potential mis selling of northern rock together mortgage

opinions4u

TurnUpForTheBooks wrote: »

So you'd rather deflect the criticism away from the financial services industry and back onto the OP and partner?

Put it this way. The OP / OP's partner has / have made a series of financial decisions that were short-termist.

- Build up presumably significant unsecured debt (without advice)

- Take out the only mortgage product on the market that allowed them to reduce the monthly cost of that unsecured credit and buy a house (with advice)

- Build up new unsecured debt (without advice)

- Cease being a member of one of the best pension schemes there is to raise a few thousand in a way that will cost tens of thousands to fund another house purchase (without advice)

I've bolded two things to highlight the decisions made around house purchase. I want. I must have. I will do whatever it takes and damn the consequences.

The two not highlighted were much the same. I want. I must have. I borrow.

You can argue the first set of unsecured credit should never have been lent. But the payments were maintained. So who did what wrong? Would it have been reasonable to decline the loans?

You can argue that the NR mortgage should never have been advanced. Yet it was affordable and almost certainly the best fit for the customer's needs at the time of application. Until the customer decided they didn't want it anymore. So why should a different mortgage or no mortgage have been provided?

And now we have what is effectively a case of the OP having debt, wanting more debt via a mortgage so getting their partner to wash excellent pension provision down the drain to be able to obtain that additional debt now.

Short termism. I want it. I have to have it. Yes, the banks have been guilty of short termism themselves as they pushed wrecklesly for profit. Governments, best defined by Brown's tax on pension funds, have spent tomorrow's cash today and continue to do so.

But here we have an example of a situation where there is a clear repeating habit that the OP and partner don't appear to have learned from. Debt > More Debt > More Debt > Spend My Retirement Now > Even More Debt.

Once they've wasted the pension money on the deposit, how big an unsecured loan do you think they'll want to kit out the new house? When do you think they'll want the payment holiday?

At some point a lender will say "no". Then the OP will be on here talking about Experian score of 999 and their perfect credit file and how outrageous it is that they can't borrow what they want, when they want, in the way they want.

Because they want. Now. And screw any longer term consequences.

Society has a huge problem. It's far bigger than the financial services industry that is damned if it does and damned if it doesn't in cases like this.

TurnUpForTheBooks_2

opinions4u wrote: »

Society has a huge problem. It's far bigger than the financial services industry that is damned if it does and damned if it doesn't in cases like this.

I guess you got the last part right - the financial services industry is indeed damned.

I just wish it could finally be dead and buried in its current no good form. It has lurched perhaps for nearly 30 years now like some choreographed association of the undead through episodes including but by no means limited to

• the mortgage endowment reneging scandal,
• systematic pensions misselling,
• critical illness contract reneging,
• the wholesale corporate reneging on final salary pension promises, sponsored by the financial services industry who saw opportunity for win win (in greed terms) by advising corporate clients that they had excuses for such immoral behaviour against their ordinary employees (how many top bosses lost out on pension entitlement by closing final salary schemes for the workers ? How many public service final salary schemes survived much longer against the same excuses ?)
• with profits "reattributions" eased by cheap bribes to policyholders who had no idea what they were agreeing to (resulting in blatant stealing of policyholders funds and transfering them to shareholders all wrapped up in the most ridiculous High Court approved gift wrap)
• PPI with everything,
• the general devil may care outsourcing of personal insurance promises to third party first level deniers,
• banks targeting senior cittizens and then steering their cautiously accumulated life savings into risky investments which they called low risk,
• banks offering everyday customers something called 'structured products' (basically the man in the street's Goldman Sachs sovereign wealth funds) - the banks couldn't lose because they'd created markets betting against the same products,
• retail bank package account misselling
• and goodness knows what else...
• goodness me I almost forgot rampant mortgage misselling including the type described in the first and subsequent posts of this thread, followed by the fraudulent securitisation of dodgy mortgages which brought the whole western economy to its knees five years ago ... silly me !

When will people get their money back ?
It reminds me of the three generation wait which some families have had to endure before recently recovering artworks systematically plundered from their parents, grandparents and greatgrandparents.

I don't see the above list of wrongs as anything less significant by way of example of how one group in society will largely without compunction steal systematically from another if given a formal lead to follow and some sort of share in the proceeds is they should follow it. At least in the 1930s/40s case, there was the risk of losing your life if you dared speak out against it.

What has been the excuse throughout the 80s, 90s and 00s ?

Ignorance deserves loss ?

A fool and his money are easily parted - so go for it ?

Business is business ?

dunstonh

the mortgage endowment reneging scandal,

Turned out not to be much of a scandal. Most complaints were rejected. Payouts were on around 25% of cases and most of these were due to records not being maintained rather than being actual mis-sales. The failure with financial services on that one was that it failed to maintain decent records as previously, no-one had ever needed going back to old records. One compliance company showed that on a typical 1000 complaints, 25% would receive redress. However, only 2.5% were due to actual mis-sales. The other 22.5% was down to inadequate records, lost or missing files or documentation.

systematic pensions misselling,

Certainly an issue but not as widespread as coverage suggested and the Govt and regulators were just as much at fault as they all lacked hindsight on used returns and actuarial data that had been achievable in the past decades. They didnt take into account that going forward it wouldnt be the same. The person that set up the pension review has since said that too many people got paid out on this who should not have been.

critical illness contract reneging,

No such thing exists. You made that up.

the wholesale corporate reneging on final salary pension promises

Nothing to do with financial services.

with profits "reattributions" eased by cheap bribes to policyholders

You can count the number of companies that have done this on one hand. People had a choice if they wanted the money or not. Where choice exists, there is no issue.

the general devil may care outsourcing of personal insurance promises to third party first level deniers,

You will need to explain that one in English.

banks targeting senior cittizens and then steering their cautiously accumulated life savings into risky investments which they called low risk,

Banks did have problems with retailing investments and were recognised in the industry but not the regulator.

goodness me I almost forgot rampant mortgage misselling including the type described in the first and subsequent posts of this thread, followed by the fraudulent securitisation of dodgy mortgages which brought the whole western economy to its knees five years ago ... silly me

Yet the number of mortgage complaints is low and the uphold rate on those complaints are low. Sounds very rampant.

No-one denies there have been issues. Where someone has suffered with an issue then things should be put right and are typically put right. There is no point making up issues that don't exist though.

TurnUpForTheBooks_2

Its all in the eye of the beholder, isn't it dunstonh ?

You play down the endowment scandal with misleading statistics. The industry was buying up its own endowment policies at cut-prices on a burgeoning second-hand endowment market which it created after it pushed the promise over a cliff. Where in your statistics are those endowment contracts? I agree with you on the limited number of actual endowment "mis-sales" if by "mis-sale" you are referring to the salesmen themselves. There was of course the usual risk of corruption there due to the enormous sales commissions at source (up to two years premiums I believe), but the biggest part of the endowment scandal was when the boards of the providers involved decided they had the right to renege on the original promises made by their salesmen and then to do all manner of tricks to get their hands on the enormous funds.

Let us not forget that a very large proportion of the endowments that created such enormous with profits funds in the industry were sold with mortgages - the original subject of this thread.

With endowment mortgages it had sold, the industry created the impression that the prevailing investment market (nothing to do with them of course!) meant that low cost endowments would likely fail to pay off the mortgages. Then they swooped not only to buy up endowments that they had forced into a secondhand market due to the ridiculous surrender values they offered panicked policyholders. Shortly afterwards, with their greed fueled by their success at sabotaging their own endowment products, and buying them back at knockdown prices, they came up with their reattribution wheezes to grab a large share of the remaining policyholder assets within those endowment funds which were of course largely with profit endowment funds.

You say there was no reneging on critical illness policies. I saw it happening but you didn't I guess. Not something many of us get involved in is it? (Handling enquiries from persons recently diagnosed with life threatening or indeed terminal illnesses)

You dismiss the broken final salary promises as nothing to do with the financial services industry. What misleading nonsense. The industry was cosying up to all the financial directors (who were usually also trustees of their employees final salary pension scheme) and advising them how to manage the broken promises, wind up the schemes, release "surpluses" into company coffers, and even advising them how they could claim that replacement money purchase schemes were probably a better deal! Don't make me laugh, dunstonh. Financial directors did not all become corrupt due to the company of other FDs they kept. The immorality was spread by the Financial Advisors who cosied up to them and cajoled FDs into driving FS schemes into the buffers before some other sharp upstart suggested it undermining the FDs credibility with their shareholders.

You choose not to engage with my descriptive phrase on the ills of outsourced insurance claims services. Perhaps you are not as familiar with personal insurance claims as with your main specialisms. Doesn't mean the ills didn't happen.

That reminds me - there is the scandal of the banks first failing miserably at and then clumsily outsourcing their deceased customer / executor services. Something else one might expect banks to do well, especially since it isn't very long ago in our memories that banks routinely promoted their will services and their services as executors to large segments of their retail customer base. But when it comes to making good on the promise, it all costs money doesn't it?

Anyway, back to one of the scandals that has directly affected me (I am not so unusual) via no less than two monster providers with the threat of a third (Prudential) at one point before they backed down. You choose to belittle the reattribution scandal based on the handful of monster companies that were involved in it.

What you failed to remind us was the number of household name with profits funds that were gobbled up by monsters like AXA and Aviva. I can think instantly of Sun Life, Equity & Law, Norwich Union, Commercial Union, General Accident.

You have not even agreed that the reattribution trick was a scandal - instead you said it was a choice. Are you serious ? If you are then I am worried for your clients.


Nevertheless, from your position in the industry, I think we on MSE would love to see the extended llist of other financial services scandals of the last two or three decades that you dunstonh can add to my extremely long but too easily compiled list - the one that just rolled off the top of my blessedly ignorant head?

The list that could roll off your supremely knowledgeable head must be a whopper - or will the whopper be the suggestion that there were none you can remember?

JPB123

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. 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.

So, unless you're given the softly softly approach, you don't want comments? Perhaps that has contributed to the state of your finances? From what you've posted, I don't see that the broker has done anything wrong. The chosen product fitted your partner's requirements and circumstances.

Where does the responsibility lie with the broker and the lender? He was given a product that he qualified for and that enabled him to buy a property. Perhaps they should have declined him; you could then come on moaning about him being financially dis-enfranchised. I think people need to accept that the nanny state we're moving to doesn't carry liability for your decisions.

I'm 38, and yes, I do have a young family.

I am an Independent Mortgage Adviser

You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice

TurnUpForTheBooks_2

JPB123 wrote: »

Where does the responsibility lie with the broker and the lender? He was given a product that he qualified for ...

You call it a product? Who designed it ? Who submitted it for proper analysis for public consumption ? Perhaps you are one who believes that unfettered innovation is healthy ?

... and that enabled him to buy a property.

WRONG! That vehicle was flogged to him in such a way that he trusted it would enable him to buy a property. If I read the OP correctly, the property is far from purchased outright just yet!

Perhaps they should have declined him;

Perhaps they should never have sold him the idea that it was easily possible to overstretch / everyone does it now / well we do anyway!

...you could then come on moaning about him being financially dis-enfranchised.

I think you are serious. And you make a living "advising" people financially. Are your goalposts actually still on the field of play or do you barely have to come out of the dressing room to score? Oh dear.

I think people need to accept that the nanny state we're moving to doesn't carry liability for your decisions.

Not sure whether you intended to make the point I drew from that sentence.

I'm 38, and yes, I do have a young family.

Well, 38 is the age of the average first time buyer now, so some might say it is still young. How old were you before your first time buy? Did you get an inside run at it or did your mortgage advising come afterwards?

JPB123

Quote:
Originally Posted by JPB123
Where does the responsibility lie with the broker and the lender? He was given a product that he qualified for ...
You call it a product? Who designed it ? Who submitted it for proper analysis for public consumption ? Perhaps you are one who believes that unfettered innovation is healthy ? Perhaps every company should submit every product to be vetted by the public? If it was no good, it wouldn't have sold.
Quote:
... and that enabled him to buy a property.
WRONG! That vehicle was flogged to him in such a way that he trusted it would enable him to buy a property. (It did.) If I read the OP correctly, the property is far from purchased outright just yet! Unfortunately, the vast majority of us need a mortgage. That takes time to pay off, so no, I don't imagine it's purchase outright.
Quote:
Perhaps they should have declined him;
Perhaps they should never have sold him the idea that it was easily possible to overstretch / everyone does it now / well we do anyway! Perhaps, as an adult, he should take responsibility for his actions. From your tone, it sounds like you'd like to go back to the 70's, everyone living in a council house and doing as they were told. You seem to be painting the OP's partner as if he's either 6 or got special needs.
Quote:
...you could then come on moaning about him being financially dis-enfranchised.
I think you are serious. And you make a living "advising" people financially. Are your goalposts actually still on the field of play or do you barely have to come out of the dressing room to score? Oh dear. I have many happy clients, I have no problem justifying my advice. The majority of my clients come as referrals. Or are they all educationally sub-normal as you seem to be painting anyone who takes a mortgage out?
Quote:
I think people need to accept that the nanny state we're moving to doesn't carry liability for your decisions.
Not sure whether you intended to make the point I drew from that sentence.
Quote:
I'm 38, and yes, I do have a young family.
Well, 38 is the age of the average first time buyer now, so some might say it is still young. How old were you before your first time buy? Did you get an inside run at it or did your mortgage advising come afterwards? I was 24

I aman Independent Mortgage Adviser

You should note that this site doesn't check my status as a MortgageAdviser, so you need to take my word for it. This signature is here as I followMSE's Mortgage Adviser Code of Conduct. Any posts on here are for informationand discussion purposes only and shouldn't be seen as financial advice

saveupthesmiles

dunstonh wrote: »

Statistically, the odds show that is usually the case. IFAs account for 1% of complaints at the FOS. The FOS reject the majority of these. This time last year the FOS commended IFAs on being able to show they know their clients (mainly a dig at the banks who rarely can). Nothing is perfect but perception and reality are different things. Also most IFAs dont do mortgages.



I know. Good isnt it that people are willing to give up their time to point out what a silly move that would be.



Police have a final salary scheme.

Actually I'll think you'll find the final salary part is being phased out in 2015 as per the rest of the civil service so not the gold plated pension everyone thinks it is.

I agree with you about perception and reality - my quote was 'ALL IFA's' - not everyone can be as good as you make out. Hey, I've experience of it so mine isn't a perception.

On that note, kind of you to give up your time but when it's to lord it over us inexperienced unknowledgeables like we're complete morons for not realising that the banks (or in my case my IFA) were rubbing their hands gleefully at luring us into a product we didn't actually need then it's not so helpful. Some people (the same way that some IFA's are helpful) did their best and sought what they thought was secure advice from the right people who turned out to be the wrong people. Your experience has helped you avoid these pitfalls but have some compassion for those who don't realise what they should know because they haven't had the training you've had.

Why not help the OP rather than scoff at her situation and her potential decisions.

dunstonh

Actually I'll think you'll find the final salary part is being phased out in 2015 as per the rest of the civil service so not the gold plated pension everyone thinks it is.

Actually, I think you will find it is not. It is to remain a defined benefit scheme.

I agree with you about perception and reality - my quote was 'ALL IFA's' - not everyone can be as good as you make out. Hey, I've experience of it so mine isn't a perception.

You have experience of over 25,000 advisers doing millions of transactions a year but only responsible for 714 complaints at the FOS during the first half of 2013?

i said that perfection cannot be claimed but the figures do not back your perception.

Some people (the same way that some IFA's are helpful) did their best and sought what they thought was secure advice from the right people who turned out to be the wrong people. Your experience has helped you avoid these pitfalls but have some compassion for those who don't realise what they should know because they haven't had the training you've had.

There is no point wrapping people up in cotton wool and saying things that are not correct just to make them feel better.

Why not help the OP rather than scoff at her situation and her potential decisions.

Please dont make false allegations against me. I do not wish to report your post for abuse. I have helped, as have others. It just isnt necessarily what the OP wanted to hear but it is perhaps what the OP needed to hear.

saveupthesmiles

dunstonh wrote: »

Actually, I think you will find it is not. It is to remain a defined benefit scheme.



You have experience of over 25,000 advisers doing millions of transactions a year but only responsible for 714 complaints at the FOS during the first half of 2013?

i said that perfection cannot be claimed but the figures do not back your perception.



There is no point wrapping people up in cotton wool and saying things that are not correct just to make them feel better.



Please dont make false allegations against me. I do not wish to report your post for abuse. I have helped, as have others. It just isnt necessarily what the OP wanted to hear but it is perhaps what the OP needed to hear.

Oh i see, so a final salary is the same as a defined contibution, and it's still better than private?

ALL the IFA's I've experienced have missold therefore I must be really unlucky then to have experienced 2 out of the 714 who have been complained about.

Noone said wrap people up in cotton wool, however I was making a point that the delivery of your message is rotten. If i have a choice of receiving the same message from two people and one of them delivers it better I'll pick them thanks; surely you must realise that?

Report me all you like - I didn't make any alleagtions and it's my opinion which I;m entitled to. Get a grip on yourself.