Mortgage anomaly, case for comp? mis-old? need help

edited 23 August 2011 at 5:06PM in Reclaiming Mortgage Fees, Council Tax, etc
7 replies 1.2K views
DeejspencerDeejspencer Forumite
2 Posts
Hello there,
I have come across some conflicting information regarding my mortgage and wondered if anyone could give me some guidance, it would be much appreciated.

I have a northern rock 5-year fixed IO mortgage which in october will be 5 years up. Ive been recentley going through my finances to work out possible overpayments when i noticed in my Offer of loan it states
After the fixed period the intrest rate is gauranteed to be below the standard variable rate.

Ok i thought to myself nothing unusual there until i found my key facts / features document i was sent prior to my offer of loan which stated
the intrest rate applicable after the fixed period was gauranteed to be no more than 2.39% above the BOE base rate

upon this find i contacted northern rock and they basically said that the offer of loan was the only document which mattered in this case.
I then contacted the advisor who got me the mortgage and he thought it was very strange that there was different information as the key facts document is generated from the details of the mortgage from northern rock. He just told me to take it back up with northern rock and possibly put in an official complaint.

Would i have a case for compensation or claim the mortgage was mis-sold? Would they have to honor the gauranteed rate in the key facts? This just isnt sitting right with me but i dont know where i stand.

thanks for taking time to reading this

Jonny.

Replies

  • dunstonhdunstonh Forumite
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    Would i have a case for compensation or claim the mortgage was mis-sold?

    The complaint would be against the broker if you go down the mis-sale route.
    Would they have to honor the gauranteed rate in the key facts?

    No. The offer is what matters. Key features should be correct but if there is a typo it is unfortunate. A KFI is just an illustration of price. A bit like getting to the till on a mispriced item and being told you cant have it at that price. The offer states the final terms and these are what matters.
    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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    Although what DunstonH says is true, the KFI will have been generated from information provided by the lender - so the broker ought to be able to use that in his defence.

    Furthermore, it is unlikely that the OP would have been in a position to change lender on realising what had been offered was different to the KFI.

    Consequently, I think that if the KFI is wrong the lender has a case to answer.
  • roonaldoroonaldo Forumite
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    The mortgage offer overides the KFI, I consider the KFI is almost irelevent. NR's SVR is currently 4.79%. So your mortgage offer says its will be no more than this which is the final details of your mortgage. You would have accepted this mortgage offer for it to commmence.

    I cant see you having a case for mis-selling or compensation, unless they dont honour the agreement set out in your mortgage offer.
  • Thanks all for your constructive replys.

    I got back in touch with the lender and they want to see copys of my KFI, I think im just going to send them a covering letter with KFI and see what happens, what have i got to lose after all

    thanks Jonny
  • magpiecottagemagpiecottage
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    roonaldo wrote: »
    The mortgage offer overides the KFI, I consider the KFI is almost irelevent.

    However, if the KFI misled the consumer into applying for the product there would still be a complaint to answer because it could amount to a breach of FSA Principle 7.
  • roonaldoroonaldo Forumite
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    However, if the KFI misled the consumer into applying for the product there would still be a complaint to answer because it could amount to a breach of FSA Principle 7.

    yes I see what you mean, i dont understand how can this be proved? surely the mortgage offer (2006) was clear, fair and not misleading.
  • magpiecottagemagpiecottage
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    I think the way it would work is that the OP would present the original KFI to FOS and say "this is what the adviser discussed with me and I did not realise the offer was different"

    Whether the intermediary, the lender or indeed the borrower might be held responsible for any inaccuracy would be governed by MCOB 5.4 (as it was at the time).

    If the borrower gave the intermediary incorrect information it would be the borrower's fault.

    If it was correct but the fact find differed from the illustration it would be the intermediary's fault.

    If the information used to provide the illustration was correct but the offer differed, it would seem to be the fault of the lender - particularly if the application was submitted the same day that the illustration was produced. Obviously the lender could argue that the illustration system provider (eg Mortgage Brain or Trigold) was at fault but I think there is a duty of care on a lender to ensure the information is producing accurate results.
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