Couple Forced to Pay Mortgage Twice After Law Firm Collapse

A couple who ended up paying their monthly mortgage twice, after the law firm they used to remortgage went bust, have described the stress as "horrendous".

In January, solicitors told Gabriella and Kurtiss Smith the mortgage on their home in Barry, Vale of Glamorgan, had been successfully moved from Halifax to Nationwide – only to be hit by payment requests from both, following the sudden closure of PM Property Law.

They had to borrow money from family and friends to cover the £2,000 monthly payment for two different providers. But, just a day after BBC Wales News contacted the banks for a response, Halifax said it had "put this right" and "refunded the additional payments".

Gabriella and Kurtiss are among hundreds of customers who were affected by the sudden closure of PM Law Group, the parent company of the solicitors they used to remortgage. The company is now under investigation by South Yorkshire Police and the Solicitors Regulation Authority (SRA), who are looking into suspected fraud.

The couple bought their first house together five years ago, overlooking the popular beachside resort at Barry Island. On 23 January they were sent a 'Final Completion Statement' for their remortgage by PM Property Law, stating the transfer of funds between new provider Nationwide, and old provider Halifax bank had been completed.

But on 5 February the couple were shocked to receive a message from Halifax saying they had missed a payment. After contacting both banks, they were informed by Nationwide that PM Property Law had closed before completing the remortgaging deal. Funds that should have been transferred from one party to the other had allegedly not been passed on by solicitors, meaning both banks had still had an open mortgage account for the couple.

"I just instantly thought 'where is that money and what's happened to it?'" recalls Gabriella, 30. "You put your trust in solicitors to deal with things like this. We just felt instantly betrayed, and thought 'why have they done this?'"

PM Property Law's parent group, PM Law Group, had shut abruptly at the beginning of February, leaving hundreds of clients in the lurch. The SRA said it was investigating a "sophisticated suspected fraud", involving "the improper removal and misuse" of almost £40m in client funds and working through "hundreds of further claims" with over £16m having been paid out so far from a compensation fund and money previously held by PM Law.

Another £5.5m is expected to be paid out, though claims will now be prioritised "based on the risk of harm by those making them".

Gabriella and Kurtiss have had to borrow £6,000 from friends and family to continue paying both providers to avoid the risk of repossession. The SRA said they will not be refunded for the additional legal fees.

"It's been horrendous, so stressful," she said.

However, on Wednesday Halifax confirmed it had resolved the issue. "We are very sorry that we did not resolve this sooner," said a spokesperson. "We have a process to support customers affected by the collapse of PM Law and should have included Gabriella and Kurtiss' mortgage in it.

"We've now put this right, closed their mortgage account, and refunded the additional payments they made.

"We'll also give them a payment reflecting the distress and inconvenience caused," the spokesperson said.

Nationwide Building Society said they had also encountered issues with customers of PM Law. "We later became aware of the closure of PM Law and, like many lenders at the time, were awaiting an update from the Solicitors Regulation Authority," said a spokesperson. "This was relayed to the customers on 5 February."

The SRA said: "Many of the former clients [of PM Law] faced significant upheaval at a stressful time, so we have been determined to provide as much support as possible."

PM Law has been asked to comment.