My mortgage company is taking the piss advice please

[Hawaiiinthemorning]

Hi I’ve had my mortgage for 15 years, I got it on a self certification as self employed at the time. About 5 years ago I had to claim benefits but have always managed to pay it, sometimes in arrears but only by a month or so. It’s a very small mortgage.

Last year I had an accident and have received compensation via a solicitor and it has come in several payments, I have paid lump sums off and my mortgage company asked for proof of these funds, fair enough.
So I sent a copy of the solicitors letter but apparently this wasn’t enough, they wanted my bank statement, I scrubbed out all transactions that weren’t relevant and sent it clearly stating date, amount and solicitors name.
They said they wanted to see my entire statement I told them to fuck off, in different words!
They eventually accepted the money and credited to my account.
Now I’ve received a cheque from a very well known insurance company and I’ve made another payment.
Can’t ding the accompanying letter but I’ve photographed the cheque stating who it’s from, my name and date and they’re saying it’s not enough evidence?!?
Also after paying several thousand extra last year they have reduced my monthly payment so I’m still paying mortgage for the original term.
I expected it to be less time, are they allowed to do this?
Thank you for reading, hope I’ve covered everything and really hope someone can advise.

I had awkward mortgage lender, they wanted to charge me a different amount to close the account than they had stated at the beginning - fortunately id kept the letters. I did though reduce the mortgage amount to a very paltry amount and state I was willing to continue to pay over the term and this was likely to cost them more in administration fees over the years than the mortgage was actually worth - think a few pounds a month for several years. they swiftly waived all fees and and the mortgage was paid off.

so yes you're correct about being deliberately awkward for the sake of it as they can change their minds when they realise they'll be out of pocket and due to you being as obtuse

I agree with the others, but also, it really
Is in your interests to sort this quickly, as if it is a significant sum (and it sounds like it is, to trigger money-laundering provisions), then each day it is not in your mortgage account, you are paying more interest than you should.

If you can’t find the letter, can’t you contact the insurance company or solicitor or whomever and have them send/email you another copy from their file?

Finally, I agree with others that if you got this mortgage 15 years ago, it would be a very good idea to check if you are still on a competitive interest rate, and if not, remortgage. In doing so, you could reduce the term of the loan as well.

If you haven't applied for mortgage in 15 years and previously it was self cert then you won't be aware of the massive changes in banking regulations. Self cert mortgages were amongst the causes of why banks had to go back to really strict lending criteria as well as money laundering.

Not every transaction will be checked but they have to show they monitor so that's why there is inconsistency.
It like fraud prevention, not every transaction is stopped .

The banking world has changed so be fortunate you don't need a mortgage now as you have to supply vast amounts of personal financial data and your previous late payments would be taken against you.

I think everyones covered the reasons for proof but regarding the term you'll need to change your mortgage for the term to change.

It makes the lender less money if you shorten the term so you always need to specify that unless you have a standing instruction.

If you think this is bad, my first annual bonus triggered money laundering questions when it was paid into my account, despite the fact it was paid from the same reference number that had paid my salary every month for the last 8 months!

I should also state the financial ombudsman is currently investigating them as they believe their conduct hasn’t been favourable to me.
From years ago, nothing to do with this matter.

@Hawaiiinthemorning

I’ve sent all the evidence they need, it’s like they’re intentionally making it difficult

They don't decide what evidence they need, the FCA does. Just send them what they've asked for.

OP you would have been better off banking the extra money and upping your direct debit to a set overpayment every month.

@BernadetteRostankowskiWolowitz

OP you would have been better off banking the extra money and upping your direct debit to a set overpayment every month.

Exactly.

You’ll be lucky if they agree to remortgage at the end of the current rate.

Stop being difficult and give them that they ask for.

It’s star and practise to reduce the payment not term unless you request otherwise.

OP, you may not think certain information is relevant but the regulator and the bank's compliance, risk, and financial crime teams absolutely do!
I can tell you that the more reluctance you show, the more flags will be added to your account. You risk being off-boarded as a customer and referred to the police as a potential fraudster or money launderer.
The term of your mortgage is a separate issue and one you should have discussed when you were making overpayments.
Source: I work in a very large UK bank.

It's up to the bank, not you, to say what they need to verify it's not money laundering.

Why haven't you got the letter that came with the cheque?

Maybe ask the insurance company if they could please send you a copy.

It’s a completely normal request from them. I had to provide 3 months full bank statements when taking out my mortgage a couple of years ago.

Regarding the overpayments, they won’t use them to reduce the term unless you specifically ask them to. They’ll then send you something to confirm the new end date which you sign and send back.

Your payment history will show as erratic, self cert, arrears and then lump sums which may not be consistent with your income. As people have said, it’s money laundering regulations, the systems inbuilt rules will have flagged it. As other people have said, if you want to reduce your term then write and tell them.

If you are looking to change the term length and keep the monthly sum the same, be aware that the mortgage company could change a fee to make an amendment and go through an affordability check.

*charge a fee

I've never been asked for any evidence for overpayment on my coop mortgage. Not been in arrears though, maybe that makes a difference
I have been asked and I've never been in arrears.
I paid off my mortgage last year but I paid £17k one month and another month £13k the term initially was kept the same but I asked them to reduce the term, which they did. They asked for proof. I just showed them a statements from my savings account so they could see the money going in from my wages and no where dodgy.

No angst or taking the puss needed!

If a bank or law firm etc handles funds from a client and those monies turn out to be prceeds of crime, the banker/lawyer can go to prison for 10+ years for not realising what was happening.

It sounds like your past overpayment behaviour has made them a little concerned, and so they have increased the amount of detailed evidence that they want to see, so they can check exactly where your money is coming from.

If you don’t gove them what they ask for and they are genuinely concerned, then their next step would be to report you to police as a suspect in possible money laundering. This is how lawyers/bankers protect themselves from jailtime, I’ve made such a report to the police myself where I was 99% sure the client’s money was fine but 1% a bit worried I was wrong.

Up to you what you do OP but I would suggest that your top priority should be reassuring the mortgage company by showing them whatever they want to see about your finances. And don’t judge the bankers for not wanting to go to prison for not understanding your finances

Not sure a photo of a cheque passes the anti-money laundry checks, whether or not those are amplified as well due to your self-employment. Your idea of proof may be completely different to their idea of proving these funds are from insurance payouts.

Could you potentially move mortgage companies and put these new funds into equity on the house? Taking on a smaller mortgage.

Or are you able to get a savings account with an interest rate higher than your mortgage? I'd be tempted to put the funds into that.

I work in this area.

1. If the payments are over a certain amount they will be required under AML to check where this money came from, and cheques can be produced fraudulently. If they do not they can be fined.

1. If you have had mortgage arrears in the last six years you are now unlikely to be able to move mortgage lenders unless it was only a small number of payments and towards the back end of six years ago

1. Your complaint will not impact on how you are being treated now

1. As they are currently looking at mortgage prisoners you may be in a position to switch to a more favourable rate (unless you're in a fixed rate) with the same lender

1. Most lenders know how frustrating this is for people but they have no choice but to request this information

*Also after paying several thousand extra last year they have reduced my monthly payment so I’m still paying mortgage for the original term.
I expected it to be less time, are they allowed to do this? *

It is indeed standard practise to reduce the monthly payment and keep the existing term of the mortgage. It's not difficult, all you need to do is ask them to maintain the monthly payment and reduce the term.

You do need to ask them to do this. How would they know otherwise?

I understand where you're coming from but agree you need to show them what you can of what they ask for. If something seems completely bizarre and irrelevant then engaging in a discussion about what information is needed and why can be reasonable though.

My sister and I had that when our mother transferred money by way of early inheritance into a joint account for us to invest from. At one point we were being asked for detailed earnings and outgoings including both our husbands' information. None of which would have shed any light on the origins of the money! But once I explained back a bit further they were able to tick a box and say it was fine,