Early Redemption Fees on Repossesion

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Nat West Home Loans is (was) the lender. Nat West foreclosed on our property, not because we did not have money, but becuase we were in dispute over and overdraft on our NatWest current account. At the time we were living overseas and had the property rented. Closing the current account made it so that we did not have UK bank account to pay the mortgage, and if you are overseas you can not open a new UK bank account.(Catch 22). Nat West solicitors gave us 14 days to pay the mortgage or lose the house. Given negative equity etc we chose to pay off the morgtage, wiring the funds to the bank soliciors. NatWest demanded many thousands of pounds in early redemption fees becase we had bought out the mortgage - rather than lose the house. My question is - was it legal to have to pay the redemption fees given that NatWest was foreclosing on the morgtgage. Can I fight them over this? Is there any case law? Any helpful advice appreciated.

-- Simon Cooper (simon89@attglobal.net), May 18, 2003


I suspect that NaffWest are acting within the letter of the law. The facts are that you paid off the mortgage early, rather than NaffWest foreclosing, and that you were unable to pay the mortgage because of your own actions (you were the ones who closed the current account and were so unable to pay the mortgage).

The reasons behind the action are not really relevant, at least in the eyes of the law.

It isn't clear from your question whether you are in the UK or not at the moment. If you're not in the UK then, ultimately, there isn't much NaffWest can do. They can demand all they like, but they won't be able to get any money out of you. However, you could end up with a credit record that's pretty dire and find you're unable to get another mortgage. That might not be a problem for you if you're not here.

I'd gladly stand corrected if anyone else knows different, but I think you're batting a sticky wicket.

-- Chris (chrsh@email.com), May 18, 2003.

To clarify, NatWest closed the current account (not us). Do you also mean that if we had let them forecolse, the early redemption fees would not have applied, and they could only recover the mortgage amount. If that were tur, we have a possible countersuit.

We are not living in the US, NatWest are suing us in the USA using a contingency fee based attorney, so being here is no escape.....

-- Simon Cooper (simon89@attglobal.net), May 18, 2003.

I can't see HOW NaffWest can sue you in the US - UK law doesn't apply outside of the UK.

However, I think you probably need specialist legal advice if they've taken to suing you cross-border...I am guessing this is a lot of money ?

-- Chris (chrsh@email.com), May 19, 2003.

The capital was 20,000 pounds, add years of punitive interest and you get a reasonable sum. How to sue across border is easy, just as there are debt collectors who work in country, there are collectors who work across borders. They give themselves the grand title of International Recovery agents. Legal advice here is that I am few options but to fight it out in court, which is why I asked the question is what they did in the UK legal. If it was illegal I can fight easier.

-- Simon Cooper (simon89@attglobal.net), May 19, 2003.

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