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Mortgage Indemnity Guarantee (MIG) insurance
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# 1
The Pastmaster
Old 30-09-2009, 7:27 PM
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Default Mortgage Indemnity Guarantee (MIG) insurance

When I took out my mortgage 18 years ago I had to pay 1.5% (added to the loan )to pay for this insurance in the event that I ever defaulted on the loan - but any payout would go to the building society. It was NOT an option - no pay MIG - no mortgage. In the light of all the PPI misselling scandal should I be seeking this money (plus the interest) back from the BS and what likelihood of success would there be ?
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# 2
luckyfool
Old 30-09-2009, 7:57 PM
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The short answer... no.
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# 3
The Pastmaster
Old 30-09-2009, 8:21 PM
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Thanks......any particular reason why not ? I am just curious
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# 4
opinions4u
Old 30-09-2009, 8:25 PM
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Quote:
Originally Posted by The Pastmaster View Post
Thanks......any particular reason why not ? I am just curious
Because the insurance doesn't cover you - so hasn't been mis-sold to you.

PPI was mis-sold to people who didn't need it. Your lender required the MIG to give you a mortgage.

Quote:
It was NOT an option - no pay MIG - no mortgage
Out of interest, did you benefit from growth in house prices?

Last edited by opinions4u; 30-09-2009 at 8:59 PM.
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# 5
The Pastmaster
Old 30-09-2009, 8:30 PM
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Agreed, but I paid for it - and had no choice.
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# 6
The Pastmaster
Old 30-09-2009, 8:33 PM
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Quote:
Originally Posted by opinions4u View Post
.

Out of interest, did you benefit from growth in house prices?
I bought my house as a place to live - not as an investment vehicle. Have lived in the same place for 18 years and (if I`m spared) at least another 18.
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# 7
opinions4u
Old 30-09-2009, 8:41 PM
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Agreed, but I paid for it - and had no choice.
You had the choice not to take the mortgage from that lender or not to buy the house at all. Or put down a 25% deposit (or whatever was needed) to avoid paying for it.

At the end of the day the terms on which the lender chooses to do business were laid down in black and white. The insurance was part of the cost of borrowing and you knew about it up front.

Typically a lender's policy was to lend no more than 75%. If they agreed to increase their risk above this they required an MIG policy to be purchase for them at the borrower's expense. In much the same way most lenders require a valuation prior to agreeing a mortgage and have the cheek to charge the applicant for that too!

Quote:
I bought my house as a place to live - not as an investment vehicle. Have lived in the same place for 18 years and (if I`m spared) at least another 18.
Nothing like a straight answer to a straight question!

The reason I asked was merely theoretical though. Let's assume that claims of mis-selling had any chance of success (they don't). The question would be asked how much did the policy cost, what would the outcome have been had you not had the policy, and how much financial loss having the policy has caused.

Let's say the policy cost you 500.

Failure to have the policy would have meant no mortgage and no house.

An Ombudsman says you are owed 500 plus interest (perhaps another 500) minus any gain that you've made from getting the mortgage. Perhaps 100k in house price growth.

Struggling to see how you've lost out.

(By the way, does the world of negative equity that we live in today explain why lenders charged their borrowers for this sort of protection and many still do?).

Last edited by opinions4u; 30-09-2009 at 8:53 PM.
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# 8
The Pastmaster
Old 30-09-2009, 8:55 PM
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To be honest I have hardly thought about the MIG these last 18 years - just recently with all the PPI and other financial misselling scandals - and by god there`s been plenty - I just wondered if I had paid the BS for something which was subsequently proven to be `missold`. BTW - I never hear of MIGs nowadays - were they dropped in the dash for gold by the banks / BSs with their huge income multipliers and 100% + LTVs.

Thanks
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