Mis Sold Mortgage

nissan25

Hi
Has anyone been successful in claiming for a mis-sold sub prime mortgage from Preferred Mortgages (Capstone/Acenden)?

A friend of mines mother purchased her home (right to buy) in 2006. Apparently it came about after a leaflet dropped through the door, right to buy etc.

Basically she went to the broker (on leaflet) who completed the necessary documentation and she was provided with a purchase price of £41k (£65k valuation with £24k discount). She mortgaged for £55k to complete home improvements etc.

1) This lady was NOT in employment and was in receipt of benefits, DLA and IS. Broker advised her DLA would cover the payments.
2) She was 58 years of age.
3) The mortgage was interest only!
4) She paid fees of around £750 broker fee, £500 valuation, £850 legal/solicitor, £795 completion fee and £300 documents fee?? direct to broker.
5) It would appear she had no way or was mis-advised of the actual repayment due when the mortgage term expired, She thought after 10 years she would have owned the house as an investment for her family when she passes. All she would have is her state pension and pension credit and this would not cover it.
6) Broker advised to complete forms for DWP to assist with mortgage interest payments - which they did, a small £60.00 per month.

Several years later her son (my friend) discovered this and jointly remortgaged with her with Halifax so the burden has been removed from her.

Obviously now it is all in the public domain about mis selling etc and only for the intervention of her son this lady would be in a terrible situation. Im sure there are many others.

Anyhow I advised him to write to preferred regarding the mis-selling for compensation on behalf of his mum. Unsurprisingly he broker is no longer around and any help / advice from anyone would be much appreciated.

dunstonh

Has anyone been successful in claiming for a mis-sold sub prime mortgage from Preferred Mortgages (Capstone/Acenden)?

Yes.

1) This lady was NOT in employment and was in receipt of benefits, DLA and IS. Broker advised her DLA would cover the payments.
2) She was 58 years of age.
3) The mortgage was interest only!
4) She paid fees of around £750 broker fee, £500 valuation, £850 legal/solicitor, £795 completion fee and £300 documents fee?? direct to broker.
5) It would appear she had no way or was mis-advised of the actual repayment due when the mortgage term expired, She thought after 10 years she would have owned the house as an investment for her family when she passes. All she would have is her state pension and pension credit and this would not cover it.
6) Broker advised to complete forms for DWP to assist with mortgage interest payments - which they did, a small £60.00 per month.

1 - affordability is the main issue. If she can afford it on benefits, then that is not an issue.
2 - When is the repayment date of the mortgage?
3 - not good and a valid reason to complain on post Oct 2004 cases
4 - irrelevant
5 - valid reason to complain
6 - not an issue.

Anyhow I advised him to write to preferred regarding the mis-selling for compensation on behalf of his mum. Unsurprisingly he broker is no longer around and any help / advice from anyone would be much appreciated.

These types of complaints are complicated. If successful, the mortgage doesnt get written off necessarily. Part of it may be but the profit she has made has to be taken into account as well. As this complaint would be handled by the FSCS, at least it will be viewed fairly.

GMS

Did the application declare the benefits as income or was it a self cert mortgage?

DaveTheMus

Let me get this right.....

Someone buys an £65'000 asset owned by the taxpayer with a £24'000 discount, she borrows an extra £14'000 so she can decorate the property and no doubt have a bit of a jolly. The money she uses to pay for this is also funded by the taxpayer.....and now she should be paid compensation?

There is one party that should be paid compensation, the party that has basically gifted a property to someone for 2/3 the market value then paid for that privilege as well.....the taxpayer

maninthestreet

DaveTheMus wrote: »

Let me get this right.....

Someone buys an £65'000 asset owned by the taxpayer with a £24'000 discount, she borrows an extra £14'000 so she can decorate the property and no doubt have a bit of a jolly. The money she uses to pay for this is also funded by the taxpayer.....and now she should be paid compensation?

There is one party that should be paid compensation, the party that has basically gifted a property to someone for 2/3 the market value then paid for that privilege as well.....the taxpayer

Agreed - if compensation is awarded, the taxpayer should be first in-line to receive at least the £24,000 discount.

nissan25

dunstonh wrote: »

Yes.



1 - affordability is the main issue. If she can afford it on benefits, then that is not an issue.
2 - When is the repayment date of the mortgage?
3 - not good and a valid reason to complain on post Oct 2004 cases
4 - irrelevant
5 - valid reason to complain
6 - not an issue.



These types of complaints are complicated. If successful, the mortgage doesnt get written off necessarily. Part of it may be but the profit she has made has to be taken into account as well. As this complaint would be handled by the FSCS, at least it will be viewed fairly.

Thank you for your helpful reply

nissan25

DaveTheMus wrote: »

Let me get this right.....

Someone buys an £65'000 asset owned by the taxpayer with a £24'000 discount, she borrows an extra £14'000 so she can decorate the property and no doubt have a bit of a jolly. The money she uses to pay for this is also funded by the taxpayer.....and now she should be paid compensation?

There is one party that should be paid compensation, the party that has basically gifted a property to someone for 2/3 the market value then paid for that privilege as well.....the taxpayer

Firstly - the extra money was for essential repairs and maintenance - not a "jolly". The discount under right to buy applies to all tenants and is based on number of years tenancy (when she raised her family and paid full rent). Yes her income is benefits due to illness and she is entitled to every penny, haven't paid in for most of her working life and losing her work pension due to greedy investors. How dare you make such derogatory remarks - if you have no helpful / positive reply say nothing.

This lady was misadvised on the purchase of the property - believing she would own it after she paid her 12 years monthly mortgage payments. For your information the £24k discount is disregarded after 5 years purchase and she as well as every other right to buy tenant is entitled to (not gifted) based on years tenancy.

nissan25

GMS wrote: »

Did the application declare the benefits as income or was it a self cert mortgage?

As far as we can establish - broker no longer around, her DLA benefit was declared and she has told us the broker charged her a fee for getting employment docs?! We cannot understand what this was for because she had been out of work due to health 10 years prior! Would they have self-cert'd her? If this is the case it would be fraud.

I will tell her son to maybe contact Preferred and obtain her mortage application docs under data protection.

DaveTheMus

nissan25 wrote: »

she has told us the broker charged her a fee for getting employment docs?! We cannot understand what this was for because she had been out of work due to health 10 years prior!

Sounds like she was knowingly complicit in fraudulent activities........remember, ignorance is no defence.

dunstonh

nissan25 wrote: »

As far as we can establish - broker no longer around, her DLA benefit was declared and she has told us the broker charged her a fee for getting employment docs?! We cannot understand what this was for because she had been out of work due to health 10 years prior! Would they have self-cert'd her? If this is the case it would be fraud.

I will tell her son to maybe contact Preferred and obtain her mortage application docs under data protection.

One of the reasons there havent been many mortgage complaints (in the scheme of things) is that you have to be careful that you dont put your foot in it. It takes two to tango and from what you say, she knowingly committed mortgage fraud (strong words but that is what it is) and whilst she may have been mis-sold, she may come out of this blacklisted for credit in future (which can impact on simple things like car &household insurance or mobile phone contracts potentially and not just larger debts). It is possible that the lender may decide it is the victim of fraud that was not only by the broker but the borrower. So, many people just keep quiet about it rather than stir up a hornets nest.

A careful consideration to whether her and her dependents are going to be better off under this may be worth taking a look at. Yes, it shouldnt have happened but with the discount given by the local authority, could it all work out for the better in the end? If the broker is no longer trading around then they are not going to suffer in a complaint. So, there is no revenge angle. It would purely be a monetary thing.

Kittywun

The simple answer is no. Your complaint would be against the broker who sold you the mortgage not Preferred/SPML/Acenden.


But as above, if you gave inaccurate information then this is your own fault Sorry !