Bank accepted mortgage application from unauthorised broker

Occident

Thank you for your input. Very helpful. As well as being naive and a liar, she is now bone isle and unable to take responsibility. Funny the aggro that comes out on here when somone asks for advice. Oh, and for your information, if she hadn't taken the 125% mortgage and had taken 95% she wouldn now be £26000 in equity. She did not buy anything she couldn't afford either. Her case for mis-selling isn't affected whether prices go up or down. All your preconceived ideas about my friend, whom you do not know, couldn't be more wrong.

dunstonh

My friend is comfortable, had a deposit and did not need the extra funds. She cleared 2 cards with it - of course she wasn't going to incur any debt.

So, she had debts and replaced them with cheaper debts with NR. That is not a bad thing and probably saved her money.

She was not given options - it was the only mortgage the "person" informed her of. He gave it the hard sell and told her that it was an excellent opportunity to get an unsecured loan at mortgage rates. He did not tell her that is the loan becomes separated from the mortgage. the interest rate jumps by 5%.

Still likely cheaper than credit/store card debts.

first-time buyers do not all know the ropes and the rules are in place for consumer protection.

It also doesnt mean they get consumer protection when they have been conned.

She knows where he is and she knows she can sue him but there would be no point as he hasn't a bean.

As is the case of many victims of crime. It is an unfair world that the victim loses out but it doesnt mean she can get someone else to pay.

IF NR had not accepted the application because he was unauthorised - if they had followed their own procedures - then she could have got legitimate advice elsewhere so in my view their breach of MBOC rules and the Finance and Marketing Act is partially responsible for the mis-selling.

If you think that then tell her to go to a solicitor and instruct them to take Northern Rock to court on that basis.

opinions4u

It's alright for people with experience to talk of Ms Naive in derogatory terms

I wasn't. Absolutely not trying to be derogatory. I was trying to draw out an example of how the conversation may have gone. I wasn't there. I don't know.

If it was as simplistic as I'd posted it clearly isn't a case of "professional advice" being given.

He gave it the hard sell and told her that it was an excellent opportunity to get an unsecured loan at mortgage rates.

Which, presumably, it was.

He did not tell her that is the loan becomes separated from the mortgage. the interest rate jumps by 5%

Still cheaper on rate and payments that before the mortgage took place?

Look, I'm playing devils advocate a little. That low rate on the unsecured loans may have made the mortgage affordable. The interest only / income stretch offered by NR may have been the most appropriate option for her circumstances. A "normal" mortgage may have had higher monthly payments. A "normal" mortgage would have left her with higher unsecured credit costs.

She wanted a house. She got a mortgage to fund it. It's not absolutely clear to me that other mortgage options were more suitable.

So you can go round the houses, press a few levers and see what happens. But it may not get any sort of result.

_Andy_

Last night, Darth Vader came down from planet Vulcan and told me that if I didn't take Lorraine out that he'd melt my brain.

JuicyJesus

_Andy_ wrote: »

Last night, Darth Vader came down from planet Vulcan and told me that if I didn't take Lorraine out that he'd melt my brain.

From this post, I'll hazard a guess that Lorraine was not, in fact, taken out in the end.

holly_hobby

Without wishing to appear obstructive - I am also unsure why a new thread has been started on this subject - when the initial thread started in August, stated that you had submitted a formal complaint with FSCS, and also obtained relevant and good advice from those who have also again assisted on this thread (i.e Duns. and others).


What was the result of the complaint with FSCS ?


Why do you feel the responses provided in your August thread were unhelpful, prompting your re-post of the issue ?


Holly

Occident

The responses in August were not unhelpful - things have moved on since then, hence the new thread. FSCS can only deal with firms who were authorised. You are not being obstructive and you weren't aggressive or bloody rude like some of the other posters. I asked for advice and ended up with my friend's character getting ripped to shreds. Never again.

holly_hobby

I'm sorry you are a little disappointed with some of the responses. I agree different individuals have different styles, some are abrupt some a bit softer, but that doesn't mean they are unsympathetic or won't try and help where possible - sometimes you have to look at what's been said, rather than the style or manner in which its published. I'm sure that no one intentionally wants to cause any hurt with their comments.

That said, lets move to your problem, I didn't contribute to your inital thread so forgive me for not being fully familiar, and if I ask things that have already been covered.

You say things have moved on since your initial post in Aug - how so ?

Without getting into the who is responsible or what can be done etc .. etc .. (just yet) ... what does your Friend want to achieve in making her complaint (i.e how could this be resolved) ?

Holly

Occident

It may not be possible to resolve and she has accepted that but one avenue she wanted to explore is what, if any, responsibility Northern Rock had for her financial loss as they accepted an application from an unauthorised broker and in doing so breached the Financial and Marketing Act and MCOB rules. Had they followed their own laid down procedures about intermediary applications the application would not have been accepted and she could then have had an honest broker with sound advice. She did suffer a loss because the unsecured part of the Together mortgage may have a lower interest rate but is spread over 25 years and is thousands of pounds more expensive than paying off a couple of credit cards that have a higher interest rate. I have spoken to her since starting this thread and it seems the way forward is to go for a service complaint to Northern Rock and take that forward to the FOS if necessary.

I wasn't looking for "soft" replies - just advice on my query in a civilised manner.

Thrugelmir

Occident wrote: »

She did suffer a loss because the unsecured part of the Together mortgage may have a lower interest rate but is spread over 25 years and is thousands of pounds more expensive than paying off a couple of credit cards that have a higher interest rate.

There was/is nothing to stop your friend overpaying the unsecured element of the loan. So this argument holds no water as any loss would have been at their judgement.