Mis-sold mortgages - can anyone shed any light?

edited 30 November -1 at 1:00AM in Reclaiming Mortgage Fees, Council Tax, etc
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LulabulubopLulabulubop Forumite
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I have been contacted by a solicitors who are stating that my mortgage may have been mis-sold to me.

Now I know these people are trying to get my money through % share of any compensation, so am not saying I am going to go down the "no win no fee" route with them, but I know nothing about the things she was talking about and wondered if anyone could shed any light and if indeed I was mis-sold my mortgage what I can do about it?

The lady from the solicitor told me they are working with the Financial Compensation Scheme after a number of Brokers were struck off and that there are certain key mortgage lenders who were paying brokers to promote their products via the back door so so speak.

I was sold my mortgage through a broker (a broker I was told I had to use in order to get the discount on my new build house from the developer). The broker told me the only suitable option for my mortgage was with Accord mortgages which is a brokerage arm of Yorkshire Building Society. I didn't question this (yes, I know I was stupid). The lady from the sols says Accord are a sub-prime lender!

My credit file was excellent when I took out the mortgage and there is no way on earth I would ever go with a sub-prime lender.

The lady from the solicitor also thinks that the broker fee would have been added to my mortgage and I have therefore been paying interest on the fee for the last five years, as well as not actually getting the rate I should have got had I been with a high street lender.

She is telling me I can claim for the fee, the interest charged on the fee and also the difference in rates because of this mis-selling (there's also the issue of my mortgage being 4 x my salary and the broker only doing the mortgage in my name as my husband is self-employed but including hubby's salary info in the affordability statement).

It was a five year fix cap & rep mortgage.

So my very long question is are there mis-sold mortgage cases being taken to court at present and winning? What constitutes a mis-sold mortgage? Is the only way to do it through a firm that is going to take 25% of any compensation or can I do it myself? I have tried to find info on mis-sold mortgages but only come up with endowment mis-selling and the companies that want a share of any compensation payments.

Thanks in advance
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  • dunstonhdunstonh Forumite
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    I have been contacted by a solicitors who are stating that my mortgage may have been mis-sold to me.

    First things to be on guard about is that solicitors do not cold call. So, is it a firm making out they are a solicitor?

    Next thing is that your data is not in the public domain. So, if they think it was mis-sold, what data do they unlawfully have on you?
    The lady from the solicitor told me they are working with the Financial Compensation Scheme after a number of Brokers were struck off and that there are certain key mortgage lenders who were paying brokers to promote their products via the back door so so speak.

    That makes it sound like a scam. The FSCS do not contact you in this way.

    Also, the FSCS only deal with companies that no longer exist and have no assets. So, they have no reason to get involved with you.

    Lenders have not paid brokers any hidden amounts. Thats an excuse used by scam cold callers. Lenders will pay the broker a commission and that is quite acceptable. For some years now that commission has been disclosed as well.
    I was sold my mortgage through a broker (a broker I was told I had to use in order to get the discount on my new build house from the developer). The broker told me the only suitable option for my mortgage was with Accord mortgages which is a brokerage arm of Yorkshire Building Society. I didn't question this (yes, I know I was stupid). The lady from the sols says Accord are a sub-prime lender!

    My credit file was excellent when I took out the mortgage and there is no way on earth I would ever go with a sub-prime lender.

    Accord didnt just do sub prime. They also focused on buy to lets, self certs, those that were pushing income multiple limits, shared ownership and near prime.
    The lady from the solicitor also thinks that the broker fee would have been added to my mortgage and I have therefore been paying interest on the fee for the last five years, as well as not actually getting the rate I should have got had I been with a high street lender.

    The broker fee is allowed to be added to the mortgage. Just as all other fees can be as well. No breach there.

    The mortgage rate you agree before you take the mortgage out. what other lenders may or may not offer is irrelevant in your purchase. I am sure I can get better than my current mortgage elsewhere but it doesn't make it mis-sold.
    She is telling me I can claim for the fee, the interest charged on the fee and also the difference in rates because of this mis-selling (there's also the issue of my mortgage being 4 x my salary and the broker only doing the mortgage in my name as my husband is self-employed but including hubby's salary info in the affordability statement).

    Did you pay a fee or was it commission only? If you knew the fee existed then you have no case. There is no difference in rates, so that is BS.

    What you describe also makes it sound like you possibly committed mortgage fraud or did a self cert mortgage (if the latter, then that would explain accord. If the former, then do you really want to tell the lender you have committed fraud)?
    So my very long question is are there mis-sold mortgage cases being taken to court at present and winning?

    A very tiny number. So much so that they tend to make the media when they result in an outcome.
    What constitutes a mis-sold mortgage?

    There is very little that could actually get classed as a mis-sale resulting in redress. Errors could be made that are technical errors but don't change any outcome. But to be mis-sold typically means committing fraud and you have to be complicit with that. The fact that most people want to keep their house and dont want to make it impossible to get a mortgage again (by being recorded on the fraud register) means that they dont want to complain. If they did tell porkies on the income, they did it knowingly and did it because they wanted the house.

    Being sold a subprime mortgage when prime or near prime would be a mis-sale. However, just because you use a lender that deals with higher risk or niche cases doesnt mean you have a sub-prime mortgage.

    Broker fees are a allowed and acceptable and can be added to the mortgage. Indeed, independent mortgage brokers have to offer fee basis by law. So, to say they are mis-sold on that basis is pure fantasy.
    I have tried to find info on mis-sold mortgages but only come up with endowment mis-selling and the companies that want a share of any compensation payments.

    That tells you a lot straight away. If it was a widespread issue, dont you think the claims companies would be all over it.

    What you have described sounds like a scam

    1 - solicitors do not cold call.
    2 - The FSCS do not work with solicitors and would not contact you like this
    3 - Your data is not in the public domain. So, this company either has it unlawfully or is taking random calls (I have been cold called to say I have been mis-sold but I cant have been as I am an IFA)
    4 - broker fees are allowed and can be added to the mortgage just as any fees can (there are people doing that now as we speak)
    5 - brokers can receive commissions from the lender. How else do many make their money? (this site promotes the services of a few national brokers that only use commission paying lenders).

    I suggest you phone the FSCS and tell them that this "solicitor" has said they are working for the FSCS and see what they say. I would put money on the FSCS saying its complete BS and a scam.

    http://www.moneymarketing.co.uk/investments/fscs-becomes-latest-firm-targeted-by-scammers/1026110.article
    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.
  • roonaldoroonaldo Forumite
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    What dunstonh said sounds spot on.

    Nothing you have said indicates a mis-sold mortgage.
  • I can with 100% certainty state I did not commit fraud. My mortgage was in my sole name and based on my income. The broker wanted to cover his back by detailing in the affordability section that I also had my husband's income coming into the household.

    She didn't cold call to sell this. She rang my husband with one of those "did you know about this" type of call and he gave her my number. She specifically said she wasn't cold calling.

    I did see the details of the fee, as the broker showed me the sheet stating it was commission and paid by the lender, but I was not aware it was added to the mortgage - possibly stupid as I am fully CeMAP qualified, but have never known brokers commission to be added to the person buying's purchase?

    I think the point she was making was that certain lenders have been identified as in essence bribing certain brokers and my lender is one of those. She didn't know my lender or have any info before speaking to my husband.

    Does anyone know if there has been a "hit" so to speak on a load of brokers who've been struck off?
  • roonaldoroonaldo Forumite
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    Does anyone know if there has been a "hit" so to speak on a load of brokers who've been struck off?

    YES! lots of former mortgage brokers have turned to being claim managements companies and taken their back book of customers with them.
  • dunstonhdunstonh Forumite
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    I can with 100% certainty state I did not commit fraud. My mortgage was in my sole name and based on my income. The broker wanted to cover his back by detailing in the affordability section that I also had my husband's income coming into the household.

    So the mortgage adviser did nothing wrong there and nor did you.
    She didn't cold call to sell this. She rang my husband with one of those "did you know about this" type of call and he gave her my number. She specifically said she wasn't cold calling.

    So, she cold called your husband and he agreed she could call you?
    I did see the details of the fee, as the broker showed me the sheet stating it was commission and paid by the lender, but I was not aware it was added to the mortgage

    Commission is not a fee. A fee would be an explicit charge you pay or add to the mortgage. It would be stated on the key features illustration and typically you sign a fee agreement with it. It sounds like yours was commission only and not fee only or fee and commission (the latter is more common with small mortgages)
    possibly stupid as I am fully CeMAP qualified, but have never known brokers commission to be added to the person buying's purchase?

    It isnt. Another bit of misinformation from this company to you. I suspect you would spot a fee agreement being shoved under your nose. Or you would see the fee on the key features illustration or in the key facts to our services document.
    I think the point she was making was that certain lenders have been identified as in essence bribing certain brokers and my lender is one of those.

    There has bee no such thing. Your lender paid a commission. It is that which they are calling a bribe. It is based on the one successful court case that has occured where an independent broker (and note independent) charged a fee and took commission. Yet they didnt disclose the commission and it was argued in court that the commission could be viewed as a bribe when the broker had been employed as an independent and paid a fee for doing so. As the commission had not been disclosed, the judge ruled that the commission amount should be given to the borrower. If it had been disclosed then it would have been ruled against the borrower. The commission repaid in that case was about £250. Typical mortgage commission is around 0.3%.

    So, you would have to have used an independent broker on fee basis and not been aware of the commission. Hardly any mortgages are arranged on independent basis. Most are whole of market or panel which are mostly commission basis.
    Does anyone know if there has been a "hit" so to speak on a load of brokers who've been struck off?

    There hasnt been a mass striking off. You still see the ones that are getting an article in the financial press. I would be surprised if its got over 100 yet. However, mortgage business largely dried up and a lot of mortgage brokers didnt have enough business to trade. So some unscrupulous ones started selling their mortgage lists or setting up as agents for claims companies to target ex customers of their old employer to try and put in mis-sales.
    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.
  • Rac_1Rac_1 Forumite
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    Oh no - i am mow in a panic! We were advised (no pafe to face meeting) by Chase UK corp - who were fined by the FSA for not regulating mortgages and the MD struck off. I was told to do self cert and the advisor even told me what figures to put in. I aske if this was illegal and he said don't worry about it - everyone does it. We were first time buyers put with Preferred. We had a lot of debt but no CCJ and no missed payments.
    I contacted Gladstone Brookes who are dealing with my case whish has gone to the FSCS. We paid off the Preferred and changed to Northern Rock in 2007 completely legitimately.
    Am I now (as some of the replies to the thread indicate) going to be done for fraud and never going to be able to get a mortgage again???!! HELP:(
  • dunstonhdunstonh Forumite
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    Am I now (as some of the replies to the thread indicate) going to be done for fraud and never going to be able to get a mortgage again???!!

    Depends on how complicit you were in the fraud and if any party decides to take action against you. It is highly unlikely seeing as the mortgage has since moved on to a new lender.

    However, you may wish to look up recent threads on Gladstone Brooks as that may concern you more.
    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.
  • magpiecottagemagpiecottage
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    If you are concerned, you could complain to Gladstone Brookes that they have misled you into pursuing a complaint that you now know is on false pretences, that you want them to withdraw it from the FSCS forthwith and that you want written confirmation both that this has been done and you will incur no fee from them or the matter will be referred to the MOJ.

    That will show that you have acted in good faith.

    Once it is resolved report the matter to the MOJ anyway (in the public interest!)
  • I had 3 self cert mortgages from Kensington through a broker since 2002,i paid fees on all occasions and have the had lots of late payment fees,i remember at the time when i had bad credit the broker was very suggestive and more or less filled tte application in. At the time i was very niave .I believe these mortgages to be mis-sold.should i be making claims?
  • dunstonhdunstonh Forumite
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    I believe these mortgages to be mis-sold.should i be making claims?

    Did you commit fraud on the application? If so, do you want to be admitting as much?
    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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