Mortgage Lender Misadvises re Endowment Cash In

zadie

Earlier in the year about May/June time I decided to cash in my seriously underperforming endowment policy and pay this lump sum into my mortgage account. I received the instructions from AXA on how to sell my with profits endowment and was asked to provide a letter of approval for this action, from my Mortgage lender HSBC. I telephoned HSBC mortgage service centre who informed me that they could not provide me with this letter as the endowment was linked to my mortgage. I recently went to discuss with my HSBC branch the situation with my underperforming with profits endowment, having recently received a decision rejecting my claim of misselling by the Ombudsman, HSBC branch informed me that I could cash in my endowment policy any time I liked and that they would be happy to give me a letter of approval. I now find my with profits endowment policy value has fallen enormously since I spoke to HSBC in May/June and would like some advice of what I could do next.
Thanks
Zadie

dunstonh

HSBC are correct and the Ombudsman is wrong where the policy is assigned to the lender. Where there is no assignment then the HSBC are wrong and the lender is correct.

The fact the lender needed to provide the letter suggests that the policy was assigned and therefore HSBC are correct in the information they gave you. Although, the don't actually need to be assigned any more and havent for many years so the assignment could have been removed unless HSBC had concerns over your ability to repay the mortgage by other means.

zadie

How do I establish if the policy which was taken out in 1987 was assigned to my mortgage?

dunstonh

The fact it was 1987 is a good guide. Assignment was common until the early to mid 90s. Indeed, the banks were still doing it in 95 when they sold their own products. Also, there is no need for a letter from the lender unless it is assigned.

However, you can ask HSBC (the insurance side, not the lending side) if the policy was assigned and when asssignment was removed.

zadie

"The fact it was 1987 is a good guide. Assignment was common until the early to mid 90s. Indeed, the banks were still doing it in 95 when they sold their own products. Also, there is no need for a letter from the lender unless it is assigned.

However, you can ask HSBC (the insurance side, not the lending side) if the policy was assigned and when asssignment was removed."

The Policy was taken out with Axa Sun Life, do you mean for me to ask them if the policy is assigned, I'm a bit confused with your answer which refers to HSBC Insurance & HSBC Mortgages. Could you explain further please who I am talking to about the assignation.
Many Thanks
Zadie

EdInvestor

zadie wrote: »

I received the instructions from AXA on how to sell my with profits endowment and was asked to provide a letter of approval for this action, from my Mortgage lender HSBC.

This indicates it was assigned as otherwise they would not have asked for the letter.

I telephoned HSBC mortgage service centre who informed me that they could not provide me with this letter as the endowment was linked to my mortgage.

This also indicates it was assigned.

HSBC branch informed me that I could cash in my endowment policy any time I liked and that they would be happy to give me a letter of approval.

This indicates it is still assigned but they are happy to 'un-assign' it.

I now find my with profits endowment policy value has fallen enormously since I spoke to HSBC in May/June and would like some advice of what I could do next.

First get a letter from HSBC, formally unassigning the policy.Then sell/surrender it. Then make a second complaint that you suffered a loss based on the unreasonable refusal to unassign your policy earlier, which should be a routine matter these days..

zadie

thanks for your advice I have requested the letter and put in a complaint.
Best wishes
Zadie