Mis sold mortgage help

Johnson1980 · 11 October 2017 at 5:48PM

Firstly, thank you in advance for any help that you can provide and secondly please accept my apologies for how useless I have been to find myself having to write this question. As the title suggests, I believe that I have been mis sold my mortgage and shall go through our experience to see if anyone either agrees or can pinpoint where we have been mis sold and what we are to do next.

My now wife and I took out an interest only self cert mortgage in 2007 to purchase our first property, a property that we still own. We went through a broker who recommended self cert as I am self employed and interest only to keep the monthly payments within our budget, which at the time was £1200 per month. The broker mentioned that we would need to open an ISA to show the lender that we had a plan to save for the capital repayment but in reality paying our mortgage ate up so much of our earnings at the time that saving on top of this was never feasible. It was a two year fixed rate product and by the time the fix had finished the credit crunch was in full flow and after a month or two of higher payments, our monthly payments continually dropped as the libor rate dropped until we were paying around £700 per month, not too dissimilar to our payments now. We were set to borrow through Halifax but as we were into the application process my credit file caused us to be rejected by Halifax, despite my never having any credit issues, so the broker quickly arranged for us to go through a sub prime lender called rooftops. At the time we were 25yr olds moving out of home for the first time so i had no idea what sub prime meant and didn't even know what a credit file was. We signed all the paperwork and moved in to our first home and then a couple of months later I thought that I'd better find out about my credit file in case it caused an issue again. I went through Equifax and found out that I had a 59yr old from Hereford's financial products on my file as we had the same name but shared nothing else. A call to Equifax and the mistake was rectified with my file clean again and my credit score excellent, as it has always been.

Thus far I believe we were mis sold the interest only aspect with no real means of repaying the capital and an inappropriate sub prime product that the broker got a big commission for (I have the numbers in my paperwork) and we have always paid a higher rate because of. My reason for now taking an interest in oyr mortgage is that in our initial meeting with the broker we specified that we needed a portable mortgage as it was likely we would move at some point and the original Halifax mortgage that we were going ahead with was portable but the mortgage that we ended up with is not.

As I am still self employed and it is seemingly difficult to borrow money we are thus stick with no means to pay off the mortgage and no way of transferring the mortgage to a new property leaving us stuck where we are.

I would really appreciate any thoughts on if you agree I have a case for being mis sold this mortgage and if so what do I do about it? From searching the internet I believe that I need to contact the broker in writing stating why I believe that it was mis sold and what I want in terms of compensation but I have no idea where to start with what I should ask for. The commission paid to the broker was around £3500 but then we have been paying a higher rate of interest for ten years so how do I calculate that into any claim?

Any help would be so great as there seems like a mine field of companies trying to help claim for some sort of mis selling but if it's simple enough I'd rather fix it myself.

Thrugelmir · 11 October 2017 at 6:00PM

You are party to the transaction. Whatever your broker may have done, it was you that signed the paperwork. In the process the declaration of material facts.

Given that interest rates have fallen considerably 2007. Have you made any attempt to overpay your mortgage to reduce the debt owed. While it may not solve the issue of repayment entirely. This would have improved your financial position considerably. However small the amount.

IAmWales · 11 October 2017 at 6:03PM

Not missold, mis-borrowed.

You knew you needed a repayment vehicle, you chose not to have one.

You knew you were stretching your budget but chose to go ahead irrespective.

You had all the relevant information, including the rate of interest, in writing.

You were offered a product that suited your needs at the time.

dunstonh · 11 October 2017 at 6:16PM

My now wife and I took out an interest only self cert mortgage in 2007 to purchase our first property, a property that we still own.

This is important. This indicates you self certified that everything you said on the application was the truth.

Interest only doesnt matter as the rules on interest only changed after that date and interest only was acceptable at that time (as can be read by all the ombudsman rejections by people trying to complain that interest only was wrong).

Thus far I believe we were mis sold the interest only aspect with no real means of repaying the capital and an inappropriate sub prime product that the broker got a big commission for (I have the numbers in my paperwork) and we have always paid a higher rate because of.

Interest only is not a missale.
Sub prime could be but you confirm yourself on two occasions that there were issues that led to rejection. It can take months to get a record clean and your wording suggests a hurry to borrow.

Once your record was cleaned, you were free to move to a prime lender at that point. Why didnt you?

From searching the internet I believe that I need to contact the broker in writing stating why I believe that it was mis sold and what I want in terms of compensation but I have no idea where to start with what I should ask for.

These internet searches should also have told you that missold mortgage complaints are rarely successful. The ombudsman generally compares the position you would have been had you not borrowed in the first place and rented. So, any property value gain works against you. Plus, you have had a long period of very low-interest rates. Typically, this means much cheaper than renting. So, you are not actually worse off. So, no compensations payable even if missold.

There is also the issue that if you claim information on the application is wrong then you are admitting to mortgage fraud as you signed to say it was correct. That can see you being blacklisted by lenders as there is a mortgage fraud register.

Any help would be so great as there seems like a mine field of companies trying to help claim for some sort of mis selling but if it's simple enough I'd rather fix it myself.

The claims companies active in thie area are not many. Those that are tend to either have an upfront charge or bring one in later on. Typically they say they will look at the case free o charge. Then they say you have a case but they need £x to pass it to their solicitors (who are not solicitors in reality). Sometimes they do that a couple of times to squeeze more out of you and then it either goes quiet when the claims company goes under or your complaint fails and you end up having paid the claims company but nothing to show for it.

To make the whole thing easier, how much is your property worth now compared to what you bought it for? If that figure is in surplus (i.e. you bought for £150k and its now £200k, then you wont get compensation as you are £50k better off).

Johnson1980 · 11 October 2017 at 6:46PM

The property has gone up in value but we are unable to move the .mortgage onto another property so our only option is a new mortgage under more difficult borrowing conditions. Also, I'm not sure how relevant this is as bad advice is bad advice, regardless of how lucky the broker is that the housing market has gone up.

I get the idea that I signed the paperwork so i am ultimately responsible but does that argument not allow brokers to pretty much do and say what they want without any comeback? I asked him for a mortgage that could be transferred to another property and was affordable for us. The initial Halifax product was also £1200 per month but was a repayment mortgage but we've ended up with a mortgage that cannot be transferred and is more expensive. In hindsight we were naive 25yr olds that I agree were happy to sign anything to get what we wanted but then surely a broker's responsibility is not just to give us what we want if we do not really understand what us being offered.

IAmWales · 11 October 2017 at 6:52PM

25 isn't really an age where you can claim naivety.

Brokers cannot do and say what they want. But your broker did not lie to you, he found a product that matched your circumstances and your budget.

Even where a product is portable there's no guarantee you would be allowed to port it. The lender will still assess your financial situation, effectively the same as a new mortgage. If you can't get a new mortgage, it's unlikely you'd have been permitted to port your existing one.

dunstonh · 11 October 2017 at 7:03PM

The property has gone up in value but we are unable to move the .mortgage onto another property so our only option is a new mortgage under more difficult borrowing conditions.

Its not your only option. The other is to sell up and move to rented.

Also, I'm not sure how relevant this is as bad advice is bad advice, regardless of how lucky the broker is that the housing market has gone up.

Bad advice is bad advice but if you have profited from it, then no redress is payable. Financial redress is to put you in the position had the transaction never taken place. That includes the positives and the negatives being taken into account. Equity gain in the property value is included.

I get the idea that I signed the paperwork so i am ultimately responsible but does that argument not allow brokers to pretty much do and say what they want without any comeback?

You are not being very persuasive about whether the broker did anything wrong or not.

1 - interest only mortgages were allowed then. Just look at the FOS decisions from people trying the same complaint as you. They reject them as being acceptable in that era and not against any rules at that time.
2 - You did have adverse data on your file. It prevented you from getting a prime mortgage. So, you had a choice. Do not proceed with the mortgage whilst you spend the next 6 months finding out the problem and getting it removed or go sub prime. The broker wouldnt know what the data is as they are not told. You went with sub prime.

but then surely a broker's responsibility is not just to give us what we want if we do not really understand what us being offered.

Any missale allegation is based on the rules and regulations at the point of sale. You cannot apply todays MMR rules to a 2007 sale. They would apply 2007 rules. And effectively, the broker did their job. You asked for a mortgage. They got you one. They are required to warn you of risks and this is done via the KFI document (again, look at FOS decisions and you will see them referring to that frequently).

If you dont understand, you can seek legal advice or ask the broker.

AnotherJoe · 11 October 2017 at 8:02PM

Johnson1980 wrote: »

The property has gone up in value but we are unable to move the .mortgage onto another property so our only option is a new mortgage under more difficult borrowing conditions. Also, I'm not sure how relevant this is as bad advice is bad advice, regardless of how lucky the broker is that the housing market has gone up.
.

So you’ve made a load of money that you otherwise wouldn’t, had you not lied and got a mortgage ? What sort of recompense would you expect for that? Removal of that profit ?

Johnson1980 wrote: »

The property has gone up in value but we are unable to move the .mortgage onto another property so our only option is a new mortgage under more difficult borrowing conditions.
.

So Your complaint is that you expect the broker to be able to see ten years into the future and work out what sort of mortgages will be available then ?

Johnson1980 wrote: »

I asked him for a mortgage that could be transferred to another property and was affordable for us. The initial Halifax product was also £1200 per month but was a repayment mortgage.

Was that the product you couldn’t have due to your financial circumstances ?

Johnson1980 wrote: »

I get the idea that I signed the paperwork so i am ultimately responsible

I don’t think you do.

worried_jim · 11 October 2017 at 8:07PM

If you had rented all this time instead of buying you'd have probably spent more money, instead you've paid less and you have a shed load of equity. Winning.

Johnson1980 · 11 October 2017 at 8:46PM

Wow, tough crowd. Am guessing that most of you are mortgage brokers then.

I was just after some opinions on the advice that I received and the consensus seems to be that nothing wrong was done by the broker. That's fine by me as the whole point of my question was to answer this.

The amount of money that the property has made and the amount of money that I have saved in rent by buying the property is uttey irrelevant to the quality of advice that I was given, which was my question. The broker that I used seems to have not mis sold me anything or done anything wrong but that doesn't mean that he did a good job by just getting me any mortgage.

AnotherJoe · 11 October 2017 at 9:05PM

LOL. Nope not a broker. Speaking for myself anyway.
What i see is someone whose substantially better off because of lies they made (being pedantic, fraud) 10 years ago, looking to gain from being better off and also getting themselves (from what I read here) put onto a register of people who lied about mortgages. So if you think it’s tough now getting a mortgage why do you think it would improve ?

What you’ve missed is multiple points, all made to you several times.

If there was misselling, it was your fault for lying.
If there was misselling the compensation you are due is tied to put you back where you would have been. But you’ve made a profit so even if misselling was established you won’t get anything.
If you put this complaint forward you will be shooting yourskef in the foot. No compo, added to a register of liars.

Mis sold mortgage help

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