No Endowment

strensall

HI everyone
Im after a bit of advise from the the people who will know more about a problem than the bank/building society namely you.
my parents have been paying the interest on an endowment morgage and have three years left on there term they have now found out that they have not got an endowment.They have no paperwork to look at and they changed from a repayment morgage some years ago to the endowment morgage.Now as far as I can remember when I took out My first morgage the lender organized my endowment aswell as the interest payments and I thought there's would have also all the bank will say at the moment is that they will look into it as you can imagine they are worried sick so any advise ar idea's from anyone will be most appreciated.
gary

dunstonh

The bank has no obligation to sell an endowment and indeed a number of providers in the past didnt sell them (C&G being a good example of that).

There is no such thing as an endowment mortgage. It is an interest only mortgage. The bank supplies the interest only mortgage, the insurance company provide the endowment. They bank may have offered a insurance company product but may not have done.

Old mortgages often do record who the endowment is with or will be with so that is possibly what the bank is looking into.

However, dont get your parents hope up. Things like "why didnt they notice they werent paying an endowment for 20 odd years" will be asked. Even if complaint upheld, they will still have to fund the equivalent cost of the premiums over the period with the bank making up the difference.

defender_of_the_weak

No no no

There is precedent for these sorts of cases at the Ombudsmans office. The key issue is did it start as interest only and endowment, was it assigned, did the client/ lender know the policy has stopped or not been started. If the policy was assigned and subsequently lapsed the lender has a duty of care to make sure alternative payment is put in place. If they have not then the lender may be liable for the amount of capital that would have been paid to date if they had kept their eye on the ball.

Redress would not include a request for all the missing premiums. The legal precedent is that these would have been dissipated over time as part of the general household budget. These are not simple cases to handle but we have won these types of complaint over the last four years so it is do-ble

strensall

Thanks for the promt reply from you both we are waiting for 10 working days for halifax to find out what has gone wrong in the mean time Ive got the money to pay off there morgage but from reading other posts this could throw up all sort of problems aswell.thanks again for your reply I will keep people informed it may come in handy for other people.
gary

dunstonh

Its not exactly the same as yours but I found this case in the FOS publications when I was reading one earlier.

21/6
savings endowment policy – cancellation by firm as premiums not paid
[FONT=Verdana, Arial, Helvetica, sans-serif]Mr and Mrs C took out a savings endowment policy in May 1992. They were expecting the policy to mature in May 2002, so they contacted the firm when they had heard nothing by the end of that month. The couple were shocked when the firm told them that their policy had lapsed, without value, in November 1992. The firm said this had happened because the couple had stopped paying the premiums.[/FONT]

[FONT=Verdana, Arial, Helvetica, sans-serif]Mr and Mrs C were very concerned that the firm had never told them the policy had lapsed. They insisted that they had not cancelled the standing order for the premiums. [/FONT]

[FONT=Verdana, Arial, Helvetica, sans-serif]The firm was unable to establish exactly what had happened or whether it had written to the couple about the premiums. It was only obliged to keep its records for six years after the end of a contract, so it no longer had any details of the couple’s policy or of its correspondence with them. [/FONT]
[FONT=Verdana, Arial, Helvetica, sans-serif]
complaint rejected
We explained to Mr and Mrs C that the onus had been on them to ensure they paid the premiums for their policy. We thought they should have noticed that they had not been paying their premiums for 10 years. We did not consider that they had suffered a loss, since they had the benefit of the money they would otherwise have paid in premiums. [/FONT]

mystic_trev

dunstonh wrote: »

We explained to Mr and Mrs C that the onus had been on them to ensure they paid the premiums for their policy. We thought they should have noticed that they had not been paying their premiums for 10 years. We did not consider that they had suffered a loss, since they had the benefit of the money they would otherwise have paid in premiums. [/SIZE][/FONT]

and what about all those people who've got compensation from Life companies due to shortfalls in their Endowments? I wonder how many have spent the compensation on holidays or plasma screen TV's Instead of sorting out the shortfall on their mortgages! Just wait and see what'll happen in a few years time when these dopes try to sue for more compensation

mystic_trev

defender_of_the_weak wrote: »

These are not simple cases to handle but we have won these types of complaint over the last four years so it is do-ble

OK If you've won these type of cases, show us an example.

EdInvestor

I'd have thought there may be a different approach to a mortgage endowment, as opposed to a savings endowment, simply because it's much easier for confusion to arise when people are actually making a mortgage payment every month, than if they are making no payment of any kind.

An inexperienced person might not realise that they should have been making two separate payments, especially if they were sold the endowment by an employee of the lender, whatever the technical status of the employee at the time of the sale.

absolutebounder

This is good most of the time we have people whinging about the performance of their endowment and making up excuses as to why they were mis-sold so they can fiddle some compensation. Now we have some one complaining they didnt get one. Perhaps you should thank the lender for not mis-selling an endowment

regularsaver1

The OP says that the mortgage was changed from a repayment mortgage some years ago, making it sound like it was full repayment to start with rather than interest only

Halifax did used to have Standard Life representatives in branches

defender_of_the_weak

You can check the types of cases that will possibly be upheld on the fos website in the guidance notes. An example of a recent case if you want it, mortgage taken in 1989, assigned policy lapses in 1991, fos took the view that the lender should have informed the borrowers and put in place alternate payment method. Not one of these cases has been upheld first time by the companies and every one has had to go to the ombudsman