Kensington mortgage upper age limit

nevgeo

I everyone,
Can anyone tell me if Kensington mortgage company operated a upper age limit policy in 2004.
My friend has a mortgage with them. The mortgage was taken out in 2004 for a term of 25 year. he was 71 at the time.
The rates charge by Kensington was 4% above their standard variable rate.
I have seen an old Kensington introducer criteria for lending which state that the maximum age at the end of the terms should be 75, this term and condition was for produce issue in 2009. i have not been able to fine and details of what the age limit was in 2004.
Kensington is claiming that there was no age limit in 2004.

I would be very grateful if anyone can help.

thanks

holly_hobby

I get the gist that you are going along the "mis-sold" mortgage compo route, with a mge sold into retirement.

So lets deal with it from that angle ..

It is entirely possible this was true - many lenders did have an open ended term having no max redmpetion age (but with a max mge term of 40 yrs), which many older peeps used as an interest only lifetime mge arrangement.

This may have been what your "friend" selected.

If not self cert ... then K. should have validated the declared income and continued affordability within retirement yrs - even pre regulation the lender needed to demonstrate responsible lending re sufficient verified or delcared income to service the mge.

We currently have max mge ages and more rigourous income verification and affordability checks, following the FSA intervention on responsible lending practices.

But based on the mge continuing past his NRA, and the lender not having a contractual max age at POS, DOES NOT on its own constitue a mortgage mis-sale, several other factor would need to be considered.

What has raised the concerns of your friend regarding his mge term ?

Is it purely a compensation driven exercise ?
OR
Is it in connection with affordability and his not understanding on how a mge into retirement would impact on him ?

His age was 71 when he effected this - was he already in retirement ? (as some individuals carry on with employment post typical NRAs) ?

What is/was his occupation ?

Was income self certified ?

He selected a 25 yr term - taking him to 96 at redemption !?

How did HE think he would service the mge for the 25 yrs upto his 96th yr at redemption ?

If this is interest only, what was his plan for repaying the mge at redemption ? (hoping to have died by them isn't a plausible plan !)

Above are all qs pertinent to commence evaluating and validating a mge mis-sale (if post regulation), or demonstrating that the lender failed to make sufficient investigations into affordability post NRA - which as I say would be based on affordability not suitability if pre reg. But take note, a complaint re the lender not having a max age ceiling at POS, won't be one of them I'm afraid !

Bit more info please ....

Hope this helps

Holly

Conrad

The FSA did not regulated mortgages back then, the MCCB was the body that oversaw mortgage advice.

Hoever Kensington do have to abide by the treating customers farily principles, one of which requires them to ensure the fair treatment of customers is CENTRAL to the corporate culture.

I think your only possibility is to make a complaint on that basis and see what happens.

Forget scrabbling around trying to find the max age limit, thats a dead end.

Good luck

Be aware though that if your freind claims this was such terrible advice / action, the lender may agree and then TERMINATE THE MORTGAGE which would mean your freind would have to sell up.

holly_hobby

Conrad wrote: »

The FSA did not regulated mortgages back then

Mge Regulation was actually introduced wef 31 October 2004 - the same yr as the mge was effected (albeit possibly after this particular sale/app took place). But pre this date you are correct re the MCCB (who overviewed the Mortgage Code which was voluntarily adhered to by mge lenders and intermediaries, until its withdrawal wef 31 Oct 2004, and simultaneous replacement of FSA regulation & the MCOB - expanded on for those unfamiliar with the terms we are discussing).

However, even pre-reg, lenders have always had to be able to demonstrate responsible lending (although what's now deemed as "responsible", is far more stringent and restrictive than yrs gone by, inc the loss of SC mges), in their validation of income sufficient to support borrowings throughout the term (if post NRA) - be that for self cert or full status apps ... as this was/is pivotal to the lenders successful petition for a possession order from the courts.

Going back to the OP, if sufficient income to svc the mge post the individuals NRA was declared and verified where appropriate (under FS or SC), then there will be, and there is, no merit to their mge into retirement complaint - unless of course he is now suggesting he could have afforded a shorter term ending pre NRA (if C/I), with the subsequent higher monthly repayments - which of course would be rigiously tested if advice was proivded and appropriate to the date of sale, with the result (if proven) of the residual mge term being amended accordingly .... so this could well end up being a bitter tasting case of "be careful what you wish for" ........

Holly

nevgeo

Thanks guys for the info, every helpful. By way of further information
the mortgage was for £200,000 interest only. No vessel was set up to repay the loan at the end of the term. the income used was self cert and took no account of any retirement.

GMS

nevgeo wrote: »

Thanks guys for the info, every helpful. By way of further information
the mortgage was for £200,000 interest only. No vessel was set up to repay the loan at the end of the term. the income used was self cert and took no account of any retirement.

Why was the income self certified? Be very careful how you approach this as there may be a case to answer for a fraudulent application.

I would hazard a guess that 'sale of property' was used as the repayment vehicle. Whether this was appropriate or not is a different mater.

holly_hobby

nevgeo wrote: »

Thanks guys for the info, every helpful. By way of further information
the mortgage was for £200,000 interest only. No vessel was set up to repay the loan at the end of the term. the income used was self cert and took no account of any retirement.

Still don't know your angle with regards to an open ended mge term.

But I'll comment on the above ..

1. Arranging a mge repayment vehicle was the responsibility of the mortgagor - be that an investment medium or via sale of the property - his annual mge statements will continue to remind him of this factor.

So if he is still here when the mge is due for redemption, he will have to consider his next chess move !

2. As I thought ... I suspected this was a self cert looking at the age at app and maturity.

This means that your friend delcared a self certified/verified annual income, which he cited as true and on going for the term of the mge (foreseeable future), with the quoted figure and source of income, obviously sufficient and appropriate to support the reqd borrowings, under the lenders affordability matrix.

If his income is no longer sufficient to service the mge, than thats just unfortunate - as the lender based their lending decision on the info provided at the time of sale, the delcared fig obviously sufficient to svc the mge over the 25 yr term selected. So there is really no complaint to be lodged in such an event.

If his true income was never sufficient to service the mge ....again his struggling is not the liability of the lender, although his action of mortgage fraud would indeed be their concern.

It seems to me reading this, that your Friend secured a 200k interest only mge at 71 yrs old, self certifing his retirement income to support a 25 yr term.

However, the reality seems to be that his income figs were fudged, the reality is that he can't afford it longterm, and somewhat wants to use the fact that he was allowed a 25 yr mge when he was 71 (and the mge term wasn't somehow capped, or he be refused at outset) as some sort of get out of jail free card ..... it isn't.

If he can't afford the mge, and apart from the obvious answer of selling it, depending on the property value, he could look to switch this to a true equity release lifetime mge with a suitable lender - advance solely governed by the age of the applicant and property value i.e income is irrelevant to the app.

Such mges do not have a monthly repayment fig (although there is a provider whom does allow mthly repayments), with interest simply rolled up onto the os debt and redeemed on the mortgagors death or entry into longterm care. (he also qualifies age wise for a home reversion scheme whereby a % of equity in the property is "sold" to the provider, again redeemed on death or entry into longterm care.

If you want any more detailed info on the above arrangements, just shout.

But to top and tail the original post, NO there is no merit to any complaint re max lending age or affordability, from the info you have provided in this matter (apart from a whole can of worms that could be opened !).

Hope this helps

Holly