why did N/Rock sell a mortgage to a 70 year old

blowjangles

9 years ago my in laws were "advised" to take out a ten year - interest only mortgage by a financial advisor. At the time my father in law was 70 and at the time he needed money to clear and consolidate existing debts.

The mortgage was accepted by n/rock and has been religiously paid to this day. As the day of reckoning looms in just over a year's time when my father in law has to stump up the mortgage loan to n/rock he is worrying himself silly as to where he is going to find the money.

He is now nearing his 80th birthday and shouldn't be having to worry about issues like this. Something about this does not sit well with my moral compass and i suspect that 9 years ago he was miss-sold this mortgage.

Is there anyone out there that can offer answers to a theory of miss-selling or any advice on avenues to go down.

Shakethedisease

Am sorry to hear about your in-laws, but surely when they took out an interest only mortgage they knew they would have to pay the capital back at the end of the term ?

I'm no expert but I'd say that any evidence of mis-selling would have to be based on the fact that your in-laws had no idea what they were signing ie were completely unaware that an interest only mortgage wasn't paying off the capital and that there should be some other method in place to ensure the mortgage was paid off after 10 years ?

Didn't they truly not know what they were taking on ?

There was also a substantial period during the last 10 years when the property value would have gone up by quite a bit. Most short term mortgages on interest only rates would probably have been based around selling the property at some point, paying of the mortgage with that and pocketing the profit. A lot of Northern Rock mortgages were based on the premise that property prices kept going up ( 125% mortgages ).

I'm sure someone far more experienced than me will be along shortly to advise where to go from here. Good luck with things..

_Andy_

Why are you putting all the blame on to Northern Rock?

Interest only mortgage and you think he "shouldn't be having to worry about issues like this" - why not? It's his mortgage - clearly he was happy enough at the time not to give a damn about how he paid it back.

Sorry to be harsh but your post seems to imply that your FIL is some doddery old fool who was co-erced into a mortgage and as such doesn't have to take any responsibility.

happybroker

9 years ago mortgage advice didn't fall under the auspices of the FSA and as such were not regulated. I fear that there are plenty of these types of contracts out there.

Hopefully your parents will have kept all the paperwork that they were issued with when they took the mortgage out. The moral argument for mis-selling is obvious but at the time there was an element of buyer beware I'm afraid.

Your complaint needs to be adressed initially to the company who sold the mortgage (not advised as "advised" and "non advised" didn't exist then) and should really centre on the plan (or lack there of) for the repayment of the mortgage at the end of the term and also the lack of explanation regarding the securing of presumably unsecured debt on the home.

Dan_1976

I understand your worry op, however like many mortgages that seem to have been miss sold somebody asked for a mortgage. Advice and regulation were not what we have now as previously mentioned.

So why did a 70 year old commit to an interest only mortgage?
Why did he need to debt consolidate at 70?

It would be intereting to see what was on the application form!

dwsjarcmcd

Who were the financial advisers? Were they employed by NR or tied/ independent.

I would echo other posters who have said that your inlaws need to take some responsibility in this sad state of affairs, but if there is something wrong in what they were sold then it may not be the Rock they should be speaking to, particularly bearing in mind happybrokers comments above.

You need to get all the paperwork together and read that

payless

I assume he would not have been able to pay off the original debts either ?

_Andy_

To add to my post above, which admittedly is quite blunt, just wanted to say it's not to say I agree with NR's lending policy in this case.

happybroker

payless wrote: »

I assume he would not have been able to pay off the original debts either ?

If they were unsecured debts then that would not, in all likelyhood, have had such a profound effect as the current situation and if they were secured but unaffordable then at best the new mortgage only postponed the inevitable.

An alternative should have been looked at when we consider this in today's regulated market but sadly this rarely happened pre N4.

Whilst parents must have asked for this, at some point along the line there surely, even then, must have been a proffesional and moral obligation on the part of the "advisor" to make a real song and dance about the pitfalls of this course of action and also point out that there were alternatives.

dunstonh

why did N/Rock sell a mortgage to a 70 year old

He had the debts already. So, changing the provider of the debt didnt create new borrowing. If you have £100 in your left hand and then put that £100 in your right hand, you still have £100.

Something about this does not sit well with my moral compass and i suspect that 9 years ago he was miss-sold this mortgage.

Its probable that a greater emphasis should have been placed on him to clear the capital element. However, if the move to mortgage was cheaper than the previous debts then that would be a good reason to do it.

Why didnt he go with a repayment mortgage or build up money to repay this mortgage when it was due?

Trollfever

why did N/Rock sell a mortgage to a 70 year old

To help fund a lifestyle that they were unable to afford.