help! - endownment not activated by mortgage provider 16 years ago

eadie_2

Hello

Great site here, I've been surfing for a while, but have registered now as I was hoping someone could help.

My father took out a full endownment, interest only mortgage with the Halifax and Standard Life around 16 years ago.

It has now come to light that the endownment plan was not activated by the halifax via standard life. We arranged an appointment with the Halifax who in writing admitted it was their mistake that the policy was not put on risk.

A letter from the Halifax was later sent out stating that they had referred the complaint to Standard Life?!?!

2 months on, just received a letter from Standard Life stating the policy was ‘not proceeded with’ and that no plan is in place. End of.

In sum this means that we’ve been making interest only payments for the last 16 years with no endownment to support the mortgage.

Surely with the letter from the Halifax admitting liability there is something that we can do?

Any help would be greatly appreciated.


cheers,
eadie

Jonbvn

You need to go and see a solicitor on this. Make sure you retain all relevant correspodence.

dunstonh

http://www.financial-ombudsman.org.uk/publications/guidance/mtge_endowment_not_taken_out.htm

With respect to the above poster, going to a solicitor is not required as it will incur costs which would not be the case if you go to the FOS.

You will have to consider why you didnt notice the Standard Life direct debit going out. That will be held against you.

I refer you to:
A typical case where we would probably consider the lender less than 100% to blame is where: the terms of the mortgage required that the lender should see the policy, and it failed to do so; but the borrowers must have known that no policy had been taken out.
In such cases, we would reduce the compensation proportionately. And, once borrowers must have known there was no policy (for example, by discovering that they are not paying premiums) and keep quiet, it would not be fair to disregard any notional past savings that accrue after that.

silvercar

I would have thought it reasonable to assume that the halifax would collect the premiums with the mortgage interest payment, considering the tie-in between the two companies at that time.

eadie_2

dunstonh wrote: »

http://www.financial-ombudsman.org.uk/publications/guidance/mtge_endowment_not_taken_out.htm

With respect to the above poster, going to a solicitor is not required as it will incur costs which would not be the case if you go to the FOS.

Thanks for the advice.

You will have to consider why you didnt notice the Standard Life direct debit going out. That will be held against you.

Thanks Silvercar, your reply is exactly what we assumed all along, yes it was a bit of a lazy approach but seemed reasonable to assume so.

silvercar wrote:

I would have thought it reasonable to assume that the halifax would collect the premiums with the mortgage interest payment, considering the tie-in between the two companies at that time.

Thanks for the response all.

I shall be completing the complaints form from FOS and see how things develop. will keep you informed.

cheers,
eadie.

EdInvestor

These products were described as "endowment mortgages" and sold by building societies.If a person had previously had a repayment mortgage from a building society, and this was his first endowment mortgage, seems to me that unless he was specifically told there would be two payments going out of his account, it would not be unreasonable to assume that the arrangments for repayment and endowment mortgages were the same - ie a single payment only was involved. He would have been told the endowment mortgage was cheaper than the repayment one, after all.

silvercar

One problem you may face is that FOS will only order that you be put back in the situation you were if the error had not occured.

As you have been paying interest only payments, it may be that you are not financially worse off. All these endowment miss-selling claims showed that people would have been better on a repayment mortgage. But if you haven't been "wasting" your money on a failing endowment you may not be out of pocket.

I accept that you have not had a repayment vehicle and now there is a lot of money to find, but you have benefitted by lower repayments all these years so may not be financially worse off - in the strictest sense of losing money out of your account.

EdInvestor

In sum this means that we’ve been making interest only payments for the last 16 years with no endownment to support the mortgage.

Have you looked at converting the mortgage to repayment? How much higher will the premiums be to pay it back over the 9 remaining years?

What does it look like if the new mortgage term is extended to 15 years?

In the early years, people pay mainly interest back on their mortgage: they don't start to reduce the capital owed for quite a few years, and most of the loan is actually repaid in the final 10 years of the mortgage term, particularly if interest rates are high, as they were 16 years ago.

So the situation may not be as bad as you might imagine, particularly given the poor performance of many endowments in recent years.

Gorgeous_George

I have often said that people should be required to hold a financial qualification before they could take a loan/mortgage.

This sounds like more reason to do so.

dunstonh provided the way forward.

I'm surprised that the salesman didn't realise that he wasn't getting his commission.



GG

mystic_trev

I agree with GG whichever way you look at it the OP's Fathers not being paying what he ought to have done, and must take at least some of the responsibility. I can't help but think a lot of people who've recently taken out Interest only mortgages will be whinging sometime in the future that they didn't know they weren't repaying the Capital amount as well.

mystic_trev

eadie wrote: »

My father took out a full endownment, interest only mortgage with the Halifax and Standard Life around 16 years ago.

It has now come to light that the endownment plan was not activated by the halifax via standard life. We arranged an appointment with the Halifax who in writing admitted it was their mistake that the policy was not put on risk.

A letter from the Halifax was later sent out stating that they had referred the complaint to Standard Life?!?!

2 months on, just received a letter from Standard Life stating the policy was ‘not proceeded with’ and that no plan is in place. End of.

In sum this means that we’ve been making interest only payments for the last 16 years with no endownment to support the mortgage.

Surely with the letter from the Halifax admitting liability there is something that we can do?

Any help would be greatly appreciated.


cheers,
eadie

Why not go the 'whole hog' and also claim for being mis sold an Endowment he hasn't paid for, and whilst you're about it, where are me bleedin windfall shares! I dispair!