Possibly mis-sold mortgage PPI

originalgoonie

Hi,

Back in 2007 my husband and I went through a mortgage 'broker' who was based in another area to where we lived, so all dealings with him were either over the phone and the paperwork posted to us to sign. He sold us a 100%+ Northern Rock Together mortgage that was a mortgage for £106K with a large unsecured loan of £25,625 with it. £19k of this large loan was to consolidate two of my husbands loans, wich weren't even this amount to begin with, but with including early repayment charges and the loans being shuffled into one, effectively made the debt bigger. However we were told we couldn't afford the mortgage unless with did this and the payments for the unsecured loan were spread over the 28 years along with the mortgage so they would be much lower than what my husband was paying then. The rest of the unsecured loan covered the usual 'deposit', solicitor fees, etc with buying a home.

This broker also did a whole package of selling my husband life insurance (I'm already covered from work), home and contents cover and Mortgage PPI saying these were the things we would need now we owned a home. Effectively this broker completed the paperwork for us, didn't give the options but just said that he had gotten the best deals for us.

The mortgage PPI wasn't through Northern Rock but through Paymentsheild, which is under written by Aviva. The mortgage PPI was to cover unemployment and disability. Basically both my husband and I have very safe jobs, where reduncancy isn't possible and the only way to be out of a job would be to be fired, in wich case the policy wouldn't pay out. Also pretty much both of our jobs cover us in relation to sick pay and disability. The broker knew what our occupations were, so would have had a clue that the policy wasn't really suitable for us but didn't ask. So we went on paying the £47-57 monthly premiums from 2007 up until last year when we realised we were effectively paying for a useless policy and cancelled it. These premiums also included the payments for the unsecured loan in it as it comes out as one payment by NR.

So a few questions here:

Do you think I have a case to claim back for mis-sold mortgage PPI for the 3.5 years we did pay for the policy?

Also, I know it's not quite in the right part of the forum, but has anyone else had this happen to them when being sold a Northern Rock Together Mortgage, that they wouldn't be able to afford the mortgage unless they consolidated everything into this one large loan with them and spread out the costs over the term of the mortgage? (yes, I know now from hindsight how naive and dumb my husband were to fall for all of these bad financial decisions, but the broker made it all seem so easy and if we waited to save up for a deposit we would never get on the property ladder as prices would be too high, so NO bashing comments please!)

Effectively Northern Rock actually made my husband's debt even bigger and put us straight into negative equity, which wasn't even discussed or pointed out by the broker. Nor did he mention if we dicided to remortgage with another provider after our fixed term, but kept the unsecured loan that the unsecured loan would rise by 8% interest above their SVR. I know it's in the small print but what a thing not to mention, wasnt even aware of this until saw it on another forum today! Shocked and outraged at NR's shot gun wedding into staying with them unless you're able to pay off the loan.

Sorry for such a long post, but any advice help appreciated! It just all seems so doggedly sold to me.

dunstonh

This broker also did a whole package of selling my husband life insurance (I'm already covered from work), home and contents cover and Mortgage PPI saying these were the things we would need now we owned a home. Effectively this broker completed the paperwork for us, didn't give the options but just said that he had gotten the best deals for us.

Death on service is primarily used to cover lost income and pension provision for the spouse. Not to cover the mortgage. There is no requirement to include it in the covering of a debt. So, it would be logical to recommend life assurance in this case.

Basically both my husband and I have very safe jobs, where reduncancy isn't possible

What type of job is that then?

Also pretty much both of our jobs cover us in relation to sick pay and disability.

Did you tell the broker this?

Effectively this broker completed the paperwork for us, didn't give the options but just said that he had gotten the best deals for us.

If he is whole of market or independent then his remit is not to give you the options for you to decide but to tell you what you need.

The mortgage PPI wasn't through Northern Rock but through Paymentsheild, which is under written by Aviva.

Good, that means it was set up correctly which elimates the major complaint reason for MPPI (single premium is bad - monthly direct debit is good)

Do you think I have a case to claim back for mis-sold mortgage PPI for the 3.5 years we did pay for the policy?

Nothing you have said has indicated any grounds for complaint.

Also, I know it's not quite in the right part of the forum, but has anyone else had this happen to them when being sold a Northern Rock Together Mortgage, that they wouldn't be able to afford the mortgage unless they consolidated everything into this one large loan with them and spread out the costs over the term of the mortgage? (yes, I know now from hindsight how naive and dumb my husband were to fall for all of these bad financial decisions, but the broker made it all seem so easy and if we waited to save up for a deposit we would never get on the property ladder as prices would be too high, so NO bashing comments please!)

Yes. Lenders typically go by affordability and in the case of NR, they liked to consolidate and it made the lending decision easier with them.

The broker is there to facilitate what you ask for (but remain compliant with the rules). Your choice was to buy then or save for deposit. You made the choice to buy.

Effectively Northern Rock actually made my husband's debt even bigger and put us straight into negative equity, which wasn't even discussed or pointed out by the broker.

The loan is not secured and therefore not classed as negative equity.

Nor did he mention if we dicided to remortgage with another provider after our fixed term, but kept the unsecured loan that the unsecured loan would rise by 8% interest above their SVR.

It is in the key features illustration and the contract you signed.

Shocked and outraged at NR's shot gun wedding into staying with them unless you're able to pay off the loan.

Again, logical from an NR point of view. If you dont like that then dont borrow the money in the first place. Or in your case, as it is too late, if you dont like the loan with NR then take out another loan and repay the NR one.

magpiecottage

originalgoonie wrote: »

all dealings with him were either over the phone and the paperwork posted to us to sign.

That rules out the possibility that you were pressurised then because you had a chance to read the documents before applying.

we were told we couldn't afford the mortgage unless with did this and the payments for the unsecured loan were spread over the 28 years along with the mortgage so they would be much lower than what my husband was paying then. The rest of the unsecured loan covered the usual 'deposit', solicitor fees, etc with buying a home.

That does make sense. You might have a complaint about this but only if you can demonstrate that a different lender would have provided the mortgage you needed and that you could pay the deposit and fees without them.

This broker also did a whole package of selling my husband life insurance

Which you need because you are financially interdependent

(I'm already covered from work)

except that who it is paid to is at the discretion of the trustees, not you personally (although you should complete and submit an expression of wish),

home and contents cover

Buildings cover is a condition of the loan and you would be unwise not to have contents cover

and Mortgage PPI

because if you lost your income through illness or unemployment you could lose your home.

saying these were the things we would need now we owned a home.

Which, for the reasons I have given, you did.

Basically both my husband and I have very safe jobs, where reduncancy isn't possible

It will be easy to show that statement up for the utter nonsense it is. A large proportion of the adjudicators at FOS are contractors who were in "very safe jobs" with banks, building societies and insurance companies.

Also pretty much both of our jobs cover us in relation to sick pay and disability

I have seen that said by many complainants and found in reality it to be inadequate.

The broker knew what our occupations were, so would have had a clue that the policy wasn't really suitable for us but didn't ask.

More likely he realised that you needed the cover.

we realised we were effectively paying for a useless policy and cancelled it.

Apart from the fact that you have been fortunate enough not to need to claim (a "risk" with any type of insurance), it seems to have provided valuable cover.

Do you think I have a case to claim back for mis-sold mortgage PPI for the 3.5 years we did pay for the policy?

Not on the basis of what you have told us.

has anyone else had this happen to them when being sold a Northern Rock Together Mortgage, that they wouldn't be able to afford the mortgage unless they consolidated everything into this one large loan with them and spread out the costs over the term of the mortgage?

That would be a matter of commercial judgement for Northern Rock. However, it seems you did not have a deposit or funds to meet the fees. Not only that but you had run up other debts. This suggests you were stretching yourselves financially - so it seems quite plausible.

if we waited to save up for a deposit we would never get on the property ladder as prices would be too high

That would have been the perception through most of 2007

Effectively Northern Rock actually made my husband's debt even bigger

No, you did that, because you chose to borrow.

and put us straight into negative equity, which wasn't even discussed or pointed out by the broker.

As DunstonH says, it did not because the extra borrowing is unsecured.

Nor did he mention if we dicided to remortgage with another provider after our fixed term, but kept the unsecured loan that the unsecured loan would rise by 8% interest above their SVR. I know it's in the small print but what a thing not to mention, wasnt even aware of this until saw it on another forum today!

As DunstonH says, it was clearly explained in the Key Facts document. As this will have been sent to you with the application form and another copy sent by Northern Rock once the application had been accepted.

So it looks like you had the opportunity to read the documents but did not do so. I cannot see how that is the broker's fault.

I also suspect that even if you did you were intent on buying your home anyway - after all, mortgage brokers do not contact consumers at the other end of the country out of the blue so you must have initiated the contact.


So I do not see any grounds for complaint.

_Andy_

Yet again a thread with 'mis sold' in the title where there wasn't any such thing

Help_Needed_3

Hi, New to this forum. I asked for a mortgage at A and L, in 2005. It was a joint mortgage with my husband. When I was at interview stage and application was being processed by A and L, mortgage advisor.... I was told that it was 'GREEN'..... but only if I agreed to insurance cover.... both life and contents insurance. The mortgage advisor said that she would phone another member of staff. A few minutes later, a male assistant, walked into interview and stood at desk telling me that L and G, Life Insurance and Zurich Insurance for contents and building cover was what we should take. P.S. My husband never had to call into A and L to sign anything.... Mortgage or Insurance. All documents were given to me to take home.

I have never received anything directly, correspondence wise from L and G re cover but requested details by phone in November 2011.
It reads Decreasing Term Assurance which does not cover outstanding balance of mortgage. It costs £55.31 pm. Also from L and G records it says that cover started in December 2005, even though mortgage started 23 August 2005!!! This information baffled me.

Zurich contents and building insurance costs £44 p.m.

I have sent a complaint to Santander (previously A and L). They replied a few weeks later and said I have no complaint as I do not have PPI.
I phoned in response to their reply and they said that I do not have any grounds for complaining.

I then phoned again and got another member of staff who said that she would send me a questionnaire to complete.

After that was received by Santander, they sent me an authority to sign for them to request details of L and G Insurance we were sold.

When I sent back questionnaire I was asked why I feel that I was missold insurance and I said that I was not offered advice on different products. I was told that Insurance was essential for mortgage to go ahead.

I am now waiting for a response, as Santander have all information necessary to make a decision.

Any advice what to do.......Please!!!!

Help_Needed_3

Will I AUTOMATICALLY see replies to my post, or do I have to log in?

roonaldo

Help_Needed wrote: »

Hi, New to this forum. I asked for a mortgage at A and L, in 2005. It was a joint mortgage with my husband. When I was at interview stage and application was being processed by A and L, mortgage advisor.... I was told that it was 'GREEN'..... but only if I agreed to insurance cover.... both life and contents insurance. The mortgage advisor said that she would phone another member of staff. A few minutes later, a male assistant, walked into interview and stood at desk telling me that L and G, Life Insurance and Zurich Insurance for contents and building cover was what we should take. P.S. My husband never had to call into A and L to sign anything.... Mortgage or Insurance. All documents were given to me to take home.

I have never received anything directly, correspondence wise from L and G re cover but requested details by phone in November 2011.
It reads Decreasing Term Assurance which does not cover outstanding balance of mortgage. It costs £55.31 pm. Also from L and G records it says that cover started in December 2005, even though mortgage started 23 August 2005!!! This information baffled me.

Zurich contents and building insurance costs £44 p.m.

I have sent a complaint to Santander (previously A and L). They replied a few weeks later and said I have no complaint as I do not have PPI.
I phoned in response to their reply and they said that I do not have any grounds for complaining.

I then phoned again and got another member of staff who said that she would send me a questionnaire to complete.

After that was received by Santander, they sent me an authority to sign for them to request details of L and G Insurance we were sold.

When I sent back questionnaire I was asked why I feel that I was missold insurance and I said that I was not offered advice on different products. I was told that Insurance was essential for mortgage to go ahead.

I am now waiting for a response, as Santander have all information necessary to make a decision.

Any advice what to do.......Please!!!!

You've hijacked someone elses thread!

In 2005 you were not told that the insurance was essential, it will be detailed on your KFI, mortgage offer, application forms that the insurance is optional.

A&L/ Santander are a bank, they are tied to their own products, they are not going to offer you advice on products they do not sell. Again this will be defended in the form of the Initial Disclosure Document (IDD) you would have been given (as compulsory) which details the extent of the service and products you will be offered.

So you took out buildings insurance and life cover. The adviser would have completed a demands and needs statement. Sorry but what is wrong with the insurance you took out, why is it wrong?

Taking insurance to cover your most important asset is not wrong nor illegal.

dunstonh

I phoned in response to their reply and they said that I do not have any grounds for complaining.

I agree with them.

When I sent back questionnaire I was asked why I feel that I was missold insurance and I said that I was not offered advice on different products. I was told that Insurance was essential for mortgage to go ahead.

They are tied agents and sell their own products. It would actually be a breach of FSA rules if they did what you are complaining about. There is and never has been any requirement for tied agents to tell you about other providers. That is a daft complaint to make and easily rejected.

Building insurance is compulsory for a mortgage. So, you would have been told that was. However, unless you have any evidence to the rest being told as compulsory then again its an easy rejection. Especially as nearly everyone takes out life assurance on a mortgage and you seem to be saying you would buck that trend. The odds are that your complaint is being treated as an opportunistic try-it-on.

roonaldo has covered the points on documentation already which will also work against you.

Help_Needed_3

Thanks for your responses.