potential mis selling of northern rock together mortgage

TurnUpForTheBooks_2

JPB123 wrote: »

Why is it always mis-sold? Never mis-bought?

It is a question of perspective. Yours will be skewed because you make your living in financial services. Ask yourself why that's a good idea before you question why customers should feel so aggrieved as a general case.

I worked in financial services for some decades. I watched it rot from the inside out. Anyone still in it will be atune with the sort of culture that is simply not acceptable. Not your fault directly nor theirs, but denying the obvious doesn't help anyone.

Culture is very difficult to change once it has deteriorated past a certain point. So many of us depend on it one way or another, What will have to suffice as my pension arrangements is part of it. No doubt a proportion of my original peers will have stuck it out to the last and can look forward to large pots compared to the norm.

In the UK, the financial services industry has become a monster which successive governments have claimed is the country's wealth engine. The financial services industry rewards its loyal staff well, but where did the money come from ? Is it created wealth ? I don't think much about it has been created since the 1980s. Most of it is just redistributed.

And John1993, ignoring views like mine is not a virtue. If the year in your username is any indication of your age then you simply have not lived long enough to see what happened. If by adding nothing, you mean I add no inertia to keeping the big UK Financial Services flywheel spinning at full speed ahead, then you are spot on. Without proper consideration of the devastation it has left in its wake, then it might just as well be stopped dead and people in it can just as well go back to proper jobs making things that serve people well instead of pandering to and lauding greed and calling that "business".

Thrugelmir

TurnUpForTheBooks wrote: »

Culture is very difficult to change once it has deteriorated past a certain point.

Culture changes with the times. Banks may be the public face. However business on a far wider scale has changed in the same time frame. Likewise debt from a public perception is a good thing. Inflation magically makes it disappear. Though we've reached the point where the rabbit cannot be pulled out of the hat.

Myself I believe in cycles. After the bad will come good. As people will start the long process of restoring a credible culture.

mrayner88

JPB23

what is the point of your post? if you don't have something nice to say don't say anything at all. my post said is there anything I can do? As mentioned the mortgage was taken out by my partner and I know lending was a lot more relaxed back then you are obviously not young with a young family trying to get out a mortgage with Northern rock are u? I accept he has to take some responsibility for his actions also said he wasn't forced to sign the papers but also responsibility lies with brokers and lenders!

with regard to people's questions on the pension yes he has come out of but only until 2015 when the new pension scheme starts. there is no issue with him going back in and yes he will be down on the final figures but with hopefully promotion in the next years and the fact that we would like to be in family house and settled while we are young this is more of a family priority for quality of living now. n
yes I have a car loan which has three years left so would look at paying the nram loan off with a separate provider and then go back into the pension scheme.

Vectis

mrayner88 wrote: »

JPB23

what is the point of your post? if you don't have something nice to say don't say anything at all. ........

So you only want 'nice' comments? Nothing critical? Perhaps the 'mis-buying' statement is quite relevant - people should perhaps be more aware of what they are signing up to and read the agreements rather than simply sign and claim mis-selling years later.

opinions4u

with regard to people's questions on the pension yes he has come out of but only until 2015 when the new pension scheme starts

Either way, it's an awful decision.

mrayner88

I'm sorry yes maybe the wrong phrase to use. constructive criticism is fine don't appreciate I am unsympathetic .... not asking for sympathy just asking if this is grounds for mis selling or if there is anything I can. as explained it's not my mortgage so I don't know the full details of together mortgages. also been advised that the advisor told my partner that he was £3,000 over the lending value ratios and this was added to the £20,000 loan so was given the maximum mortgage possible and more added to loan to even purchase the property. a costly mistake and yes in hindsight shouldn't have taken out the mortgage like he did. hindsight a great thing!

dunstonh

with regard to people's questions on the pension yes he has come out of but only until 2015 when the new pension scheme starts.

Really bad move. Total waste of money. He saves very little as he wont get the contribution on the payslip. That is taken before tax. So, he will only get 60-80% of that. Plus, he will now pay more NI.

2-3 years out of the police scheme is probably worth around £1500 a year pension income plus close to £10k lump sum in todays terms. So, the loss will equate to figures around £35k to £50k. (it will likely be more than that but stating it in todays terms.

hindsight a great thing!

It is. However, most decades have negative periods for house prices and periods of high interest rates. A typical 25 year mortgage will usually see two-three recessions, two-three periods of high interest rates and two to four recessions. You know they are likely to come at some point. You just dont know when.

opinions4u

mrayner88 wrote: »

A costly mistake and yes in hindsight shouldn't have taken out the mortgage like he did. hindsight a great thing!

What would it take to convince you that you don't need hindsight to correct a whopper of a mistake you're now party to on the police pension?

Massive error.

holly_hobby

mrayner88 wrote: »

I'm sorry yes maybe the wrong phrase to use. constructive criticism is fine don't appreciate I am unsympathetic .... not asking for sympathy just asking if this is grounds for mis selling or if there is anything I can.

I do really appreciate your concern, and whilst we do need to deal with the facts (ie the info you're providing in this thread), that doesn't mean I don't feel for your situation, because I do

Fundamentally the current issues at hand with all these type of arrangements, are as a direct result of the housing market not remaining as bouyant as it was .... as essentially whilst setting out with say a 125% ltv (meaning that the indvidiual benefited from not being reqd to provide/save any deposit themselves & able to borrow extra all at the same mge rate), the individual also effected this in the hope/anticipation that the LTV would reduce overtime in line with the continued increase to market value of the property (but we appreciate that no one can gte this, not a savvy property developer, mortgage broker, estate agent, or even sadly a clarivoyant).

Unfortuantely however we then had the finanical market issues we know about, which instead stagnated the market (whilst in some areas it contracted), and now with tighter lending criteria, demand and prices have been further strangled.

Now this of course unfortunate for anyone, but absolutely catastrophic for anyone with a 100%+ mge (of which to be fair although NR were the first lender to launch this type of product 2000/1, by the mid 00's there were several lenders all marketing a similar model.

It would also be considered under any investigation, that your partner as a policeman, is someone who would be considered to have the capacity to understand and apply rationale to figures, costings, printed t&cs, suitability explanations, and what would happen if markets didn't keep increasing - as oppossed to someone whom may be considered to have a limited capacity to understand. Thats not being unfair, but would be considered as part of any investigation review.

mrayner88 wrote: »

as explained it's not my mortgage so I don't know the full details of together mortgages. also been advised that the advisor told my partner that he was £3,000 over the lending value ratios and this was added to the £20,000 loan so was given the maximum mortgage possible and more added to loan to even purchase the property. a costly mistake and yes in hindsight shouldn't have taken out the mortgage like he did. hindsight a great thing!

I appreciate, you're only repeating what your parter recalls from the sale.

I take the 3k over limit, is referring to the bank/car loan ? If so, I read this that the adviser said whilst the loan remained with the bank, its monthly repayments were throwing your partners affordability out for the main mge application itself. And to get within NRs affordability matrix, it would be best to borrow more under the together element, to redeem the os bank loan.

If so, it would be reasonable to say that this was a clear benefit to him, rather than to say it was a negative or a mis-sale, given that the together element (used to repay the car loan), whilst securing a lower interest rate than the car loan (giving an overall saving IF repaid over the same period as remaining under the car loan), importantly facilitated his actual pch of the property (for which he didn't have a capital deposit or any savings in any event).

As I said way back, I would expect the suitability letter to fully discuss why the together element was effected, and to also point out that if he left the together element to run for the period of the mge (or an extended period), it would result in a higher overall interest costing than if he had left the bank loan running - BUT given that you say he couldn't have secured any mge, unless the bank loan was redemmed, it does suggest that your partner would still have effected the mge and together element regardless.

As I say, his complaint is really as a result of the property market stagnating, rather than as a result of any mis-advice or mis-sale ...... BUT I will add that this is without any info re the point of sale documentation ie what the suitability letter states (which your partner would have been provided with by his adviser, giving the basis and rationale of his recommendations).

Could you dig this out and let us know what it actually says ? (as again this would be reviewed as part of any investigation so it is important).

Hope to help ....

Holly xx

kingstreet

I was talking to a potential client the other day.

Their £186 per month car loan means they are unable to purchase a property as it is not affordable, despite a deposit of over 10%. Despite their rent and loan payments being more than the cost of the mortgage and loan, they are deemed unable to afford the mortgage

If NR Together was still available, I would be able to put the scheme forward for consideration, suggesting a 90% mortgage and an unsecured loan to repay the car loan.

I would explain that this would involve rescheduling short-term credit over a longer period, increasing the amount of interest payable over the term.

I would cover the issue of de-linking, confirming the additional 8% added to the mortgage rate in the vent of the secured element being repaid and the unsecured loan left behind. I'd illustrate the cost of doing so.

As I do in every case, I would discuss the impact of changes in circumstances, such as job loss, house price reduction and unexpected addition to the family.

The solicitor I usually recommend also fully explained the unsecured loan at the point the client was signing the mortgage deed and loan agreement? How do I know this? I had a Together product between 2000 and 2003, so I guinea pigged it on myself when it was launched.

Together, like self-cert, was abused by brokers and borrowers alike. They were useful tools for planning as long as they were properly used.