In October 1996 I took out a repayment mortgage with the Nationwide for a sum in excess of £100,000. Monthly payment was in the order of £1000 depending on the current interest rate. The mortgage has a 5 years tie-in period which expires this early October. Last winter I could not make payments due to cash flow problems which I was unable to resolve.I have made regular payments this year except for May when again I had a problem. I explained to the Society that as I was in my 50's and was fortunate to have considerable equity in my home it would resolve matters if they converted the mortgage to interest only as it was my intention to move in the near future to a smaller house. They stated they would only consider this after the arrears which are in the order of £5000 if you include this months payment are paid back first,so no help there. I have to attend court next month as they have issued a summons for repossession. To resolve the matter and considerably reduce my monthly outgoings to a manageable level I have an agreement in principal from another lender. The new mortgage will consolidate a secured loan (which is not in arrears). Valuation has taken place and I am informed everything is in order and the formal offer will be sent to me in the next week or so. I explained all of this by letter to the Nationwide and asked for a redemption statement on the premise that I could redeem their mortgage at the end of August. The statement they sent includes nearly £5000 of early repayment penalties. I again wrote and asked if they would waive the penalty as at August end there would be about 40 days to go of the 5 year period, failing that I suggested the penalty be pro rata'd but they said no. I trust I am correct in assuming the penalty does relate to the tie-in period. So I feel I am a Catch 22 situation, the Nationwide want their money and I will be in the position to give it all to them in a month. But if I do this I incur all the early repayment penalty charges. Is it reasonable of them to demand such an amount with so little time left of the tie-in period ? Should I struggle on to make the July/August/September payments to them and redeem in October when the tie-in ends. This will be tough, the best I can do is cover the interest. What do you think the Judges action will be when I attend court next month? To conclude, one other thing has added to the feeling of humilation in all this. One legal notice sent by the Nationwide which summarises the forthcoming legal proceedings was addressed not to my wife and I by name but to " The Occupier". With our luck the postman put it through our next door neighbours letterbox in error. They opened it without realising, so now they know our situation. What price privacy, I feel so embarrassed everytime we see them now. Any help or advice would be gratefully received. Robert

-- Robert Walker (Stroller42@aol.com), July 29, 2001

Answers

I would suggest going to see a good solicitor over the last, and plain, invasion of your privacy. Re your main points, strictly speaking they are in the right, but I imagine if you actually got to see a manager in the local branch they might be embarrassed into backing down. Judges are unlikely to award possession where the holder has plans to repay the arrears provided the plans are reasonably likely to succeed - as yours are [Ask a solicitor about the Norgan rules].

-- (bluemoon@mcfc.co.uk), July 29, 2001.