MIG taken out now being chased for 'losses'

maninthestreet

MIG's were a rip-off (are they still required in some circumstances even now?) - the mortage lender would not lend money to the borrower unless they paid the MIG premium, but the MIG only protects the lender, not the borrower from any short-fall if the house is re-possessed and sold for less then the oustanding mortgage debt. Then the borrowwer has a liability to the insurance company to re-pay the shortfall - it's a double whammy.

Wh05apk

maninthestreet wrote: »

MIG's were a rip-off (are they still required in some circumstances even now?) - the mortage lender would not lend money to the borrower unless they paid the MIG premium, but the MIG only protects the lender, not the borrower from any short-fall if the house is re-possessed and sold for less then the oustanding mortgage debt. Then the borrowwer has a liability to the insurance company to re-pay the shortfall - it's a double whammy.

MIGs are a fact of life, it's built into the deal cost, so if you don't like it find another lender, if you can't find another lender, pay it or continue to live with mummy & daddy!

Few lenders charge a MIG fee now (directly)

Conrad

Joe_Bloggs wrote: »

Let the lender pay the premium then.
J_B.

No lenders haggle over thier products and contractual details.

OP - your partner can just say he's about to leave on a 3 year European motorcycle trip / to live in Israel on a farm etc, but is happy to offer a lower amount in good faith and settle now.

Conrad

maninthestreet wrote: »

MIG's were a rip-off (are they still required in some circumstances even now?) - the mortage lender would not lend money to the borrower unless they paid the MIG premium, but the MIG only protects the lender, not the borrower from any short-fall if the house is re-possessed and sold for less then the oustanding mortgage debt. Then the borrowwer has a liability to the insurance company to re-pay the shortfall - it's a double whammy.

And the alternative is higher interest rates, takes your pick:beer:

Thrugelmir

maninthestreet wrote: »

Then the borrowwer has a liability to the insurance company to re-pay the shortfall - it's a double whammy.

Without this claw back. MIG's would be totally exposed to fraud (i.e. the hiding of assets).

opinions4u

maninthestreet wrote: »

MIG's were a rip-off (are they still required in some circumstances even now?) - the mortage lender would not lend money to the borrower unless they paid the MIG premium, but the MIG only protects the lender, not the borrower from any short-fall if the house is re-possessed and sold for less then the oustanding mortgage debt. Then the borrowwer has a liability to the insurance company to re-pay the shortfall - it's a double whammy.

Why should the borrower benefit from failing to make their mortgage payments?

emmdee57

Guys, thanks for your responses. Judging by your responses and thinking about it, it appears that MIGs are a rip off and it looks like I have been sold something that does not protect my partner at all, just the lender. I am totally peeved as that MIG cost me over £3500, money that I could have placed in my own pocket. This is something that needs to be looked at by the same people that declared Payment Protection Insurance was a scam.

Wh05apk

MIGS are/were totally transparent, you were aware you were paying for it when you took the mortgage, your choice was either to pay the mig or find another mortgage, which I doubt if you could have done.

MIGs, are just like arrangement fees/interest rates, you need to look at the whole package, you cannot take a package and pick and chose what fees you pay.

dunstonh

his is something that needs to be looked at by the same people that declared Payment Protection Insurance was a scam.

Payment protection hasnt been declared a scam. PPI is being set up every day quite fairly and normally. The issue was over the sales techniques by some distribution channels.

MIG has actually been rumoured to be making a come back. Although personally, I dont see it at this time. MIG wasnt a scam. It was an explicit cost to protect the lender in certain circumstances. When MIGs went away, the costs were moved into the interest rates and other fees and that can end up costing a lot more over the term than paying it explicitly.

No-one liked paying it but you cannot call it a scam.

Senior_Paper_Monitor

It would appear to me that deveopments since have proved that the lender acted sensibly in insisting that you put such cover in place if they were going to lend !

The ones who possibly have more of a right to whinge are those who paid it and the mortgage.