potential mis selling of northern rock together mortgage

mrayner88

Hi just looking for advice!

Leon_W

In what particular way do you think the mortgage was mis sold ?


I read through your post a couple of times and can't see anything wrong.

Let_Us_See

Caveat emptor. Whilst I have every sympathy for your situation I can't see any reason for a potential mis-selling claim.

Put it another way. If house prices had continued to rise and he was now sitting on a pile of equity would you still consider a mis-selling claim?

dunstonh

I am told that the broker recommended northern rock together mortgage as my partner had no deposit and also to consolidate his existing bank loan. He took a mortgage out of £115,000 and loan of £20,000.

Northern Rock was a lender that focused on that sort of arrangement. So, that sounds about right.

We have received some money back from NRAM by way of redress for the loan paperwork not being sent out with the correct details but was wondering if there is anything we can do.

A nice lucky payout due to loophole there. Bet you were pleased with that.

potential mis selling of northern rock together mortgage

Not seeing any mis-sale in what you have said. What is it do you think was wrong?

holly_hobby

Well it was sold post mortgage regulation, so we do need to look at the basis of lender and loan recommendation.

You don't have to leave the unsecured element with NRAM when you leave them - you may also pay that off when you redeem the main mge, but if you choose not to, yes it will move from mortgage rates, to personal loan rates (as its no longer linked to your mge) - and that will all be within the mge t&cs, and always been the case with the together mge.

Your partner had no mortgage deposit, and a high interest bank loan, and due to budgetary constraints, it was advised that he could effect a 100+ mge (with N Rock), which would take essentially take the form of a personal loan but the benefit being its charged at the same interest rate as the mge .... and not traditional personal loan rates.

Now, an issue is that the term of the unsecured element is allowed to run alongside your main mge for its entire term - so in effect it could (if you didn't proactively pay it off) run for many yrs longer than the original term of the car loan (which has a max term of 5 yrs) - and although the interest rate is much lower, over an extended term it will effectively cost much more than if he had retained the car loan for its remaining term.

BUT if your partners directive to the adviser was to reduce his outgoings ie he had budetary constraints (which we know he did) - then this wouldn't be a mis-sale (as his immediate ogoings were reduced), but I would expect the adviser to discuss the potential extra overall cost with the individual, and that if they take it for an extended period, it would incur an overall higher costing ..... but again many peeps are happy to accept this at outset just to get their outgoings down.

You say the difference between repayment and Interest Only (IO) was not discussed with him - although IO is typically cheaper than repayment, and given we have budget issues, that would generally fit with an IO recommendation.

He was also in a new position with the police force, which suggests that over the coming immediate yrs his income would increase with his role, permitting him to repay the unsecured element at an earlier juncture ..... and remortgage .. although this WOULD be subject to status.

What does his suitability/reason why letter state with regards the advisers recommendations and reason for selecting ...
A) The NR Together mge
Interest Only over repayment
C) Did he pch an endowment to support his IO mortgage ?.

Hope this helps

Holly x

mrayner88

thank you everyone for your replies.

I know no one forced him to take the mortgage out i just feel he had been let down in the advice given. I have had my own mortgage and is settled and i dont feel many people realize the effect that together mortgages have had on peoples lives and is maybe not a fault of the brokers but northern rock themselves for offering this product.

I personally think interest only mortgages should not be sold at all but thats not a reason to think the mortgage has been mis sold.

It wasnt explained to my knowledge that the unsecured loan would be increased to personal loan rates if he re mortgaged or moved house. I understand the option is there to take out a loan with another provider in order for this to be paid off with NRAM but this is not something we can do at the minute financially as i have a large personal loan.

Since I have found this out we have now switched to remortgage and my partner has come out of his pension at work in order for us to save money towards the loan and deposit for a another house.

I dont know an endowment was pitched and i am unsure as to whether interest overpayments were discussed.

I think its just a case and getting on with it now and trying to pay some of the capital off and repay the loan. I think my partner would have gone for the option that getting one loan to pay his existing bank loan and help towards the deposit would be cheaper initially so he went with that option but didnt realize the consequences!

Thankyou

dunstonh

i dont feel many people realize the effect that together mortgages have had on peoples lives and is maybe not a fault of the brokers but northern rock themselves for offering this product.

How about personal responsibility? Your partner went into this with his eyes open. He was given figures. He knew how much he was borrowing. NR were silly enough to lend it but they only did what he asked for.

I do sympathise with the situation you are in but to try and blame others is pushing it. The property !!!!!! era of the late 90s and early to mid 2000s is largely to blame. It turned property from a serious purchase where you sought both financial advice and legal advice and lenders would scrutinise things heavily into a purchase that was treated with the same seriousness as if you were buying an ipad. Both at lender and consumer level. People stopped getting legal advice to save a few pounds and lenders stopped scrutinising applications as much as they just wanted to lend and lend. We look back with hindsight and see it was silly but its not something that you can claim mis-sale on.

Since I have found this out we have now switched to remortgage and my partner has come out of his pension at work in order for us to save money towards the loan and deposit for a another house.

Coming out of an occupational pension could be a really really bad move. You could be compounding one bad decision after another.

I dont know an endowment was pitched and i am unsure as to whether interest overpayments were discussed.

Endowments havent been retailed since 2003. So, an endowment would not have been "pitched".

TurnUpForTheBooks_2

Here we go again. Those whose living depends on the shady world of financial services who even now are trying to tell punters that as customers they always possessed eyes if only they had used them which are of course fitted with X ray upgraded perspicuity (including of course total world economic foresight of all the knock on effects of financial markets' weaknesses and foibles), plus they are still trying to assert that big bad banks did lots of stuff right which somehow we are supposed to take as meaning "on balance they were good citizens" and "they are even better now". What poppycock.

No they did not do lots of stuff right. They almost totally dropped everything in traditional banking standards that did not make them a quick buck. That meant they did everything wrong because no-one is entitled to be entrusted with your money and make a quick buck unless they make you more than they agree they will earn themselves.

Banks caused their customer base to trust them when they sold disgraceful products like the one sold to the OP.

The financial services peeps contributing to this thread still work in that wholly discredited industry.

The fact is that Northern Rock in particular has been responsible for enormous suffering of young people sold that type of mortgage. Many have had to go bankrupt because the remnants of Northern Rock chased them down for the negative equity amounts that were realised when the customers were soon unable to service the loans.

No-one has yet shown a decent way forward for all those sold this type of Northern Rock mortgage to get proper restitution for this enormous mis-selling episode that was brushed under the carpet.

It was brushed under the carpet because politicians were like rabbits caught in headlights when Northern Rock was the first high street bank to fail. They messed around with a solution, any solution, and the result was that the distressed mortgage customers were just treated like lepers.

So trying to blame others is not pushing it at all, dunstonh. And it is especially rich I think for you to now be blaming some abstract "property !!!!!!" market as if it was nothing to do with your industry.

The predicament the OP and thousands of others find themseleves in is totally about what others have done in pursuit of loan sales targets and commissions and up the tree, in whatever dishonest ways they infamously used to feather their nests as "players" in the banking game. It is also about how politicians and players in the financial services have reacted to the outing of Northern Rock, and have thus far failed to rectify the appalling misselling activity. Northern Rock would not have had any significant business had they been selling a less adventurous product (I say adventurous with my tongue in cheek). They were known for little else. They created billions of throughput of loan money and took credit for the throughput only and cared nothing for the volatility of the stuff they were selling. They might just as well have been selling concentrated nitric acid as household cleaner with no ingredients label and in cheap easily breakable bottles - they would have caused no less havoc in thousands of households by now.

So let's back up a bit and re-balance the books a little bit on interpretations of 'What happened' and 'Where are we now?' shall we ? This should especially be so on the unfinished business of the Northern Rock Scandal.

Financial Services Industry 2013 = Same Mire It Was In 2007
the only difference is a different mix of muck designed to enable those in the industry to have surfed and metamorphosed relatively unscathed through the troubled waters of the past five years (or six for Northern Rock).

So let's hear it for the customers please. What about the customers ? None of this mealy-mouthed caveat emptor rubbish please. What have the customers been provided with in order to stay afloat other than carte blanch PPI refunds as a sop ? Cleaned up banks and lenders ? A funny ammonia smell still lingers over the entire industry. No-one likes cleaning toilets but if pressed, some will squirt a few more chemicals around and tick the sheet on the wall.

Just don't bother pointing to it. It may be some time before Brits learn how to run clean toilets let alone clean businesses. The Australian sponsored ones in Westfield are about as good as it gets perhaps.

I mean, no matter how big your local bank branch is, what are the chances of taking an urgent pee there, in your friendly human bank? Still pretty much zero I think in the UK. Not a priority. Even if you manage to blag the use of a staff toilet, it will often be as you would expect. The one round the back of the petrol station might be a better bet.

We live in hope for some improvement of the general standard, but I think it will mean a complete change of personnel. We certainly don't take the word of those still in it that it was a limited failure, was only the parts already identified, is better now and so run along OP.

Northern Rock are as responsible for your second bad decision as your first. Your first was in trusting the financial services industry to keep you safe from adversity in the financial markets. You became their plaything the moment you signed up.

Your second bad decision was wholly understandable because no-one has yet shown you how to beat a path to Northern Rock's door for proper restitution. In fact, the whole industry hides from it as you can see in this thread so far.

VFR-Rider

Completely OT (apologies OP), but I'm not totally sure if TUFTB's is trolling or not... I'm going to vote yes...

dunstonh

The financial services peeps contributing to this thread still work in that wholly discredited industry.

Three financial services employed individuals have responded and only one of those works in mortgages.

So trying to blame others is not pushing it at all, dunstonh. And it is especially rich I think for you to now be blaming some abstract "property !!!!!!" market as if it was nothing to do with your industry.

I dont work with mortgages. So, please stick to facts. You also clearly missed the property boom and the associated media coverage that encouraged property purchase.

Financial Services Industry 2013 = Same Mire It Was In 2007

You havent heard of the MMR then I take it. And this blame all for the issues of some attitude of yours shows a complete lack of understanding and knowledge.

TurnUpForTheBooks_2

dunstonh wrote: »

Three financial services employed individuals have responded and only one of those works in mortgages.

Mortgages are what caused the biggest collapse in the entire western world's banking. Do you think those responsible for touting the mortgage throughput as something else entirely, and not forgetting their ostensibly more traditional retail servicing divisions, are immune?

I dont work with mortgages. So, please stick to facts.

Are you immune too? All the investments you ever sold were never affected by mortgage-backed securities nor market manipulations of anything e.g. LIBOR? Are you squeaky clean like the Co-op used to have us believe?

You also clearly missed the property boom and the associated media coverage that encouraged property purchase.

What? So its the faceless media to blame now is it? They publish the !!!!!! you were talking about? Forgive me, dunstonh, but I always thought it was the full colour antics of the players that was the attraction to customers?

Can I just get this right? You are saying that it was the media industry that persuaded the financial services industry that there was a significant public appetite if they were to do naughty things in public that could be sold for the benefit of both industries ? Financial services companies are like 'model-agencies' perhaps? They provide work for professionals who get their kit off ? Hadn't really thought of it that way before, but you may have something there :rotfl:

You havent heard of the MMR then I take it.

Oh was that the one shot vaccination that made the whole mortgage market immune going forward? I admit I did not get excited when I heard it.

And this blame all for the issues of some attitude of yours shows a complete lack of understanding and knowledge.

Hmm ... there we have a fundamental difference of opinion. Go back to my assertion that banks stopped doing anything which failed to make them a quick buck. The assertion is good for the whole financial services industry.

Tell us what causes you to believe otherwise, dunstonh? What things are done by financial services industry members today out of a sense of duty as good citizens? Show us why those things outweigh the bad things so that on balance you feel comfortable arguing that the financial services industry is a force for good.

I honestly don't get it. It isn't my attitude that gets in the way, its just the empty desert I always seem to find now which is the parking lot for all the good things that ever came out of the industry. If I am looking in the wrong place, then whose fault is that ?

Has the party been moved ? Why ? My needs are not great. I don't need to get rich quick, and I am not alone in that. Are the likes of me and the OP therefore to be seen as fair game for others to get rich quick at our expense ?

Many times I have seen you use these forums to suggest that undemanding punters only have themselves to blame when they fail to inform themselves or to react to something that demanding punters would see as 'obvious' and would use to avoid loss or to load the dice in their favour for quick gains.

That is not how ordinary people conduct their lives. Ordinary people are kinder to each other and look out for one another and are happy with simply making ends meet.

Why should I no longer be entitled to assume that my bank is looking out for me ? Because there is no longer a face I can correctly refer to as a bank manager perhaps ? Good citizens need not apply for jobs in financial services. Blaggers may apply. Target smashers may apply. See no evil, hear no evil plodders with heads down may even apply for some jobs.

Why are we still being urged that if we buy fiduciary relationship products we are best advised to have first become fully streetwise like some inner city kids before we go out? Why caveat emptor ? When is a fiduciary relationship just a figment of a punters imagination?

Why are financial services contracts not conducted in good faith (which actually means something actionable in some countries if it is found to be bad)? Why so little discussion of fiduciary duty when it comes to both loans like the OPs and investment products which I believe you prefer as your forte now ?