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PPI Claiming Mostly Mortgage and other

Hi All

As a first time buyer 9 years ago I bought a house and the mortgage (which was nightmarish) was processed through the mortgage shop, first lender was Leeds and Holbeck then after two years I switched to another Lender. During this time I was paying an insurance to cover the payments to legal and general. I was basically told that I had to take it out with the mortgage. After four years I cancelled it realising that it had been missold - cancelled it in 2006.

I have switched lenders ever since once a rate expires to find a better one and did this all through a financial adviser. I have subsequently found out that it is possible that my previous mortgage loans since 2006 may have had ppi built into them without my knowledge. Is this so?

Another question, the person who told me abut the built in PPI without my knowledge was from a company who processes ppi claims on people's behalf (no claim no fee). I don't normally go for companies like this however it was an 0800 number which was promoted within a video that I watched from this (moneysavingexpert.com) website. Does anyone know the company I am talking about?

I look forward to hearing from you on both points.

Thanks

Carol

Comments

  • dunstonh
    dunstonh Posts: 120,164 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I have subsequently found out that it is possible that my previous mortgage loans since 2006 may have had ppi built into them without my knowledge. Is this so?

    You are asking us when we cant see what you have.

    However, I dont know how you could hide them into a mortgage without your knowledge. If it was single premium PPI then the amount you borrow would be that much higher. If its monthly then you would have seen them on the payment schedule, statements and had a policy schedule and cancellation rights sent.
    Another question, the person who told me abut the built in PPI without my knowledge was from a company who processes ppi claims on people's behalf (no claim no fee).

    Have they seen the paperwork or are they just guessing?
    I don't normally go for companies like this however it was an 0800 number which was promoted within a video that I watched from this (moneysavingexpert.com) website. Does anyone know the company I am talking about?

    This site has never promoted claims companies. Indeed, the stance from martin is that you shouldnt use them.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • magpiecottage
    magpiecottage Posts: 9,241 Forumite
    1,000 Posts Combo Breaker
    Three points:

    1. Leeds & Holbeck (not to be confused with Leeds Permanent which was absorbed by Halifax) historically had slightly more generous earning multiples than most lenders - and charged a slightly higher rate
    2. It was also not unusual for it to insist on the sale of certain insurance products as a condition of the loan.
    3. MPPI for a mortgage is generally good advice - unless it is single premium or you would not have been eligible to claim.l
  • trav819
    trav819 Posts: 1 Newbie
    Hi, i have a question about my mortgage, when i bought my first house in 2003, i was self employed and was told by the yorkshire building socity that i HAD to take out a insurance policy so if i went into arrears and they had to sell my house the bank would be covered for the sort fall in money from the selling of my house to paying off what i owed, i then would have to find the short fall and pay back the insurance company, i argued that i was paying there isurance policy but ybs said that i had to take out the policy and that every bank did this for first time buyers, they even happily told me if i could not afford this they would help fully put it on my mortgage for me. i sold my car to find the grand to pay it.
    would i be i be entitled to a claim? not sure it was a ppi but it was something that i was told i had to do to take out the product, and it did not seem very fair to me.
    thanks to anyone who can help
    steven
  • dunstonh
    dunstonh Posts: 120,164 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    i was self employed and was told by the yorkshire building socity that i HAD to take out a insurance policy so if i went into arrears and they had to sell my house the bank would be covered for the sort fall in money from the selling of my house to paying off what i owed, i then would have to find the short fall and pay back the insurance company, i argued that i was paying there isurance policy but ybs said that i had to take out the policy and that every bank did this for first time buyers, they even happily told me if i could not afford this they would help fully put it on my mortgage for me. i sold my car to find the grand to pay it.

    That would be a mortgage indemnity guarantee. You dont see them much nowadays as they vanished during the housing boom. Although there has been some talk of them coming back.
    would i be i be entitled to a claim?

    no.
    not sure it was a ppi but it was something that i was told i had to do to take out the product, and it did not seem very fair to me.

    It was not PPI. Plus, even if it was, having PPI is not an issue. It was how it was sold and set up that is.

    What you paid as a MIG. They were compulsory to those that didnt have enough equity or savings and it was a way to borrow without waiting to get those savings.

    Quite legal and acceptable.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • magpiecottage
    magpiecottage Posts: 9,241 Forumite
    1,000 Posts Combo Breaker
    edited 16 May 2011 at 7:44PM
    As DunstonH says, the purpose of the Mortgage Indemnity Guarantee (MIG) is to protect the lender, not the borrower.

    When a loan is made, the lender takes a risk that they will not get their money back. The risk is lower with a mortgage because they can normally sell the property to recover the loss. If that happens then anything left over, after the loan and costs incurred by the lender have been repaid, is returned to the borrower.

    However, if there is not enough to do that the lender may not get their money back. Therefore they take out insurance. If there is not enough realised from the sale, the insurer gives the lender the difference (up to a specified limit).

    However, if the lender paid the premium it would have to then share the cost of this among all borrowers in its interest charges. That would mean those who represented a lower risk were subsidising those who were a higher risk.

    The MIG therefore represents a means of applying the cost in accordance with the risk.
  • dunstonh
    dunstonh Posts: 120,164 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    that is one of the best explanations of a MIG i think I have ever seen.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Sara-Maria
    Sara-Maria Posts: 1 Newbie
    edited 22 July 2013 at 12:56PM
    Hi there everyone,
    I am currently digging out all my paperwork for mortgages I have had for my house since 2000 to find out about PPI. I have now got all confused in what I should be looking for ie, I have always taken out life insurance to cover the debt if I should die and taken out buildings insurance cover for the house. My question is should I be looking at my mortgage paperwork or my life insurance paperwork? Apologies if all this seems quite silly and obvious to everyone but this is all new to me.
  • dunstonh
    dunstonh Posts: 120,164 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    I have now got all confused in what I should be looking for ie, I have always taken out life insurance to cover the debt if I should die and taken out buildings insurance cover for the house.

    Logical decision and that is what most people do.
    My question is should I be looking at my mortgage paperwork or my life insurance paperwork?

    Neither. MPPI is mostly a standalone product paid by monthly premium direct debit. That is one of the reasons it has a lower success rates on complaints. So, you would have standalone documentation for it.

    Single premium MPPI is not common but has existed. It only applied to a small number of brokers and the ability to complain would only exist on post January 2005 sales. You can spot this easily because the amount you borrow is higher than what you wanted (typically by around £5000 or similar range)
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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