Shared Appreciation Mortgages (SAM) Bank of Scotland

sharpaman123

These awful, unfair financial instruments were sold by Bank of Scotland and Barclays in the late 90s as an equity release product.
My dad took one out, and as my parents have both just died, we are now selling the house and redeeming the mortgage.
The turkeys are now coming home to roost:
Dad borrowed £75K on a house worth £310K. As well as repaying the principle, I am now looking at paying BOS 75% of the appreciation, which comes to a staggering figure of c. £870K.

Does anyone have experience of trying to seek any form of redress or contribution from BoS? I am thinking about asking them to at least pay the solicitor's conveyancing costs and the estate agents fee - or at least 75% of these fees - or am I just whistling in the wind?

My dad was part of the unsuccessful class action against BoS, which ended in a gagging order to the press. Not sure if this applies to me as heir?!

Annisele

sharpaman123 wrote: »

My dad was part of the unsuccessful class action against BoS.

I'm afraid that's likely to mean you're unable to seek any redress or compensation from Bank of Scotland. If there's already been legal action and your dad lost, you won't be able to take the same point to court again. The ombudsman service is very unlikely to be prepared to look at something that has already been litigated.

sharpaman123

Many thanks for your response. I wasn't actually thinking of litigation, but something a bit more low key like trying to get them to contribute to the costs of selling the house.
But I know I'm on a sticky wicket!
All the best
S

opinions4u

They were sold on a "take independent financial and legal advice" basis.

The lender will have shared the downside risks of property value falling as well as rising.

Parents benefitted in other ways from the deal.

While you can always ask I really don't see that a case exists.

How_to

My mother had such a mortgage and at 83 required a further mortgage of £20,000 just to downsize! But I am also beneficiary and executrix in another relative's estate where the property is subject to one of these loans. That such loans were taken on it is not my place to question and the court's have taken that attitude.

However, my query is in respect of the manner in which BOS deal with redemption of the mortgage which seems to be quite unreasonable. A valuer has to be selected from the bank's panel, likewise any valuer instructed in respect of an appeal valuation. The instructions are made by the bank and, thus far, undisclosed. The bank valuation is Some £100,000 above that of a local estate agent and a local surveyor and £50,000 above a Zoopla or mouse price estimate. I am yet to receive the appeal valuation, despite this having been sent to them two weeks ago.

There is nothing transparent or independent about the process and if the property should sell below the bank valuation, then surely this would mean the bank will have benefitted from unjust enrichment?

Has anyone challenged on such grounds?

holly_hobby

SAMs (which are essentially the prequel to the current lifetime mortgage Home Reversion scheme), were as you say the subject of an unsuccessful class action.

Unless the costings involved or the valuation process were not clearly identified/detailed, in the original contractual docs the mortgagor read and signed, then there is really no where to go.

As the property owner and mortgagor agreed to the said terms, when signing and returning the mortgage offer, and unless this was an advised sale where such items were negated/mis-advised by the adviser, and/or there were signs of cognative imparement imparing the reasoning and judgement of the mortgagor, these are costings to be bourne by their estate .... and are really non-negotiable.

Sorry this isn't what you'll want to hear.

Hope this helps

Holly

TonySoprano

I had an enforceable SAM from around 1993 to 2000 would I be able to register a claim? i.e seek advice if I was mis sold or is this before regulation came into force?


Incidentaly when I came out of the scheme the Halifax made 18000 because they did not clearly explain the scheme to me.


ie: had I known that coming out of the scheme at a point when the value of the house equalled that agreed when the SAM was taken out then I would have nothing further to pay. Instead I continued to the agreement end oblivious to this and in doing so the house valued 18000 more than what was agreed under the scheme. and the Halifax took back all the residue interest to the tune of 18000. Had I sold the house a year or two earlier at 69k then the Halifax would have got zilch


I have never pursued this because I did not think regulation was in force at the point of selling me the SAM

PhilpotChris

Only around 3000 of these SAMs were sold over a very short period in 1997/1998 by Barclays. They were also sold by BOS. These awful products worked to the manifest detriment of all who were unlucky enough to have been sold one. The good news is they can be challenged and I have personally acted for clients who have been successful in challenging them. There are various consumer regulations that can assist consumers unfortunate enough to have been sold a SAM.

snipe2002

Having lost my father in the Summer this year, we realised that he had taken out one of these dreadful products. Having asked for a copy of the contract signed by my parents I note that it was witnessed by an insurance company rep. This is a company my father used regularly for insurance purposes and paid into small savings schemes etc. I do not believe that he understood what he was purchasing as all along he had informed his family that he had sold 25% of the property which we understood we could buy back. It was only after his death, and when I asked for a quotation to buy back the property we realised that Bank of Scotland wanted £140,000 for £17,000 borrowed. My mother who is still alive also thought that the bank owned 25% of the property. I would like to look at challenging this as I believe he had bad advice and was not fully aware of the implications of the SAM. Can you provide me with some contact details/link to discuss this privately.


Thank you

Bobby12345

Hi we recently found out that our parents have one of these ridiculous mortgages . Just wondering if there is anyone out there that can help with this situation. Chris philpot are you still dealing with these clients ? If so , please let us know as would be interested in any help or advice you could give us.
Thank you

Shirenewtondon

Bobby 12345.

I have friend who is in a similar situation. Have you had any joy challenging/

Shirenewtondon