Shared Ownership Mortgage mis-sold?!! Financial Ombudsman case??

LondonSW5

I have been trying to add additional borrowings to my existing Shared Ownership mortgage...but have been advised that will not be possible because the terms and conditions around these types of mortgages dont permit that for debt consolidation.

I took out my shared ownership mortgage with Halifax through a broker. I was very clear to the broker that i wanted a mortgage with no early redemption penalties since my plan was to borrow money ..unsecured..to completely renovate the property immediately following comletion. I knew that because of the area i bought in that i would easily have enough uplift in value in the property after renovation to re mortgage or add additional borrowings to my mortgage to include the unsecured debt.

Having approached my existing lender for additional borrowings...she firstly instructed a valuation to be done. Then after the valuation results came back i was given an illustration for the amount available to me as additional borrowings. She knew all along i had a shared ownership mortgage.
At the last moment before she advised the funds would be released to me, i received a phone call to say that she cant help me with the borrowing since it has just come to her attention that the additional borrowings are not covered by the mortgage protection clause. ( The lender gets first bite of the equity in the property since they are 1st charge, and the housing association are 2nd charge) the additional borrowing would not be covered in the 1st charge.
So no funds for me and i am told they cant help.

Point 1) I have been charged for this recent valuation. Should i have been? Shouldn't the Halifax adviser have realised there would be no point in even discussing additional borrowings with me ...never mind waste my time and money by charging me for a new valuation?

Point 2) I only proceeded with the shared ownership mortgage with Halifax because i wanted to re mortgage or have additioanal borrowings straight afterwards to repay off my unsecured debts that would result from my planned work. No one at any stage said to me or highlighted to me that that was something with Shared Ownership mortgages that cant be done. Addtionally, when i looked over my halifax mortage offer, there is nothing in there that even mentions addtional borrowing or re mortgages on the shared ownership basis. It has conditions to the mortgage offer being satisfied, but nothing regarding the additional borrowing/shared ownership clause.
I have checked the terms and conditions of Halifax mortgages and again i can see nothing there around shared ownership/additional borrowing clauses.
I have checked my Halifax deed of assignement and again nothing there around shared ownership/additional borrowing clauses.

I believe other shared ownership mortgage lenders make their customers aware before proceeding with the application that there are certian differences with the shared ownership mortgage especially around the additional borrowing clause.

I know for absolute certain that i was NEVER verbally made aware of any issues around the shared ownership mortgage and as far as i can see there is nothing written anywhere in anything i have received from Halifax..not even in the conditions of my mortgage offer!

Do i have a case for the Financial Ombudsman Service? If so...what can i expect to achieve from forwarding a complaint?

Thanks.

dunstonh

I know for absolute certain that i was NEVER verbally made aware of any issues around the shared ownership mortgage and as far as i can see there is nothing written anywhere in anything i have received from Halifax..not even in the conditions of my mortgage offer!

Did you use an adviser or did you transact on information only basis?

LondonSW5

I set up the mortgage initially with a broker. I selected a Halifax mortgage and then read all the terms and conditions that were mailed to me before i signed. These are the documents i have at home: a copy of my mortgage offer, and a deed of assignment and a copy of the terms and conditions of Halifax mortgages.

For my additional borrowings, i went to a Halifax branch and dealt with an adviser direct. She knew it was shared ownership and still went ahead with sending out a valuer to value my flat then giving me an illustration as a result of his valuation! I was charged for the valuation then told since shared ownership i couldn't have the borrowings!

Dan_1976

You are allowed to borrow extra, but normally for two reasons only

1. Stair casing, or buying a further share
2. Essential/major home improvements

Number two is tricky, but they want proof and plans. So its things like new windows etc etc as they want you to maintain the property.

Are you out of pocket and is you complaint at the setting up of the mortgage initially ir the FA?

LondonSW5

I was never told at any time during the set up of my mortgage that these conditions existed. My broker knew my plans and still found me the mortgage without saying anything. Maybe he wasn't aware either since shared ownership is specialised, but i would have expected something in writing from the Halifax around the special conditions that apply to a shared ownership mortgage. I knew nothing was any different from a shared ownership mortgage and a normal mortgage in this respect.

My complaint is with the Halifax on two separate counts.

1. the set up of the mortgage and the fact that i have nothing in writing anywhere that defines the restrictions on the mortgage around additional borrowing. Surely as a mortgage company they have a duty to inform you of special clauses that exist or differences in your mortgage compared to a mainstream one.

2. i was charged a valuation fee to have my flat valued when in fact i was never going to get the additional borrowings anyway since the adviser knew during my meeting with her the full circumstances for the additional funds. She knew the situation and knew the work in the flat had already been done. She took a photocopy of the town hall's planning dept completion certificate for the work being completed in my flat! She knew it was for debt consolidation since she knew the work had been done.

Do i have a case for the ombudsman?

LondonSW5

I should add that by doing the work in my flat i raised the value by 90k. I can access all of that to staircase...or to buy more shares...or have all of it back if i sell the flat today...but i cant add a small amount of it to my mortgage!!!??? So now i am left managing my unsecured debts every month as well as my mortgage as well as my rent and other expenses...so although i have this great equity in the property i am actually left struggling and on the verge of missing payments and defaulting on my payments!
I would never have started the work in the property if i had been in any way advised of the potential problems around the additional borrowing!

UK007BullDog

Are you for real? I dont believe that you did not know.

You should have known that with shared ownership you are locked in and cannot borrow extra. You think you might have raised your value by renovating but the property prices are falling so you might have managed to keep the value steady.

The Housing association would have also sent you docs explaining how things work.

I cannot see you have any leverage over the broker. As it is also your duty to read up on what you are embarking.

However you might have a case on the bank adviser. She should have known and I bet she did, but since bank advisers are on targets she just decided to submit your mortgage application and get her points for submission, the branch get their points and sod the customer. She was probably crossing her fingers and hoping it would go through as she will get more points for completing the mortgage. Buts its all a numbers game, its like a funnel, the more one gets in at the top the more likely the right number of mortgages comes out at the end so the adviser meets their monthly and yearly targets to get a stab at the bonus and any other competition rewards. Plus the bank advisers only know 5% of what is going on in the mortgage world, unlike brokers who should know it all. I have been in both worlds so know what I am saying to you.

UK007BullDog

I loath shared ownership by the way, as all these problems with this and reselling is going to mess up a lot of people.

Dan_1976

You stated that you did read the T&C's and offer etc but you still signed up?? Are you for real?

mummytofour

UK007BullDog wrote: »

I loath shared ownership by the way, as all these problems with this and reselling is going to mess up a lot of people.

Yes you are so very right.

opinions4u

I think your Halifax adviser instructed the valuer in good faith. Just didn't know the rules!

That said, if their policy prohibits this sort of additional loan, why bother revaluing when you can't lend?

You are the victim of the Halifax adviser not knowing their own lending policy for a relatively rare situation. I believe they should refund the cost of the fee.

Ask for this in writing.