Endowment reassignment fee

oldgiteggy

I changed from an endowment mortgage to a repayment mortgage two years ago, after two successful endowment complaints.

I am trying to surrender my last endowment policy (I have failed to sell it!) after the final unsuccessful FSA adjudication, but the lender will not allow this, because they say it is still assigned to the first endowment mortgage, which no longer exists. They say they will only do so if I pay a £75 fee to send the letter of "no further interest" to the endowment company.

Despite paying my repayment mortgage, they still think that the policy exists to pay of the mortgage on maturity? DUH?

Surely, the policy should have been unassigned when the mortgage was changed? Are they negligent in this and therefore, should I still have to pay a fee?

Steven

dunstonh

Despite paying my repayment mortgage, they still think that the policy exists to pay of the mortgage on maturity? DUH?

The insurer isnt to know what the situation regarding the mortgage is. They cannot clear the assignment until the lender tells them its ok to. Assignment is a legal instruction. Not something that can be overuled on a whim.

The lender should issue the letter. If the mortgage doesnt exist and they still refuse to do so then they are falling foul of the FSA's TCF guidelines.

Surely, the policy should have been unassigned when the mortgage was changed? Are they negligent in this and therefore, should I still have to pay a fee?

You could argue (probably successfully with the FOS) that the lender should have done this at the time. Tell them that you are quite happy to take another complaint to the FOS costing them £450 to argue over the validity of a £75 charge. I dont normally agree with this sort of blackmailing using the FOS charge but in cases like this it seems fair to do so.

oldgiteggy

Good pointers, thanks.

They claim that the change from endowment to repayment mortgage made no difference to the assignment. Strange.

The insurer is just waiting for the letter of no further interest from the lender. I find it strange that it's the lender who is controlling the assignment, despite the original contract being superceeded by the new repayment mortgage agreement.

I'm in the middle of writing an accompanying letter to go with the questionaire they sent me. I'll see what their response is, and hopefully add it to the "successes" threads.

dunstonh

They claim that the change from endowment to repayment mortgage made no difference to the assignment. Strange.

I would love to see their argument to the FOS on that one.

You have a strong case. Especially as assigment hasnt been required for most lenders for over a decade now. They are being petty. In your complaint, dont fail to mention that they are not treating customers fairly. TCF is the current FSA flavour of the month (probably why they missed what was going on at the banks as they were spending too much time on TCF)

oldgiteggy

:jJust an update. Chelsea admitted that they had stopped assigning policies to mortgages in 1991 and apologised for the delay in writing to Winterthur claiming no interest in the endowment policy. They included a copy of the the letter they sent, without it costing a penny.

However, all this wasn't needed anyway, because Winterthur wrote to me explaining that the policy had been assigned to the original lender Leeds & Holbeck. I rang them and they sent a letter immediately, without question, or any mention of a charge. Excellent service!

Thanks again. :hello: