Fixed-Rate penalty

Discussion in 'Mortgage arrears & negative equity case studies' started by sojourn2015, Dec 5, 2015.

  1. sojourn2015

    sojourn2015 New Member

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    I had a mortgage around 443,000 euros in 2008 and took a 10 year fixed rate at 5.44% with around 22 years remaining thinking this was a good thing at the time with EBS. I was self-employed until 2010 and fell into arrears, while my partner and I managed to keep some payments going, although not the full amount since 2010, we are summons to appear in court on the 18th Dec 2015. I received a Solicitors letter in February representing EBS asking for the full sum of 485,000 euros outstanding including arrears within 7 days or expect judgement against me. There was no mention of the fixed rate penalty in this letter? I was aware there be a penalty but was in shock when I rang EBS to ask why it was not included in the final Solicitors settlement letter. They were not aware of the error and said it would be taking into account at a later stage, the penalty fee is 69,000 euros approx. Am I going to be forced to pay this enormous penalty after I sell my home and pay the 485,000 requested in the earlier solicitors letter. I've been a honest individual and out of clarity I wanted to know why the penalty was not in the final solictors letter and they said it was a error and left out by mistake, have I opened up a can of worms for myself?
     
  2. Brendan Burgess

    Brendan Burgess Founder

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    31,178
  3. sojourn2015

    sojourn2015 New Member

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    3
    Thanks for the information, but we are beyond filling in financial statments etc. Just more point not mentioned in earlier blog we were sold this 10 year fixed rate product with very little advice and the consequences (default fee) if we failed to keep up payments.
     
  4. sojourn2015

    sojourn2015 New Member

    Posts:
    3
    Fixed rate formula

    I am wondering if it is possible to get a fixed rate formula in Numerical format, the bank I had mortgage with refuses to give me a breakdown and just sends the Definition of terms used in the formula

    Example

    (A) amount- The amount being repaid early or the amount being converted to a varible rate or another fixed rate.

    Original cost of funds- The cost of the funds from bank for the fixed rate period at the time the fixed rate period commenced.

    cost of funds for the fixed rate period remaining- Fixed rate period. The cost of funds used will be as of 5pm the day previous to the request to calculate the early redemption charge.

    (U) remaing term in days- Remaining number of days left before the fixed rate is due to expire, divided by 365

    (D)difference in cost of funds-The difference between the original cost of funds and the cost of funds for the fixed rate period.


    I have paid off Mortgage in full and interest and redemption penalties for breaking fixed rate term

    I had 547 days remaining from 3,650 days (10 year fixed) (U) 1.5 by my calculations

    I am really lost to work out (A) and (D)

    Redemption penalties approx 33,000.00 euro

    Is there anyone like the financial ombudsman that could help me retrieve or request the information for me?