Endowment Maturity

glitter123

We have an endowment which will mature next month. We have completely repaid our mortgage and the last mortgage co (Nationwide) sent us a letter at the time we repaid to say they no longer have an interest in the policy.

This morning received a letter about the policy maturity and it seema Northern Roch (mortgage co prior to Nationwide) are still holding a charge on the policy albeit that the mortgage was redeemed in 2003. I had to ring to ask them to send a letter stating they have "no interest".

Out of curiosity I asked if they still held an interest in another endowment policy we have, thinking it would save time to get them to release it now rather than wait until it matures.

They confirmed they are still holding a charge (even though they admit we owe them nothing) and they won't release the charge until the policy matures.

Can they do this?

anselld

Yes, it seems to be the norm.
The Endowment company should request confirmation prior to maturity that an interest no longer exists. It should be sorted out between the companies without delay or you needing to do anything.

glitter123

I rang the insurance company first this morning and they told me I had to get NR to declare "no interest" even though they should have done so at mortgage redemption.

magpiecottage

glitter123 wrote: »

I rang the insurance company first this morning and they told me I had to get NR to declare "no interest" even though they should have done so at mortgage redemption.

Back in the 1980s, it was normal for lenders to hold an assignment of an endowment that was to be used to repay a mortgage.

In effect, you mortgaged the endowment policy as well as the house.

Lenders would give a formal "notice of assignment" to the insurer who would then hold proceeds of the policy pending repayment of the loan. This was normally done by the solicitor.

When the loan was repaid, the lender would discharge the mortgage on the property and on the policy. A notice of the discharge would be sent to the insurer - again usually by the solicitor.

It is possible that your policy document has the actual discharged mortgage deed with it. If so then it should be all the insurer requires and you could look for that in the first instance.

In the old lender really does still have the policy assigned to it and really is refusing to release it long after the loan was repaid, you have grounds for complaint. However, most building societies (which Northern Rock was) stopped bothering around the mid 1990s and unless you speak to somebody as long in the tooth as me they probably do not know what you are talking about.

Nevertheless, if you are delayed because of that, it would seem reasonable that Northern Rock pay you interest on the maturity value from the day the policy matures until you actually get it.

SmileyG_2

I had this with the Halifax. When I moved my mortgage to Nationwide, they decided that they didn't need to have a charge of the endowment policy. The Halifax wrote to me to that effect and I have forwarded it on to Legal andf General and the endowment policy is mine!

If you are talking to Nothern Rock, ask to escalate your call until you can find someone who will declare they have no interest in the policy. The klast thing you want is to find the funds go to NR on maturity. God, life's complicated enough as it is!

SmileyG