Endowment maturity problems

vortmp

Problem 1
In July I rang the lender and they said I could continue my interest only mortgage indefinitely as I wanted to take the endowment money.
In November I sought to clarify this and they changed their minds and were insistent on the mortgage being paid in full.

Problem 2
The mortgage is for £55000 but the endowment paid out £45000 instead of £65000. (Fortunately I made some capital repayments to get the balance down from £65000).

I did get £3500 in compensation years ago but that didn't help to repay the £10000 shortfall.
I was sold the endowment on the basis that it would pay the mortgage and give me extra money, which it clearly hasn't done.

Would I get anywhere complaining to the endowment company now?

McKneff

As far as I am aware all this endowment business complaints are time barred now.

kingstreet

The compensation you were paid was designed to put you into the position you would have been in, had you taken a repayment mortgage at the outset.

Unfortunately, this was the final outcome of any complaint you could make and there is no further route for you.

dunstonh

In July I rang the lender and they said I could continue my interest only mortgage indefinitely as I wanted to take the endowment money.
In November I sought to clarify this and they changed their minds and were insistent on the mortgage being paid in full.

What you were told in July is not possible. It would require the mortgage to be changed to equity release. Otherwise, it would still end on the redemption date.

What is likely is that the lender has changed its position in that it didnt need evidence of repayment vehicle earlier in the year but with increased requirements being placed on lenders by the regulator, it is has changed its position (as many have recently).

I did get £3500 in compensation years ago but that didn't help to repay the £10000 shortfall.

It would have done had you switched to repayment mortgage as the redress was paid to allow you to do so.

Would I get anywhere complaining to the endowment company now?

No. Your decision to continue with a risk based option rather than switching to repayment basis when you got the redress payment was yours and no-one elses. Only person you can complain to is yourself

jamesd

vortmp wrote: »

Would I get anywhere complaining to the endowment company now?

No. You already received redress following what was probably a claim that you would use a repayment mortgage if you'd known about the investment risk. Then you didn't switch to repayment so you find yourself in your current position. Endowments in general often assumed that payments would be increased with inflation but lots of people just left their payments at the same level. Many more didn't monitor things and adjust payments in to keep on track.

The question is, what to do about the mortgage now. The mortgage lender will presumably want the endowment money, which is fair enough, after all, that's what it was for. Then there's the shortfall. The mortgage lender is supposed to be understanding in such circumstances and offer options. One might be using a repayment mortgage to clear the balance. If your income will increase later, perhaps because of the state pensions starting, they might go with interest only until then, followed by repayment.

If you are experiencing financial hardship even with those options they might consider other things.

We really don't know enough about your overall situation to know what to suggest, though, other than that you can forget any more redress payments.

vortmp

Thanks for all the replies.

I thought maybe I could rely on the principle of estoppel based on the evidence given in July as the house is let and I renewed a tenancy agreement based on that information, but then the mortgage company have offered to extend the repayments to cover the shortfall which went beyond the end of the tenancy so I can't really complain about that. However, their payments were based on the endowment paying out more than was ever predicted, which I also found annoying.

I shall just pay the shortfall and be done with it.

Dave_the_Ginger_Cat

vortmp wrote: »

Problem 1
In July I rang the lender and they said I could continue my interest only mortgage indefinitely as I wanted to take the endowment money.
In November I sought to clarify this and they changed their minds and were insistent on the mortgage being paid in full.

Some lenders will allow a term extension for a fixed period on maturity. Mine is with TSB ( ex-C&G) and they were happy with a 5 year extension, and for me to pay the endowment proceeds later.

I have mine let, so it's marginally better for tax to do it this way

McKneff

vortmp wrote: »

Thanks for all the replies.

I thought maybe I could rely on the principle of estoppel based on the evidence given in July as the house is let and I renewed a tenancy agreement based on that information, but then the mortgage company have offered to extend the repayments to cover the shortfall which went beyond the end of the tenancy so I can't really complain about that. However, their payments were based on the endowment paying out more than was ever predicted, which I also found annoying.

I shall just pay the shortfall and be done with it.

It would never, ever have been guaranteed. Investments go down as well as up. A prediction is just an educated guess, but a guess nevertheless.