I Can’t Pay the Mortgage But the Bank Won’t Help Me Until I’m 3 Months in Arrears
This one comes from Daniel in Carlisle in Shropshire, 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 can’t agree a payment arrangement until I’m 3 months in arrears; is that correct because it seems crazy?”
- The requirement to be three (3) months in arrears 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 MCOB and or Treating Customers Fairly ‘TCF’.
The Mortgage Conduct of Business rules (MCOB) govern the relationship between mortgage lenders and borrowers in the United Kingdom. They were originally issued by The Financial Services Authority in October 2003. They apply to Regulated Mortgage Contracts which are entered into after 31 October 2004.
Sometimes referred to as the Conduct of Business Sourcebook; (MCOB) 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 has more to do with money (hedging and or insurance payouts) than compliance with MCOB, and has absolutely nothing to do with TCF
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Simon, began his working life with Messrs. Coutts & Co, bankers to the Queen. During a career which has, thus far, spanned 29 years, Simon has served time as a Bank Manager, Financial Adviser, and General Manager of a major UK Broking Firm, which later became London Scottish Broking. An ex-Qualified Mortgage Adviser, Simon set up his own broking firms in late 2002... Find out more about Simon
Mark is a multiple best selling author on food, health and business. He has had decades of experience in natural health and is an outspoken advocate of natural nutrition and drug free living. He's also the founder and executive editor of Low Carb Mag. More about Mark
The Outline Solution
Short Term Problems:
- If your problem is a short term problem, work out an offer of payment, that 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.
- Use this exercise as an opportunity to “strip away” unnecessary expenditures, and don’t forget to prioritise whom 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, and in such a situation, it is highly unlikely that solicitors would proceed to court in the first place, (See MCOB).
- Whether staff are aware or not, they are required to assist, 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 ways or 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 info@YouAndYourCash.Com 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 info@YouAndYourCash.Com for further details.
- The benefits system may offer some financial assistance
- Are you sure the mortgage company complied with their side of the contract?
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 available to them to assist customers.
- Staff shortcomings, may open up a valid line of complaint, which in turn, may influence the way in which the Bank treats you.
- Staff that are competent are often too scared to stand up to bosses, and therefore tend to go along with tough, and or unhelpful practices.
- Money/profit/greed is clearly a key driver, if not the key driver in determining this type of “policy”.
- 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.
- Make and keep records of conversations, advice, and communications. Check out the YAYC Good Housekeeping show
- 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 policy based or regulatory based. Verify 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 (MCOB) 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.
- YAYC has produced some helpful and informative literature and DVDs to guide you on your investigative quest. Simply email info@YouAndYourCash.Com for further details.
- Don’t be put off by your perception of the scale of the task. Think about the value of your home, and what some research and investigating could ultimately achieve.
- Learning what a mortgage is, and how it works, and how it is supposed to be administered, could save you and your family and your friends, 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 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 together with templates of letters you can personalise and send to the bank, building society or any other company for that matter; please go to..