Flexible Mortgage - bank gave incorrect advice

ALIBOBSY

Isn't there someone like the FOS (or perhaps they themselves), that the op could take the complaint to?
Not sure myself as never had a mortgage issue so far.

Ali x

betmunch

Agreed, the new propsals will help by forcing the Banks to employ qualified staff, and also by making them responsible when a staff member sells and unsuitable product which seems to be what was done here in my mind.

The general public trust the banks and take what is said as gospel, they then find out when its too late they have been given a non-advised service and lost all their consumer protection.

I apreciate that all information given on a non-advised sale should be accurate, but in reality it doesnt work like that. This client had a very specific need that they asked about and were at best mis-informed, at worst lied to.

My concern here is for the OP as, assuming there was no fraud on the application, I think they have been royally shafted and I suspect no chance of getting any out of it due to the bank abuse of the non-advised sales rules

atopia02

Hello ppl, sorry for late response, have been working all day...yes Santander were advised of the loan...I should have said - and apologies for any confusion - the loan was coming from our families collectively, £25K each and we declared to Santander that we would be paying both our families back per month in addition to the mortgage. unfortunately I do not wish to go into the family side too much but nevertheless we are under an obligation to pay them back, at a reduced rate...anyways Santander were aware of this.

Santander did not seem concerned as it was not an official "debt" we were told. Also the standard security over the property was going to be in my husbands and my name. So the bank were content.

We took out £130K and we provided a breakdown of how much would be paid per month, our debts (not much was asked from us etc). We also said that we had no other commitments (aside from what was declared including the potential loan and explained that 50% of our salary would be for the mortgage) and at that time could afford £1200 per month, however we did say we were trying for a family and were advised that our payments could go up or down at our convenience in accordance with the mortgage we were choosing to go with. We chose to pay £1200 over a 12 year term as that was do-able and we had this much left over after bills and so forth and again this was discussed. I recall this particularly as I debated taking out a longer term but were informed by advisor that our type of mortgage meant that within a few months if we were not satisfied we could change the terms - as simple as that - were the words the advisor used. Nothing about jumping through hoops or time limits. We acted on what we were informed, or rather misinformed. I remember cheekily asking the advisor so if I fall pregnant next month and cant cope, are you saying I can contact you to change the terms and she said yes, I had no idea there was a mortgage centre to go through...I thought you came into the branch to do this. At no point was I corrected.

@Betmunch, I understand what you say but in all honesty everything was above board, all declared and my husband even took in a list of questions to ask....some compiled from this site! He wrote the answers beside some of the questions but specifically asked about timframes and penalties and wrote too good to be true...hubby said this and again we were told that this is the advantage of this type of mortgage...(I am parphrasing her exact words). But hubby noted what she said in response. It was like an interview!

@kingstreet, my husband and I discussed that exact option and almost ended up having a barny...I was very hormonal, I know now why but I specifically recall being told by the advisor that it is up to us, but "remember you can change if it is not working out..no penalties", nothing mentioned about underwriters. I foolishly went for this. This was a first mortgage for us.

@letussee I checked all paperwork before signing, as the adviser was getting impatient as it was 5.30pm and she was keen to get matters concluded as bank closed at 5pm. I took my time reading the small print and I mentioned this to the advisor that there was nothing about time frames, so that backed up what the advisor was saying about changing at any time with no problems or penalties. The only penalty incurred would be if we changed to another bank within a year. The advisor printed off what would be sent to us normally by post by the mortgage centre (and I later compared this and this was the same). My husband also obtained an additional document from her which was an internal checklist of sorts kept for her records only and some personal notes she had made. I think she wanted us to leave, she would have given us anything.

Insofar as the comment regarding an advised or non advised sale, I think this was a non advised sale "on record" as we approached her with the product we wanted but asked her for detailed advice on it. I am not sure how that works, but I acted on her advice as I asked her to go through the mortgage and its benefits and cons. I was a pain that day as I told her I wasnt comfortable going through with it unless I knew more about it as hubby had done research on it and not me. I asked her about the conditions and said I would not proceed if I did not know about it. Hubby began to tell me about it and I stopped him saying that he was not as qualified as the advisor and would she explain. When we went to speak with her last month, she did admit to the above conversations although seemed wary this time when hubby started takign notes, apologised again and said she did not think that anyone would be wanting to change within the first year the terms of thier mortgage. I explaned that wasnt good enough and I would be taking it further. I explained that Santander cannot enforce something on us that is not in writing or intimated to the client and this is her problem not ours. She did at this stage poiint out that even if we apply in 6 months to change the terms it is not guranteed and at the underwriters discretion and she should have told us this. I could have swung for her and was very harsh wanting to know why she is telling is this now...she said we had every right to complain but to leave matters until February 2012 (6 months from taking out the mortgage) - hope for the best and take it from there. Hubby was very accommodating...i wasnt and said I would be taking it further.

Sorry for the rant...Hope this helps.

I am just gutted, I read all the paperwork, asked again for her reassurance and made note of this and told I would be pursuing this further if we encountered problems and that I am taking this mortgage out as we could change.

I fail to see how such a large institution can get away with such an act...surely they must attend some training to be a mortgage advisor?

Thrugelmir

atopia02 wrote: »

I fail to see how such a large institution can get away with such an act...surely they must attend some training to be a mortgage advisor?

Did your solicitor declare the source of deposit as being a "family" loan? As this is different to a passing conversation with the advisor.

It seems that you had decided to opt for the shorter term. This was in no way a condition of the mortgage advance. However your application may have been accepted by the underwriters as the shorter term would have resulted in a reduced lending exposure far quicker.

The advisor you saw would only have been able to pass comment depending on bank policy at that time. Underwriting criteria has tightened considerably in recent months. The bank is within its rights to effect such a change, as this is outside of any terms and conditions of your existing contract. Any change to the terms and conditions would in effect be a new contract.

From the banks perspective, the six month rule applies to various scenarios with mortgages. For the simple reason of stopping people making mortgage applications under false pretances and "bending the rules" to suit their own circumstances.

atopia02

@thruglemir:

Did your solicitor declare the source of deposit as being a "family" loan? As this is different to a passing conversation with the advisor.

Yep solicitor did. He had to for the standard security purposes I guess as the loan was a private arrangement. Oh well thats us truly shafted...might try the ombudsman though as a final resort and an official letter of complaint as so far it has all been via telephone. What gets me is that the advisor admitted she gave incorrect advice and should have checked the terms with the mortgage centre and understood our predicament but her hands were tied.

betmunch

I am afraid that you are in a very bad position then, and a prime example of why I tell people never to trust a bank.

From the useless advisors point of view she is probably ubder immense pressure to hit targets so will probably say pretty much anything to get a signature on the paperwork. This in no way excuses whats happened.

If I was you I would make a complaint and push it as far as possible. You have to exhaust the Abbeys internal complaints proceedure before taking it to the FOS. However I think Abbey will hide behind the non-advised sale rules. As Let Us See said, you should still be given accurate information which clearly you wasnt, you case will rely on you either proving what was said, or the advisor admitting what she said.

You will also need to be very clear with what you want done about it. I wouls suggest that you dont settle unless they change your term to 25 years. This is within their powers to do, and it wont lose them your custom. I would also suggest the advisor you saw be disaplined and retrained, although this wont help your personnal situation, it may help others in future.

Incidentally, this is exactly the situation that should be stopped by the new rules.

Good Luck

beecher2

atopia02 wrote: »

Oh well thats us truly shafted.

Try to keep things in perspective. You can apply to change the term in February which is when your maternity leave starts. You should complain, but try not to let it get you too stressed out, and try to focus on finding a solution for you rather than continually going over what has happened.

Let_Us_See

A classic case of a bank hiding behind its 'non-advice' cop out. I could write an essay on the negatives and pitfalls of an non-advice service, and even although your husband took time to research products and made a list of relevant questions, you still end up in the mire. Firstly, as Santander (and any other bank) uses generic processing documentation you should at the very least have requested separate written confirmation that the specific features you required were applicable to the mortgage scheme you had selected before submission of the application. Secondly, the mortgage offer forms the contract between yourselves and Santander, and if the terms and conditions you required were not listed then they do not apply.

However, it is time to move on. You mention Santander has admitted providing wrong information (cannot be advice, as non-advised service), but was this in writing? If it was, then continue your complaint but make sure everything is in writing. However, I have a feeling Santander will hide behind their non-advice status, which gives you two options. One, make such a fuss in the hope they will extend the term, or two, follow the complaints procedure to FOS. I wish you luck as it will not be plain sailing.

atopia02

Thank you for your advice everyone. i think over the Christmas holidays I am going to collate everything and write an official letter of complaint to the branch and copy the head office into it. I intend to progress this as far as I can to avoid some other person falling into the same trap. I do not intend giving up.

thank you again.

betmunch

Be very specific in what you expect them to do about it and Good Luck

Please let us know how it goes