In denial of having a SAM - any news recently?

MandyD_2

At the time when Shared Appreciation Mortgages were highlighted as a big problem, I knew my father had some form of equity release in the 1990s but when asked denied that it was a SAM. He has since admitted that it is, with Bank of Scotland. Did he miss the boat for reporting it as mis-selling?

He genuinely did not realise that it could not be transferred to a new property and he now wants to downsize. It's not looking good - his SAM loan was for £20,000 in I think 1992 and he's recently had a valuation of £420,000 on his house. Personally I do not think he will get more than £370,000 for it. I don't know how to do the math to work out how much he'd have to pay BoS under the original agreement but I hope he is not going to be disappointed in thinking he'll come out of it being able to buy a smaller property around the £200,000 mark.

I know that Barclays renegotiated their SAMs for people in a similar situation, did any progress happen with BoS? I have got him to ask his IFA to look into it.

Also, if he were to do an "exchange" with the couple that are selling the £200,000 property that he likes and want to upsize to around £400,000 - what could BoS do about that?

holly_hobby

I'm not sure if SAM complaints were ringfenced, your Father (or you given his authority) should contact the lender & FOS (http://www.financial-ombudsman.org.uk/) for advice. Even if ringfenced, if you can provide a suitable explanation as to the delay in submission of a complaint it may still be considered.

A mis-sale complaint is upheld if it can be proven (or can not be disproven by the lender due to the lack of documentary evidence & other aspects) that your Father was not made sufficiently aware, or able to comprehend (at the time of sale) the contractual terms he were entering into (if classed as a vunerable person i.e elderly or with mental health isssues).

You have stated that the lenders original advance was 20K - what % of equity did this represent of the total property value ?

What % increase in the future value was stated? What has been the increase ?

Without knowing what the Point of Sale Docs & Reason Why (recommendation) letter states its difficult to give advice - but this type of scheme leaves a bad taste certainly with FOS, and if you feel that there has been a mis-sale then put it in writing initially to the lender (with what action you require to remedy the situation), and then, if the lender does not provide a suitable and fair resolution to your Fathers complaint, to FOS themselves.

FOS publish for the industry prev complaints and their approach to them - to give providers an idea how FOS view certain matters and practices .. I have attached a sample of equity release mges which may give you some guidance :- http://www.financial-ombudsman.org.uk/publications/ombudsman-news/72/72-mortgages.html

Hope this helps

Holly