole of the remaining term of the loan expiring in 2022?
The experience, dedication and values to support you, your family and your business
The lender is not a dodgy bloke that Martin met in a pub but a wholly owned subsidiary of a High Street Bank that has a branch in this town. The letter that fixed the rate included a statement to the effect that there would be a charge for early repayment but did not say how it would be calculated.
Martin told me that he thought this meant he might have to pay £600 or maybe £6,000 but not £60,000. The Bank calculates the charge on the basis of the loss of profit that would flow if the loan were repaid early. Is this fair?
Torquay • Newton Abbot • Paignton • Dartmouth
www.wollenmichelmore.co.uk
This firm is regulated by the Solicitors Regulatory Authority (No.563758)
Did I mention that the loan was not for the purchase of a residential property but for the purchase of a business?
There are no consumer protection laws to protect businesses from each other.•
Dartmouth office 01803 832191
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76 |
Page 77 |
Page 78 |
Page 79 |
Page 80 |
Page 81 |
Page 82 |
Page 83 |
Page 84 |
Page 85 |
Page 86 |
Page 87 |
Page 88 |
Page 89 |
Page 90 |
Page 91 |
Page 92 |
Page 93 |
Page 94 |
Page 95 |
Page 96 |
Page 97 |
Page 98 |
Page 99 |
Page 100 |
Page 101 |
Page 102 |
Page 103 |
Page 104 |
Page 105 |
Page 106 |
Page 107 |
Page 108 |
Page 109 |
Page 110 |
Page 111 |
Page 112 |
Page 113 |
Page 114 |
Page 115 |
Page 116 |
Page 117 |
Page 118 |
Page 119 |
Page 120 |
Page 121 |
Page 122 |
Page 123 |
Page 124 |
Page 125 |
Page 126 |
Page 127 |
Page 128 |
Page 129 |
Page 130 |
Page 131 |
Page 132 |
Page 133 |
Page 134 |
Page 135 |
Page 136