miss sell and if so how do i go about it?

Steve1981

i'll try to keep this brief - we bought our house in 2004 - using Equios as a mortgage advisor. property value was 89,000 and we got a mortgage for 105,000. of the 84 was lent as teh mortgage and the remainder as an unsecured loan at teh same rate as the mortgage. obviously we needed some of the difference to be able to afford the house itself (to get to teh 89)

however some of the difference was that we were told northern rock were the only lender prepared to offer and that they would only do so if we would incorporate any other debt that we had at the time to them too. about 15k

perhaps at the time we were a bit wet behind the ears but the advisor was recomended to us and so we went with it. now 10 years on the unsecured loan still stands at 10k and the original debt would have been cleared over 5 years ago.

having since spoken to norhtern rock (well now NRAM) they have informed that there was no such condition that they would only lend if we took other debt to them - nievity conbined with what we were told has cost us thousands - by my maths at least 12k.

our financial sitution has changed dramatically over that time though needless to say this is a lot of money - whilst it cnt be proven Im wondering if they were 'the only lender' or the best bet for the advisor.
looking back it wouldnt have made sence for NR to state that condition, it would have meant exisiting debt was transfered to a higher rate, taking longer to pay and inpacting affordability, increasing the liklihood of default. its certainly something we wouldnt have done on our own

Equious seem to have disappeared (would have been north east based) though im darned if i can find them. I suspect that my case if with equios as tehy were the advior. I do have the name of the agent who is now a company director and have what could be their telephone number.

Im looking for any advice on what we be the best route to take on this please?

dunstonh

Im looking for any advice on what we be the best route to take on this please?

When in 2004 did you apply for the mortgage? Mortgages became regulated in October that year.

I'm struggling to see any real mis-sale here. Yes, there is the possibility that transferring the debt to NR may have seen you told the wrong thing (although there is likely to be no proof to show it was done wrong). However, all this did was transfer debt you already had from one or more providers to a NR. It did not create new debt. Although you suggest a little bit of it maybe to facilitate the sale of the previous property. However, nothing wrong there.

whilst it cnt be proven Im wondering if they were 'the only lender' or the best bet for the advisor.

NR were the main ones for going above the usual loan to valuation limits. So, it would not be at all unusual for them to be used.

Steve1981

hi and thanks for the reply - completion occured in around may of 2004.

this was the first home that we bought, i fully appreciate that LTV is more than usually the case and am aware that often NR were one of a small pool that would have done this.

My belief is that the advisor was financially better off for getting the existing debt transfered to NR, there cant really be any other explanation (unless im missing something). Surely a company saying they will only provide one service if you take something else is wrong? (wasnt that part of the hoo haa about PPI? and people being told it would be the only way or increase teh chances of an acceptance?)

kingstreet

The rate on the unsecured element of Together was probably lower than the rates for the unsecured debt you consolidated. It is true that re-scheduling short-term debt over a longer period will end up costing more, but the reduction in monthly payments you achieved could have been used to repay the unsecured element faster.

NR may not have had a rule that your unsecured debt had to be consolidated, but your new home may not have been considered affordable without doing so. Ergo - it was consolidate, or be unable to buy...

Could you have afforded the mortgage and the previous unsecured debt payments you were making?

What did you do with the savings you made each month when the consolidation reduced your monthly costs?

vectistim

Were you bumping up against affordability limits?
Your other loans were probably at a rate higher than the unsecured portion from NR, which might have impacted on the maximum they could lend you.
If this is the case, once you were in a position to, did you look into making over payments, back up to the original repayment level of your original loans.

Steve1981

we were young and daft - no over payments were made during those years and any spare money we had over those years went towards a wedding and holidays

NRAM have given no indication of any concern from an affordability point of view at that (or more recent) time

antrobus

Steve1981 wrote: »

hi and thanks for the reply - completion occured in around may of 2004....

So as intimated earlier, that would have been before the Mortgage Conduct of Business rules came into effect on 31 October 2004. I don't believe that the FOS automatically has jurisdiction to consider complaints involving mortgage intermediaries arising from before that date.

Edit: Actually what it says below is that ;

If the firm was not previously covered by the Mortgage Code Arbitration Scheme, then we cannot consider any complaints against it which concern events that took place before the firm joined our compulsory jurisdiction.

http://www.financial-ombudsman.org.uk/publications/ombudsman-news/55/55-mortgage-intermediaries.htm

kingstreet

IME people turned up on the doorstep bricking it that they couldn't get on the housing ladder and asked for a solution.

They had card debt and car loans. They had no deposit.

NR Together provided a solution and those who used it the right way, saved the money they had been paying and used it to pay down the unsecured element.

Affordability is judged at the time of the application and is based on income and outgoings. You may have been able to afford the mortgage and your existing unsecured debt, we don't know.

What you need to do, is find your sales documentation, key facts, mortgage offer and suitability letter. These will discuss what was done and the reasons for that. If the sale was post October 2004, the advice was regulated.

Either way, you may be able to make a complaint to the Financial Ombudsman Service if you can't complain to the firm, as it ceased in May 2006 after being directly authorised by the FSA.

If the FOS upholds a complaint, compensation may be awarded by the Financial Services Compensation Scheme (FSCS).

R_P_W

So you borrowed more money than the property was worth? You knew this at the time.

You then admit that rather than make overpayments to bring the debt down you spent the cash on wedding and holidays?

Now you are claiming being mis sold and wondering why you still have the debt?

dunstonh

I

f the FOS upholds a complaint, compensation may be awarded by the Financial Services Compensation Scheme (FSCS).

The FOS cannot get involved if the firm no longer exists (looks like a limited company). The FSCS mortgage protection started on post October 2004 cases.

copy and past from FSCS website: The FSCS is only able to consider claims for mortgage business conducted on or after 31 October 2004.