Mis-sold Mortgage

chrisalldritt

I have an interest only mortgage with nothing in place to repay the capital and have been told by a reclaims company that I should not have been sold this mortgage in the first place and can reclaim "loads of money". I am worried about pursuing this as I still have 12 years to run on the mortgage, am in financial difficulties since the death of my husband, and on benefits. Can anyone with experience of this type of reclaim let me know how they got on please.

Jimbo1976

Firstly ignore the claims management company. If you have a real justified complaint then you don't need their help.

How did you intend to pay off your mortgage when you took out your original loan? Just because you have an interest only loan, it does not mean that it was mis sold. Do you have any of the paperwork from your mortgage application?

Look through your paperwork and see what you have. When did you take the loan out?

dunstonh

I have an interest only mortgage with nothing in place to repay the capital and have been told by a reclaims company that I should not have been sold this mortgage in the first place and can reclaim "loads of money".

There are a few scam cold calling companies that do this. Typically, they try and appeal to your greed by suggesting a large pay off. However, at some point in the process (sometimes as many of 4-8 weeks down the road) they then introduce a fee you need to pay to take your case to solicitors. Usually around £500. That is where they make their money. Often they will try a PPI complaint at the same time to see if they get lucky on that as well.

am in financial difficulties since the death of my husband, and on benefits.

I'm sorry but none of that makes it mis-sold. Very unfortunate and its a shame there was no life assurance in place but it is a risk of borrowing money.

Can anyone with experience of this type of reclaim let me know how they got on please.

As you have given no indication of any mis-sale in your post, can you first tell us why you think you were mis-sold?

When taking out the interest only mortgage, what did you tell the lender you had in place to repay the mortgage at the end of the term? What happened to that repayment vehicle? Did you actually tell them porkies and planned to have a vehicle later but never got round to it?

Having an interest only mortgage does not make it mis-sold. I have an interest only mortgage. A significant proportion of the population do.

magpiecottage

Whilst I am sorry to learn of your loss, your lender will have issued statement each year warning your loan is interest-only and it is your responsibility to put a repayment vehicle in place.

If it is more than six years since you took the mortgage out then you will probably find complaint is timebarred.

In your particular circumstances, you may have grounds for complaint if you were not advised to take out life cover - but there can be no certainty of this.

ACG

Im going to echo Magpie - if you went via an advisor they should have atleast discussed protection with you - in the form of life insurance, critical illness, income protection etc.

If this was never discussed then you may have a claim on that, however if you declined it then you are pretty much stuck.

holly_hobby

At the risk of repeating whats already been stated, effecting an interest only mge per se, is not a mis-sale.

Negligence would be proven if following a financial review and advice at the time of the sale, you didn't have sufficient existing provision, or indicated that you wanted to pch a repayment vehicle - to which the adviser failed in their duty of care/due diligence to address (even if their recommendations were rejected by you).

At the very least (and IF advice wasn't restricted to sourcing a mge provider/deal only) and in a family situation with dependants, I would expect life cover to have been addressed and a suitable recommendation for any determined needs. If advice was neither restricted to the mge itself, and you indeed had a denoted shortfall in provision, and IF this wasn't discussed within the recommendations of the adviser, I would cite this as negligence of the adviser - but that has nothing to do with the sale of the mge itself (the sale of which was not regulated pre 31 Oct 2004), but rather the proficiency/failure re protection/finanical advice, of the adviser.

A further point that I feel may be salient is that advisers selling I/O mges would saw off their leg to sell an accompanying endowment, as to be crude thats were the high commissions were generated. So for an adviser (if authorised to do so), to apparently fail to even attempt to sell you one, or indeed any other form of protection policy (life, health or income), highly unusual - and in my expereince (if correct) probably indicates a restricted sale event (or non authorised adviser). A restricted sale is where the indvidual "restricts" any info provided and advice sought to the nominated matter in isolation, in this case a mortgage, possibly even citing that they were to independently effect a repayment vehicle/contract) from an alternative source/personal or family financial adviser, etc ..... ).

So important questions are ...

1. Why you elected to effect an interest only mge (with no purchase of, or the provision of an existing repayment vehicle ), over a capital and interest arrangement - was this decision cost driven ?

2. You knew that you hadn't effected a repyament vehicle with the adviser selling the mge - what action did you take after this appointment ? Or was cost an issue in your decision not to pch or effect a repayment vehicle such as low cost endowment ?

3. What did you advise the lender, re how you would repay at redemption ?

4. Was it your original intention to sell the property, but now the time is nearing, or due to family circs, you now don't wish to follow this stratergy ?

5. Do you have any point of sale (POS) docs, such as your reason why letter (RWL)/letter of recommendation, copy of your fact find, illustrations, policy docs, etc, etc, etc,

6. Each annual statement (as already touched on by the guys) clearly advised that the mge is IO - why have you left managing this situation to this point in time, when its been obvious from outset what the issues are.

Hope to help

Holly