Can Pepper change terms agreed with BOSI ?

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dub_nerd

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A friend has a mortgage originally taken out with Bank of Scotland Ireland. The term was ten years interest only, followed by fifteen years of capital and interest payments. Having run into some difficulty with the looming repayment increase at the end of the I-O period, he agreed with BOSI to pay interest only for the full 25 year mortgage term. Obviously the entire original capital amount would then fall due. BOSI agreed this and confirmed in writing.

Subsequently, in the last 24 months, BOSI sold the mortgage to Pepper. Pepper are demanding commencement of capital repayments, claiming that the letter from BOSI does not form part of the original mortgage contract. Indeed, they say that anything not signed by both lender and borrower is irrelevant.

Can Pepper do this? The borrower has no possibility of making the higher repayments which are nearly triple the I-O amount.
 
If BoSI made an offer and your friend accepted it, then it's valid. If they wrote to her to confirm, then she is absolutely fine.

However, if BoSI offered your friend this agreement and she did not accept it, then I would say that it is not valid. So if the confirmation asked her to sign it and return it, but she did not do so, then I would say that she has no agreement.

If it's a Buy to Let, they might appoint a Receiver and your friend would need to go to court to get the Receiver removed.

If they classify your friend as being in arrears, they must complain immediately and go to the Ombudsman if it's not resolved.

Brendan
 
By the way, assuming it is a valid agreement, then she should raise an official complaint with Pepper and take it to the Ombudsman for the distress and worry caused.

She should also copy it to the Central Bank as Pepper is not supposed to be doing this.

Brendan
 
Thanks Brendan. The house is their PPR, not buy to let. The arrangement with BOSI was agreed and the letter is a confirmation letter. As far as I'm aware BOSI never asked for anything to be signed. However, according to Pepper the letter is not in the file that was passed to them so they initially disputed that it even existed let alone formed part of a contract.
 
It's very odd that BoSI would agree to make a loan interest only for the full term after the ten year interest only period.

I suspect that there was a misunderstanding here.

dub_nerd said:
The borrower has no possibility of making the higher repayments which are nearly triple the I-O amount.
Click to expand...

How does she intend to clear the balance in 12 years when it matures?

Brendan
 
The PPR is in significant positive equity (which may be what makes the mortgage attractive to Pepper). By the end of the mortgage term kids will be raised etc., so selling and downsizing becomes feasible.
 
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