Tanager is not correcting the mistaken arrears calculations properly

[Brendan Burgess]

For more information: Tanager changes the way it calculates arrears and halts some legal cases

I have read two of the letters sent to customers of Tanager.

First of all, they make this appear to be a change in policy. "We have chosen to make this change" It is not a change in policy. It is the correction of an error.

Secondly, they are backdating it to when Tanager bought the loans from BoSI which was in December 2013.

In most cases the arrears arose long before December 2013. So Tanager should be correcting it to when the mistake was first made.

I gather from some of the court cases I have seen where they are still pursuing the legal action, that the arrears have been reduced by about 30%. But if that is only since December 2013, the full correction should be a lot higher.

Brendan

 

[Browner]

Brendan would the net amount outstanding still remain the same?
Would this mean the arrears amount would be reduce further?

 

[Brendan Burgess]

Yes, the balance on the mortgage does not change. It is just the calculation of the repayments and the arrears.

Yes, the arrears should be even lower than the revised amounts they are showing now.

Brendan

 

[IdesofMarch]

If Tanager have only recalculated the miscalculations regarding repayments since the time they bought the mortgages, in April 2014, then, if you were in arrears predating this time, (in other words with BOS Plc) the arrears are still overstated. Tanager have to correct the arrears miscalculation since the inception of the loan. Tanager may be of the assumption that they only have to rectify the arrears from the date that they purchased the mortgages. This is incorrect, as section 40 of the CCA 1995 states:

Matters Arising During Currency of Agreements

Assignment of creditor's or owner's rights.

40.—Where a creditor's or owner's rights under an agreement are assigned to a third person, the consumer shall be entitled to plead against that third person any defence which was available to him against the original creditor including set-off.

If Tanager do not furnish the borrower the correct figure on the arrears outstanding (if any), there is no way they can obtain a possession order from a court in Ireland, indeed the CCA 1995 states that you can use this as a defence against Tanager.

 

[RedOnion]

In most cases the arrears arose long before December 2013. So Tanager should be correcting it to when the mistake was first made

Hi Brendan,
I haven't been close to the Tanager issue, but I've seen similar elsewhere.
If I understand it correctly, it's not the initial arrears creation that are incorrect, but only when the monthly repayment amount is recalculated on an account which has arrears (rate or term change)?
I thought it was only from when they transferred that this issue arose?

 

[Brendan Burgess]

I thought it was only from when they transferred that this issue arose?

Hi Red

Interesting and I don't know for sure.

I had assumed that the problem originated with Bank of Scotland and got carried over.

This tends to suggest that Tanager itself was doing it properly for other customers.

"We have chosen to make this change to align the practice with that of the other loans that we service."

I would have thought that the letter should have been clearer if it were a Tanager problem.

"When we took over the loan, we calculated the arrears in a different manner from the way BoSI calculated them.
BoSI were doing it correctly.
We are now backdating it."

However, your understanding would explain why they are just going back to the date of the takeover and not to BoSI's days.

Brendan

 

[IdesofMarch]

Hi Brendan,
I haven't been close to the Tanager issue, but I've seen similar elsewhere.
If I understand it correctly, it's not the initial arrears creation that are incorrect, but only when the monthly repayment amount is recalculated on an account which has arrears (rate or term change)?
I thought it was only from when they transferred that this issue arose?

RedOnion,

No, you don't understand it correctly, the automatic capitalisation of arrears on an interest rate decrease or increase was a systems error that Tanager inherited from their predecessor, BOS Plc. (the BOS system was ghosted across to Tanager when they purchased the mortgages) If borrowers were in arrears prior to the takeover date, the BOS system was carrying out the same miscalculation, so therefore the arrears quoted, at the takeover date, were also incorrect. This is why Start Mortgage (who similarly bought BOS mortgages) stopped all possession cases, because it is not as simple as Tanager thought to recalculate the arrears balance in full from the inception of the loan.

 

[IdesofMarch]

Hi Red

Interesting and I don't know for sure.

I had assumed that the problem originated with Bank of Scotland and got carried over.

This tends to suggest that Tanager itself was doing it properly for other customers.

"We have chosen to make this change to align the practice with that of the other loans that we service."

I would have thought that the letter should have been clearer if it were a Tanager problem.

"When we took over the loan, we calculated the arrears in a different manner from the way BoSI calculated them.
BoSI were doing it correctly.
We are now backdating it."

However, your understanding would explain why they are just going back to the date of the takeover and not to BoSI's days.

Brendan

It is well known that the arrears miscalculation was a problem inherited by Tanager from BOS (Lloyds) and is not a specific Tanager issue.

See link:


[broken link removed]

 

[IdesofMarch]

Regarding the mismanagement of borrowers arrears

What will Lloyds refund?
The group has agreed to refund:

• All fees charged to customers for arrears management between 1 January 2009 and January 2016
• All fees for broken payment arrangements (where someone failed to keep up with their repayment plan) between 1 January 2009 and January 2016
• Any unfair legal costs that were applied during this period
• Compensation for distress and inconvenience
• Consequential losses such as any extra bank charges as a result of not being able to keep up with the repayments
• Any interest if applicable

On top of this they have set aside a further 400 million sterling provision for this particular debacle.


Tanager, maybe the CBI needs to look at these issues afresh with regards to your company's response to them. Your response falls well short of the mark as oppose to those of Start Mortgages.

 

[Brendan Burgess]

Hi Ides have you a link to that?

Brendan

 

[IdesofMarch]

BB,

The site will not allow a link to be sent as it is protected.

However, here is a newspaper article that refers.

Lloyds, Halifax and Bank of Scotland to pay customers £283 million compensation over mortgage arrears

By , Senior News Reporter

27 Jul 2017

 

[IdesofMarch]

What should impacted customers do now, sit still and hope Tanager fix it, make a complaint to the Central Bank, or tell the registrar on the next court date that the stated arrears are still incorrect ?

Phone Lapithus and explain the situation to them. The FCA in the UK is akin to our Financial Ombudsman, they have already adjudicated on the matter, which will add weight to your case. If you do not get an adequate response from Lapithus within a reasonable time frame, then send in a complaint to the Ombudsman describing the issues particular to your case. If a bona fide complaint is lodged with the Ombudsman's office, the Circuit Court seem to take a wait and see approach in possession cases, before allowing the individual case to proceed to hearing.

 

[Brendan Burgess]

Tanager has written the attached explanation of their error which appears very sympathetic but isn't very clear.

Brendan