It's getting close.... the great IO mortgage miss-selling scandal

wotsthat

Graham_Devon wrote: »

And another to add to the bandwagon...

Yet, they took out an endowment, to cover the shortfall, even though they didn't understand there would be one.

http://www.thisismoney.co.uk/money/mortgageshome/article-2225427/The-50s-mortgage-trap-Older-owners-face-losing-homes-struggle-meet-repayments.html

Why do people give these interviews they just look like idiots?

I wish someone would mis-sell me something that would increase my net worth by c£200k.

Graham_Devon

wotsthat wrote: »

Why do people give these interviews they just look like idiots?

I wish someone would mis-sell me something that would increase my net worth by c£200k.

This isn't the point, they don't want to leave their home.

Clearly, this isn't going to get too much sympathy, so something else is needed, some kind of personal effect.

Night sweats. That'll do. Panicking and night sweats. Box ticked. It's effecting the persons health. (And yes, that is in the article).

Didn't understand...therefore possibility of miss-selling? Tick. Effecting health? Tick....Cannot afford to buy in their local area if they have to sell, therefore exacerbating health problems? Tick.

ukcarper

Graham_Devon wrote: »

This isn't the point, they don't want to leave their home.

Clearly, this isn't going to get too much sympathy, so something else is needed, some kind of personal effect.

Night sweats. That'll do. Panicking and night sweats. Box ticked. It's effecting the persons health. (And yes, that is in the article).

Didn't understand...therefore possibility of miss-selling? Tick. Effecting health? Tick....Cannot afford to buy in their local area if they have to sell, therefore exacerbating health problems? Tick.

Haven't they taken equity release the obvious ans.

wotsthat

Graham_Devon wrote: »

This isn't the point, they don't want to leave their home.

It's related to the point. To get compensation there needs to be evidence that mis-selling has taken place and some evidence of loss.

It tests credulity to think that a judge, looking at the merits, is going to find in favour of the claimants. Secondly it appears that most people have gained financially so where's the loss?

mystic_trev

Tony and Pam Hughes never dreamed they would fail to pay off their mortgage. But after 30 years of paying interest to the bank and having retired, they were still £40,000 short.

What were they dreaming of? They should have read the Statement they received every year telling them the Capital amount was still outstanding. Instead they parade themselves to the Media showing how stupid some people can be!

Graham_Devon

ukcarper wrote: »

Haven't they taken equity release the obvious ans.

Yes, they have. But they appear to be trying to apportion blame, as they are going down the route of suggesting if someone had advised them differently, they wouldn't be in the situation they are in now (with equity release taking a chunk of their equity every month).

Graham_Devon

Complaints are now starting to arise on this forum in the PPI and Claiming area.

https://forums.moneysavingexpert.com/discussion/4261189

Someone who apparently didn't know they had an interest only mortgage, but only found out when selling 4 years later. Looking for advice on how to take a complaint forward.

And another...
https://forums.moneysavingexpert.com/discussion/4258917

Graham_Devon

And it's on....

The claims companies are starting to make claims....

Claims management companies that have made billions of pounds from PPI are turning their attention to mortgages in what they say is the next big mis-selling scandal.

A number of claims management companies are soon to launch websites and TV advertising campaigns targeting borrowers who think they may have been mis-sold mortgages. Most will initially be aimed at customers with interest-only mortgages, even though lenders and the Financial Ombudsman Service (FOS), which rules on consumer claims against financial companies, say the claims are unlikely to succeed.

Interest-only loans are mortgages where the borrower agrees to pay off the interest each month but none of the capital. Borrowers are expected to ensure they have a repayment vehicle in place to pay off the loan once it expires, usually after 25 years.

"A vast number of people who took out interest-only home loans were not subject to adequate checks on the repayment vehicle they have or should have in place," says Craig Lowther, managing director of Money Boomerang, a claims management company. "Many will now be facing massive debts come the end of their mortgage term. We believe many people were mis-sold mortgages and the total value of claims we could be dealing with will be close to that for PPI."

Will be really interesting to see how this one pans out. Surely the claims companies wouldn't be spending their time doing this if they didn't think there was something in it?!

The websites are starting to appear: http://missoldinterestonly.com/

It seems they are targetting self cert mortgages in the first instance.

They will be going after the brokers in the first instance, rather than the lenders.

Much more in the article...
http://www.guardian.co.uk/money/2012/oct/29/claims-firms-mortgage-mis-selling?newsfeed=true


I'm gonna wish I took an interest only mortgage....aren't I!

Basically, if successful, the borrower with an interest only loan will be able to claim back every single payment made since the start of the loan, plus 8% interest. Potentially MASSIVE sums of cash. The FOS are not stating this isn't possible, it's just saying it's unlikely, and has stated that any miss-selling where the borrower didn't understand would see a redress based on each case.

It really does look like it has legs.

chewmylegoff

They won't be able to claim every single payment plus 8% interest. Financial redress aims to put you in the position you would have been in if you had been sold the appropriate product. It is difficult to see how to do this precisely with an IO mortgage because you would not have been able to afford the house you bought if you had had to take out a repayment mortgage instead. I expect that in reality the most you could claim would be your outstanding mortgage balance.

The claims management companies will be hoping to swamp the banks with so many complaints that they cannot process them in a reasonable time period, leaving the banks in a position whereby they have to just pay all of the claims without looking at them. This worked with PPI but that was largely because of pressure from the regulator, which appears to be absent in respect of IO mortgages.

chewmylegoff

P.s. and I don't think it has legs. The claims management companies are morons and without a high profile judgement against a bank to use as leverage this ain't going anywhere in my view. The banks will just reject and the borrower will find it impossible to evidence to the FOS that they didn't understand they were only paying the interest unless the mortgage documentation was spectacularly deficient.