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Jimmy2Times

Abbey Mortgage Blunders

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http://www.timesonline.co.uk/tol/news/uk/article2010104.ece

Thousands of homeowners may have to spend up to 15 years extra paying off their mortgages because of blunders at one of Britain’s biggest banks.

Abbey, the former building society, routinely extended mortgage periods when interest rates moved in the late 1980s and early 1990s but failed to explain this properly to some customers.

A homeowner with a £100,000 repayment mortgage over 25 years would pay £644.30 a month if interest rates were 6% but, at 7%, monthly repayments would rise to £707 and the total interest paid would be £112,034. If repayments were pegged at about £640 but the term stretched to 34 years, interest would total £162,458 – adding £50,424.

This just goes to show how devious mortgage companies are and how stupid their customers are.

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If people can't be bothered to keep an account of the biggest financial transaction

of their lives...... tough luck !

I used to make copious calculations, myself, when I had a mortgage.

Caveat emptor.

Caveat mutuo.

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This just goes to show how devious mortgage companies are and how stupid their customers are.

Bang! nail on the head. They only get away with it because there are more than enough stupid muppets out there who borrow, at any cost, to get on the property ladder before it is too late.

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No ones complaining - because as house prices rise it doesnt matter. If the mortgage is still £xxxK after 35 years, it would nt matter - just sell the house for £1m quid and you'll still make money.

Just hope you dont lose your job in that time.

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Guest Charlie The Tramp
Surely this is illegal?

In the old days of steam operated computers, when rates went up the BS would write informing you of the increased monthy repayment or the option to extend the term. Surely today the lender would have to inform the borrower that the term has been extended when rates rise, and the borrower being financially niave would think what nice people they are helping me out like that. :rolleyes:

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Surely this is illegal?

I'd think so taken on face value, but I suspect when customers faced financial difficulties abbey offered them a new contract, so its not illegal if the customer signed another piece of paper and agreed to it.

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http://www.timesonline.co.uk/tol/news/uk/article2010104.ece

This just goes to show how devious mortgage companies are and how stupid their customers are.

Houses are the worst financial investment anyone could possibly undertake at the moment, people are forgetting that house are to LIVE in. Don't worry there will be no such thing as BTL in 5 years, just like the yuppy culture was wiped out in the 80's.

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Bang! nail on the head. They only get away with it because there are more than enough stupid muppets out there who borrow, at any cost, to get on the property ladder before it is too late.

Property cliff, you mean, property cliff.

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Brings back memories Charlie - I kept some of the old notes from the Abbey and showed them to the kids who couldn't believe the interest rates. Made them a bit more wary I can tell you - if it can happen once it can happen again.

That's a good idea anyway. Possibly you could scan one of these letters, anonymize it, and post it here. Just so that people can get

used to it before it starts happening all over again.

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