Mortgage indemnity guarantee

johnoflynn

We had to pay one of these back in 1989 and I still have the paperwork - are they considered fair and is there any recourse e.g. Miss selling of PPI type approach? We were told is was a requirement or we couldn't have the mortgage as first time buyers

roonaldo

Nothing like PPI nor treated the same.

If you didnt want to pay it, your options were to put down a bigger deposit or go elsewhere. It was a insurance to protect the lender on high loan to value mortgages.

Your complaint would also be time barred.

dunstonh

are they considered fair

yes.

e.g. Miss selling of PPI type approach?

No. You had to pay the MIG. End of story.

We were told is was a requirement or we couldn't have the mortgage as first time buyers

Which is correct. Well, almost. You had to pay the MIG as you didnt have sufficient deposit.

magpiecottage

The lender was doing you a favour by lending you more than it normally would but it was only prepared to do so if the additional risk could be insured (because it might not get all its money back from the forced sale of your home).

If somebody does you a favour it is only fair that you meet their costs in doing so.

johnoflynn

Thanks for the response which is as expected but have been meaning to ask for ages....
All the best

NitroBN

There should more consideration given to the legitimacy of MGI/MIG fees applied to a mortgage than the answers provided so far in this thread as in reality there should be no need for them to exist ever.

The reasons they exists is it gives mortgage providers license to lend beyond the bounds of responsible lending which causes over property valuations leading to a higher risk of negative equity. They benefit no one, if you default most likely due to poor financial advice you will still lose your home and all the costs involved in the acquisition, you will still be blacklisted on many credit reference agencies whilst the bank loses nothing even if it has in retrospect committed reverse mortgage fraud to gain additional business.

First was it obligatory, if so why, should bring to question the soundness of the financial advice of your mortgage adviser.

Time barring would not occur until statute time beyond the discovery you had been sold something that should not have been necessary or were forced to accept additional charges for additional services but not given the opportunity to shop around for an alternative supplier of a required product.

In short if you are being charged an MGI fee can you really afford that home. The real answer is either no you cannot or your being stiffed for an additional fee that has no real legitimate requirement.

The majority would accept the fee thinking there is nothing initially nothing wrong whilst being blinded by the prospect not accepting the terms will mean they cannot own the home they have set their heart on.

If your being given poor financial advice nobody is doing you a favour, if you have been force sold something that was completely unnecessary you have not been done any favours.

Banks lending you money is not a favour, it is business for which they already profit from greatly, whilst doing anything they can to protect themselves from loss, even if that protection was acquired unlawfully.

I look forward to hearing of successful test cases in the near future on the MGI/MIG issue.

antrobus

NitroBN wrote: »

....I look forward to hearing of successful test cases in the near future on the MGI/MIG issue.

Be prepared for a long wait.

P.S. Otherwise this post is nonsense and can safely be ignored.

dunstonh

There should more consideration given to the legitimacy of MGI/MIG fees applied to a mortgage than the answers provided so far in this thread as in reality there should be no need for them to exist ever.

They havent really existed for the last 15 years. Very few lenders have them although there was talk that they may return.

Time barring would not occur until statute time beyond the discovery you had been sold something that should not have been necessary or were forced to accept additional charges for additional services but not given the opportunity to shop around for an alternative supplier of a required product.

Seeing as hardly any lenders have charged one in the last 15 years, it would be statute barred.

Also, they were necessary. There was no choice other than to pay it or increase your deposit. You couldn't shop around for it and there is and never has been any requirement for that.

I look forward to hearing of successful test cases in the near future on the MGI/MIG issue.

Not going to happen.

magpiecottage

antrobus wrote: »

Be prepared for a long wait.

P.S. Otherwise this post is nonsense and can safely be ignored.

I agree.

As DunstonH says, they have not existed for many years - before statutory regulation of mortgage advice.

The policies were also sold to the lender, not the borrower. The lender simply made the borrower pay the premium as a condition of the loan.

In theory the borrower could take the lender to FOS but the lender would be able to argue that it was an exercise of legitimate commercial judgement and therefore outside FOS jurisdiction.

I think NitroBN has been on the old Nitrous Oxide.

roonaldo

NitroBN wrote: »

Time barring would not occur until statute time beyond the discovery you had been sold something that should not have been necessary or were forced to accept additional charges for additional services but not given the opportunity to shop around for an alternative supplier of a required product.

You talk nonsense. No one forced them and they were a condition of lending, so if you dont like it take a hike basically.. Shop around? its not a policy for the customer but the lender. You mean the bank should shop around for lower risk customers more like.

They could easily be time barred. The point of your knowledge was the time of the sale which is going to be more than 6 years ago. You dont just realise 10 years after you had a mortgage that you got a MIG on the mortgage.

If you dont want to pay it put down a bigger deposit.

NitroBN

As a consumer who may have been bitten by such a charge in the early 90's and still paying for this charge today and as such may have reasonable arguments against their fairness and representation at the time of sale. Therefore I think this qualifies me to raise several questions surrounding them and their ongoing expenses and the ones smoking nitrous oxide are the ones not prepared to question such fees or defending them without being in possession of the full facts.

Before I go further with this

Why did MGI/MIG fees suddenly cease to exist ?

Also out of interest exactly what percentage deposit do you believe one should possess before becoming a safe and viable purchaser as a first time buyer of an average family home, bearing in mind the responsibility of your advice for safeguarding the risk of negative equity and financial loss is equal to both the lender and the borrower ?