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

defender_of_the_weak

As I mentioned the results are mixed. Where the responsibility is shown to be at the door of the building society then people have had their outstanding balance reduced to the point it would have been if the endowment had been paid to date. We have seen other cases where the borrower cancelled the policy 1-2 years in and did not advise the lender, clearly the company cannot be held responsible unless they were notified and even then the loss is not always attributable to the lender.

Key issues tend to be

Did the lender also arrange the policy

Was it assigned (or should have been)

Did the lender know that no policy was in place

Did they notify the borrower that the mortgage was not being repaid either at outset or once the problem was discovered

timbur

Dear Eadie,

I note the comments made in response to your post. However I think the fact that your father was not used to the way in which an endowment policy operated (because he had no prior exposure to endowments) is a point in his favour. I also think the fact that he did absolutely nothing for 16 years is consistent with his belief that he thought all was in order. I agree with the comments others have made, in that you should try the ombudsman (at the Financial Ombudsman Service) before employing a lawyer. You might consider sugggesting to FOS the following:

If Halifax assured your father that the policy was in the process of being arranged, should it not be held estopped from denying that fact. Estoppel is a very difficult issue but the argument might be: "to the extent that your father entered the mortgage contract on the basis that an endowment was being arranged to cover the mortgage debt, the assurance that Halifax were making arrangements to put it in place (if that was how it was worded) ought to be treated as binding, as against Halifax".

I also find it difficult to believe that your father would, or might be, no worse off, because of the savings made in not having to pay the premiums on the endowment. Again, given he believed that the policy payments were rolled up in the interest paid on the mortgage, he might well have altered his position to his detriment on the strength of that i.e. believing his mortgage was covered by the endowment he spent the money on other things. If Halifax led him to that belief, they may be held responsible for his change of position.

There is one further point. If Halifax have negligently misrepresented the true state of affairs, then to permit them to turn what was intended as a secured loan into an interest only advance, would be to permit them to profit from a wrong. They will, in such a case, have secured a debt that will earn them interest for longer than should have been the case.

Please note that I am not a lawyer, and this is not intended as legal advice- just some ideas to check out.

Best Wishes

Timbur

johnbfan

Every year we have received a statement on how our endowment is proceeding (apparently this year it may be on target!!!). Did you not get any of these?

I have kept every one.

EdInvestor

johnbfan wrote: »

Every year we have received a statement on how our endowment is proceeding (apparently this year it may be on target!!!). Did you not get any of these?

If you'd never had an endowment mortgage before, there's no reason why you would expect separate statements about the endowment.Not getting any would not alert you to think there was a problem.

If you thought you had a repayment mortgage and started getting endowment statements, that would be a different matter.

Kez100

We don't get an annual statement - Scot Eq - I have always got to ask.

moneysaver

The problem is the person in question now has to buy another life policy to cover the remainder of the mortgage. Try buying a life policy 16yrs down the line, it will now cost a lot more than the original policy cost & he only needs it for 9yrs. Surely there should be some redress for that?


Moneysaver

dunstonh

The problem is the person in question now has to buy another life policy to cover the remainder of the mortgage. Try buying a life policy 16yrs down the line, it will now cost a lot more than the original policy cost & he only needs it for 9yrs. Surely there should be some redress for that?

What about the money saved?

Plus 1991 was a really poor year to buy endowments. So, the OP has missed out on those bad years and can start with a modern low cost contract with better investment options or go straight to repayment.

moneysaver

dunstonh wrote: »

What about the money saved?

Plus 2001 was a really poor year to buy endowments. So, the OP has missed out on those bad years and can start with a modern low cost contract with better investment options or go straight to repayment.

What do you mean 2001 it was purchased 16yrs ago, read OP.

Go straight to repayment with only 9 years to go?. The payments will be sky
high.

Also the person in question may now have an illness which would influence any new life policy taken out.

Moneysaver

EdInvestor

The cost of life cover has reduced significantly in recent years, which may compensate for the more advanced age.

dunstonh

I meant 1991. 2001 was actually a good time to start regular investments