Bank not keeping to terms of verbal agreement

[BigCommute]

Hi

My wife was sick for a while and had to give up work. As a result we got into arrears of just under 18000. Just over a year ago I went into the bank (PTSB) to try and come to an arrangement. What we agreed was that we'd prioritise the mortgage over all other bills and loans and after an agreed term we'd apply to add the arrears to the mortgage and extend the term. This, she explained, was common practise and would be a matter of course as long as I maintained the payments.

After 6 months of paying the correct amount I went back in and applied for the arrears to be added on to the overall mortgage and for the term to be extended.

Cue no response for months until the arrears people started calling looking for their money. When I explained that we were in a process and were awaiting the final paperwork to confirm everything I was told (by the 6th different caller who'd I'd spoken to) that they'd reviewed our application and because we were having some problems elsewhere (due to us prioritizing the mortgage of course!) they weren't willing to do it. I explained that my wife was now recovered and had gotten 4 months work this year with now actively seeking a permanent job.

They then offered us a deal of no extension on the terms, a slight reduction each month but with a huge lump sum (over 3 times the arrears amount) now due at the end of the mortgage term. I can accept it or pay the arrears in full immediately.

Anyone know if this is common practise? Have I any chance of fighting for the original agreement of the term extension?

thanks

 

[Branz]

Have you done the formal SFS paperwork through the MARP?
If the term were to be extended, have you suitable life cover and is the new date beyond your retirement age when your income would drop off?
If you accept the deal on offer, your existing reducing balance life cover maynot be enough because it is designed to be at zero for the last payment

 

[BigCommute]

I filled in the PTSB standard form - that's the only one I've done. With the current deal I'd be 67 when it ends (my wife 69). I was told at the meeting that it would extend out by about 18 months to meet the arrears.

Maybe I'm being simplistic but from their point of view are we not more likely to be able to pay a monthly amount for an extra 18 months rather than come up with a plan for a huge lump sum at that stage?

I'd have to check the details of the life cover - that hadn't occurred to me at all.

 

[Branz]

I filled in the PTSB standard form - that's the only one I've done. With the current deal I'd be 67 when it ends (my wife 69). I was told at the meeting that it would extend out by about 18 months to meet the arrears.

Maybe I'm being simplistic but from their point of view are we not more likely to be able to pay a monthly amount for an extra 18 months rather than come up with a plan for a huge lump sum at that stage?

I'd have to check the details of the life cover - that hadn't occurred to me at all.

Thanks for reply: I will leave the rest of it to the more qualified here as its outside my area
Good luck!

 

[44brendan]

The agreement proposed by the Bank does'nt make sense for any mortgagor. I'm assuming that you are in MARP which means that any agreement made with you must be in line with your affordability. This does not necessarily mean that the mortgage term will be extended. However, there is no logic in requiring any mortgage holder to meet a lump sum at loan maturity unless the source of that lump sum has been properly identified. Assuming that you have completed an up to date SFS you will have identified a current monthly affordable payment. You state that you have other external borrowings which have not been prioritised to date. What are your intentions in respect of these borrowings? Without full financial information the advice we can give you here is limited. Perhaps you could consider filling in the AAM financial template and that will facilitate a better assessment of your circumstances and repayment capacity.

 

[Gerry Canning]

Hi

My wife was sick for a while and had to give up work. As a result we got into arrears of just under 18000. Just over a year ago I went into the bank (PTSB) to try and come to an arrangement. What we agreed was that we'd prioritise the mortgage over all other bills and loans and after an agreed term we'd apply to add the arrears to the mortgage and extend the term. This, she explained, was common practise and would be a matter of course as long as I maintained the payments.

After 6 months of paying the correct amount I went back in and applied for the arrears to be added on to the overall mortgage and for the term to be extended.

Cue no response for months until the arrears people started calling looking for their money. When I explained that we were in a process and were awaiting the final paperwork to confirm everything I was told (by the 6th different caller who'd I'd spoken to) that they'd reviewed our application and because we were having some problems elsewhere (due to us prioritizing the mortgage of course!) they weren't willing to do it. I explained that my wife was now recovered and had gotten 4 months work this year with now actively seeking a permanent job.

They then offered us a deal of no extension on the terms, a slight reduction each month but with a huge lump sum (over 3 times the arrears amount) now due at the end of the mortgage term. I can accept it or pay the arrears in full immediately.

Anyone know if this is common practise? Have I any chance of fighting for the original agreement of the term extension?

thanks

........
1. On anything to do with Banks get it only in writing and keep copies.
2. If you are phoned, write down name/date/time/discussion.

From what you write you are now able to re-start your nomal mortgage payments.
If so, renew your normal payments and send letter to Ptsb outlining your view of your position , ask them to acknowledge your note , and ask for their help in sorting this.
If you get a (stupid) response send all to their customer complaints section. Ensure you tell them you really want to sort things to everyones satisfaction but need their help.
I think you have agood chance of getting extension.
In relation to large lump sum at end. Probably so eg ,5000 arrears @ 4% adds 200 per year so in 20 years = 9,000 + interest compounded on the 200 per year , reckon circa 12,000?

To anyone Please, Please do all Bank stuff in writing and keep copies.