northern rock

[debtdumb]

hi,
entered into an iva on may 18th 2009 and included in the iva was the unsecured part of our 'Together Mortgage' with Northern rock.So set up a standing order to carry on paying the mortgage(all ok no probs said Northern rock).
Just received our quarterly mortgage statement and they have been using part of the mortgage payment to continue paying off the unsecured loan.
Therefore our mortgage is not getting the usual payment (£178 less than it should be getting) so it will cost more in the long run .
Are Northern Rock allowed to do this?
I have contacted my I.P and am waiting for them to look into it but wondered if anybody could offer advice in this matter.
Thanks

[Adam Davies]

Hi
NR are not allowed to do this and you must contact them.
The admin at NR seems to be a little questionable as we have had a post recently about another problem with regard to someones mortgage increasing by the dividends paid out in an IVA.
Please let us know how you get on
Regards

[debtdumb]

Hi and many thanks for that. I was sort of half thinking it could'nt be right for them to do this after agreeing our iva.

[Skippy]

Good luck with NR debtdumb, and please let us know how you get on x

[Andrew Graveson]

Hi debtdumb,

I understand that this is a systems issue at Northern Rock rather than anything sinister.

The mortgage and unsecured loan probably have the same account number and their systems automatically allocate any payments received against both. They can and will override it once your IP contacts them. We've had the same experience with debt management plans and Northern Rock have been helpful in putting things right.

[Adam Davies]

Hi Andrew
Do you usually include the NR Together unsecured loan in the DMP?
Regards

[Andrew Graveson]

Hi Andy,

We would normally include it.

Exceptions exist in some circumstances where the pro rata payment that would go to Northern Rock would be higher than the contractual payment. This can occur because these loans tend to be over a much longer term than most unsecured loans so the contractual payments can be comparatively small compared to other debts of lower value.

Where this is the case the contractual repayment would remain in place to Northern Rock and disclosure would be made to other parties of that fact.

This creates a benefit to other creditors (who get a higher monthly payment) and the client (who avoids the risk of a charging order on this debt and keeps the debt in good order).

I hear of a number of other debt management companies that will simply dress the unsecured loan up as being part of the mortgage (in the income and expenditure sent to other creditors) in all instances and effectively present a false financial statement.

[MelanieGiles]

This is a common fault at Northern Roc, but in my experience a quick phone call usually does the trick.

Some DMP companies are really naughty, aren't they Andrew. Thank goodness we have the DRF and the forthcoming regulation to sort out the cowboys!

[Andrew Graveson]

I'm on the email distribution list of a secured loans firm that has now turned their attention to debt management plans. Primarily they are sending these emails to mortgage brokers and financial advisors encouraging them to refer cases where individuals are struggling with debt.

The email is headed "We Are Debt Management Experts".
I know the Directors.....they haven't got the first clue about debt or debt solutions.

Between the clueless, the feckless, the cowboys and the crooks, regulation (or robust self-regulation) cannot come quickly enough to our industry.

[kallis3]

I couldn't agree more Andrew.

So many vulnerable people are being sucked into things which are not suitable for them. They are being advised by people who haven't got a clue, or who are just out to make a fast buck.

I think I probably know more than most of them!

[Andrew Graveson]

Hi Jan,

I can say with 100% certainty that you know more than most of them.

[kallis3]

Thank you Andrew!

Pity they can't be totally outlawed.

[debtdumb]

I.P was away on hols so took a while to get back to my e-mails regarding Northern Rock ,but rang me and explained what the prob was and its now sorted so mortgage payments taken for the loan included in the iva have been credited back to the mortgage.
NR said they hadn't seen the chairmans report from the iva so did what they did but all ok now.....phew was worried !!![:)]