BN66 - Time to fight back: Continued

[StellaFan]

A small part of my potential exposure was to be serviced by a PEP/ISA type thing but that has taken a hammering in recent weeks. Uh oh......

[elpinar]

yes...the FSA protection is 35K...for joint accounts, you have 35k each...that is, 70k...

well, thats what it said in the Daily Mail this morning, so it must be true!

well - i asked the Financial Services Compensation Scheme (FSCS) another possibly more poigant question - if you have 150k mortgage offset by 150k (so net 0) and the lender goes down - are you net zero or do they give you the 70k thats protected and then only give you back the whatever in the pound for the extra 80k (so do they treat the debit and credit separately) and the answer was ....

' The position of building societies and banks is not the same under insolvency law, so that automatic set off may not apply on the insolvency of the building society, whereas it would be automatic on the insolvency of a bank.'

i actually have a longer answer if anyone wants me to post it .... but not the answer i expected. I then rang my lemder (Coventry) and got told twoce that the netting would not happen and once that it woudl - so I have no idea

[Emigre]

well - i asked the Financial Services Compensation Scheme (FSCS) another possibly more poigant question - if you have 150k mortgage offset by 150k (so net 0) and the lender goes down - are you net zero or do they give you the 70k thats protected and then only give you back the whatever in the pound for the extra 80k (so do they treat the debit and credit separately) and the answer was ....

' The position of building societies and banks is not the same under insolvency law, so that automatic set off may not apply on the insolvency of the building society, whereas it would be automatic on the insolvency of a bank.'

i actually have a longer answer if anyone wants me to post it .... but not the answer i expected. I then rang my lemder (Coventry) and got told twoce that the netting would not happen and once that it woudl - so I have no idea

Netting is a massive subject that the banking and investment banking industries have been trying to resolve for years. The short answer is very simple. If your terms of business do not state it do not rely on it. In the event that a liquidator is called he will "cherry pick" what he settles and does not settle. In short he will call in your mortgage (if he cannot sell it - in this marketplace unlikely) whilst making you an unsecured creditor for your offset accounts. Your only protection will be the £35k/£70k.

Check your wording and seek clarification in writing.

[Hawkwind]

Judging by the recent postings I think I'm getting an answer to my question whether or not it is good idea to redeem the offset mortgage or not.

[DonkeyRhubarb]

I think HMRC better get their skates on. If the financial situation gets much worse we might not have any assets left to collect!

[elpinar]

Judging by the recent postings I think I'm getting an answer to my question whether or not it is good idea to redeem the offset mortgage or not.

I think the answer is - is you have an offset mortgage vs ctd - you cant loose your money in a ctd (as it were) but you could in an offset mortgage UNLESS your offset mortgage is with a bank in whcih case byu law they will net. So anyone wiht an offset moetgage over 35/70k is taking a risk

[Emigre]

I think the answer is - is you have an offset mortgage vs ctd - you cant loose your money in a ctd (as it were) but you could in an offset mortgage UNLESS your offset mortgage is with a bank in whcih case byu law they will net. So anyone wiht an offset moetgage over 35/70k is taking a risk

Found this link - it appears that not even the FSCS are sure of the position...

http://www.fool.co.uk/news/property-...mortgages.aspx

Again, look at the terms of your contract. Some will work but some won't.

[TheGadgetMan]

Jeez...this is getting too complicated for my tiny brain to deal with...

...my offset mortgage is with Intelligent Finance...I'm sending my money off for my CTD tomorrow morning...

my money is safer in a CTD with HMRC, isn't it?...please tell me its so...?

[DonkeyRhubarb]

Jeez...this is getting too complicated for my tiny brain to deal with...

...my offset mortgage is with Intelligent Finance...I'm sending my money off for my CTD tomorrow morning...

my money is safer in a CTD with HMRC, isn't it?...please tell me its so...?

A CTD (like National Savings or Gilts) is safer than having your money in a bank or building society.

I've got a savings account with Intelligent Finance (owned by HBOS ) but the amount is below the £35k safety net.

As an aside, it's quite funny how risk averse we all seem to be and yet we joined a scheme like MTM.

[TykeMerc]

As an aside, it's quite funny how risk averse we all seem to be and yet we joined a scheme like MTM.

That irony hadn't missed me.

Slightly daft really since i nearly joined MontP some years ago and didn't, but in other matters I'm a bit of a risk taker.

As you said if HMRC don't pull their fingers out it's possible that some of their targets won't have any appreciable assets for them to target in the current climate.