CAB questions perhaps a mis-sold mortgage by NR

ESO1967

Not at all McKneff and if you really knew our situation perhaps you would change your opinion.
It seems the way of some but I would not know any difference if CAB hadn't said anything !!!!

There would be nothing more I would of liked is making sure I was recieving sound advice especially from CAB and getting advice on here but seems your ridaculed for doing so well all I can say is " SORRY "
for asking.
Thank you all:rotfl:

ViolaLass

The difficulty is that it's rather difficult for us to advise you if you don't know why CAB think you were mis-sold to or have any ideas of your own about what Northern Rock did wrong.

Do you think Nothern Rock mislead you in some way about what the loan was? Has something about the loan taken you by surprise? (That doesn't mean it was mis-sold but it may help us work out what's going on).

dunstonh

Our advisor believes that NR sold these type of mortgages going up to the limit then giving them the rest as unsecured because this is what they did of the time and proberly becase really re-mortgaging to pay off exsisting debt this way is wrong advise by our broker and NR

That is exactly what NR sold. However, whilst the product certainly attracted high risk borrowers and in part led to their downfall, it wasnt wrong. In effect, its not much different to someone taking out a personal loan and a mortgage at the same time.

125% mortgages were around since the mid 90s (initially introduced to allow people to move house if they were in negative equity).

As for refinancing existing debt onto a mortgage, there is absolutely nothing wrong with that at all. The broker has a few compliance risk warnings to point out but if it makes your debt more affordable then it can be a very good thing.

The country is full of people who have remortgaged and increased their secured borrowing to replace unsecured, higher cost debt. People still do it today. It is perfectly acceptable.

Its only considered bad if the risk warnings were not given (hard to prove verbally but documentation is king. If they are in the suitability report/closure letter then job done) or the debt consolidation ends up being more expensive than what you had before (moving to cheaper mortgages over more expensive credit cards, personal loans etc is pretty easy to justify).

Has the person at the CAB read your mortgage files or are they just repeating one of the internet myths on what could be mis-sales? Remember any product "could" be mis-sold. However, having a 125% NR mortgage is not wrong.

kingstreet

ESO,

Northern Rock Together products gave a combination of a mortgage of upto 95% of the value of a property, plus an unsecured loan which could be used for practically any purpose, including consolidation of other credit commitments.

If you, for example, had a mortgage of £100,000 with £30,000 of unsecured credit card and loan debt and you remortgaged to Northern Rock Together and finished up with £100,000 mortgage and £30,000 unsecured loan, you're going to find it difficult to form a misselling claim, particularly if you saved hundreds of pounds a month by refinancing.

You may need to contact the intermediary who gave you the advice, as to fully explore the reasons for the Northern Rock recommendation, you'll need a copy of your factfind, key facts illustration and suitability letter. Only these items will unravel the advice trail and will determine if you have a case.

Post crossed with dunston's!

Senior_Paper_Monitor

I don't think anyone is ridiculing you or anyone else - but this forum tends to hand out some 'clear apeaking'.

There are a wide range of contributors on here, many of whom are hugely experienced/qualified in the area of finance/mortagges/trusts/legal matters/relevant legislation etc and with 'real world experience of the same and some of whom are complete bluffing t*ss*rs - and many in the middle.

Pretty much all of the experienced/knowledgeable ones give up their time simply to help (I like to think that's why I'm here - but openly admit I often see issues raised which make me think hard [and/or head off in research mode]).

I openly admit I question the ability (or appropriate experience/qualification) of many CAB personnel when they give 'advice' about misselling of complex financial products - and I don't retract that.

From what little information you have posted (this sort of advice/comment can really only be made on the basis of full and detailed disclosure) I think it is unlikely that you were "missold" - the actions taken by all parties, including you, seem pretty much in line with the regulatory and cultural practice of the day. No-one lied or misrepresented to you as far as we can establish from the information presented.

My advice to see if a local mortgage broker (someone who's been at it for a few years - seen it all - and understands the real world) will go through your situation, confirm the 'misselling issue', and possibly offer best advice on your ongoing plans still stands

My comment not to go to the 'claims sharks' still stands.

You have taken offence - I also take some to the obviously sarcastic 'thank you all' with the rolf smiley !!

ESO1967

Okay my husband has just explaind to me...here goes,
What CAB are saying is that normally a mortgage is fully secured on the whole mortgage, but to get around this they loaned us the extra on unsecured, which is apperently bad business, because they knew our wages would not give us the required amount needed so the rest was made up on the unsecured, I really hope this makes sense.

Thank you

ESO1967

We did'nt realise this until CAB told us today that this was wrong and if they had'nt mentioned it today we would be none the wiser !!

Thank you for your help.

Trollfever

which is apperently bad business,

Which is why Northern Wreck went bust.

dunstonh

What CAB are saying is that normally a mortgage is fully secured on the whole mortgage, but to get around this they loaned us the extra on unsecured, which is apperently bad business, because they knew our wages would not give us the required amount needed so the rest was made up on the unsecured, I really hope this makes sense.

What you are saying makes sense. However, its not wrong.

The NR together mortgage was effectively two products linked. Normally only the amount above 95% was put on the unsecured option.

Annisele

ESO1967 wrote: »

What CAB are saying is that normally a mortgage is fully secured on the whole mortgage, but to get around this they loaned us the extra on unsecured, which is apperently bad business, because they knew our wages would not give us the required amount needed so the rest was made up on the unsecured, I really hope this makes sense.

I'm afraid it doesn't really make sense - particularly the bit about mortgages normally being secured on mortgages. I think that either CAB are confused, or your husband has got his wires a bit crossed.

I think that what CAB might be saying (but I'm guessing here) is that mortgage lenders don't normally lend more than the value of the house. You needed more than that - to pay off existing debts - so NR lent you 120% (or more, not quite sure) of the value of the house.

If so, then CAB might be concerned that you were immediately (in effect) in negative equity. Negative equity is usually something that you want to avoid - but then I guess you didn't really want your existing debts either. You should have been given various risk warnings, and if you weren't then the mortgage might have been mis-sold.

However...even if your mortgage was mis-sold, I'm not sure how that would help you. Generally, compensation for a mis-sale is to put somebody in the position they would have been in had the mis-sale not occurred. In your case - what else would you have done if NR hadn't lent you the money? It sounds as though you'd just have kept your loans from your existing lenders, which was likely costing you more than the NR loan.