Mortgage indemnity insurance

guzorc

This seems to be a bit of a hot topic at the mo, and I understand (now) that it was used to protect the insurer, if you were seen as a risk. How ever, I believe I was mis-sold this. Here's why.... When I applied for my mortgage, I had a repayment vehical in place that had already been running for 8 yrs and was over performing. So at the time of my application, my mortgage was more than covered. I put down an 18% deposit and I was getting favourable offers from more than one company. I went with the Halifax, and was recommended to talk to their "in house" advisor. He told me all was fine but recommended that I take out this insurance. He said that if the worst happened, then the mortgage would be covered and that way my endowment would not be needed. He also talked me out of taking it from the deposit and said it would be ebtter in the long run if we put it on the mortgage. I have only just recently found out that this insurance never covered me as he explained it at all, and is all for the benefit of the lender. So, to sum up. It was never a condition but was offered. Can I claim it back and is there a time lock?

dunstonh

This seems to be a bit of a hot topic at the mo

No its not. No press coverage and only a couple of posts every 6 months or so.

How ever, I believe I was mis-sold this.

You were not. You cant be mis-sold on it.

When I applied for my mortgage, I had a repayment vehical in place that had already been running for 8 yrs and was over performing. So at the time of my application, my mortgage was more than covered.

irrelevent. None of that impacts on MIG.

I put down an 18% deposit and I was getting favourable offers from more than one company.

That is why you paid MIG. You only had an 18% deposit. You needed 25% to avoid MIG.

I went with the Halifax, and was recommended to talk to their "in house" advisor. He told me all was fine but recommended that I take out this insurance.

I suspect your memory is hazy here as that would not have been the case. You did not get a recommendation to take out MIG. You had no choice in the matter other than increasing your deposit.

He said that if the worst happened, then the mortgage would be covered and that way my endowment would not be needed.

That isnt was MIG does.

He also talked me out of taking it from the deposit and said it would be ebtter in the long run if we put it on the mortgage.

If you had paid out of the deposit then your deposit would have been less and the MIG would have been higher. Your mortgage deal rate may have been worse as well as they were usually based on size of deposit. So, adding it to the mortgage was quite common.

So, to sum up. It was never a condition but was offered.

Wrong. It was a condition. MIG was never optional.

Can I claim it back and is there a time lock?

No you cant claim it back.

[Deleted User]

You can't claim it back, you paid this because you wanted a mortgage without a sizeable deposit.
http://www.home.co.uk/guides/mortgage_glossary.htm?mig


It's hardly a "hot" topic and no one was ever mis-sold this. It covered the lender, not you.

guzorc

I only said it seemed to be a hot topic because I found a few more threads than I thought there would be.

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That is why you paid MIG. You only had an 18% deposit. You needed 25% to avoid MIG.

Not true, I didn't need this at all. In fact the size of my deposit reduced the interest rate that I was offered. This was just at the point where mortgages were being handed out 10 a penny.

Quote
Quote:
When I applied for my mortgage, I had a repayment vehical in place that had already been running for 8 yrs and was over performing. So at the time of my application, my mortgage was more than covered.
irrelevent. None of that impacts on MIG.


Why is it irrelevent. If I have the means to more than cover the mortgage? Could it be because it hadn't matured yet. (If so, I can see why, since we all know what happened to them)


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I suspect your memory is hazy here as that would not have been the case. You did not get a recommendation to take out MIG. You had no choice in the matter other than increasing your deposit.

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Wrong. It was a condition. MIG was never optional.

My memory is very clear on this point, and I suspect your motives given your clear cut opinion that it is not even possible. This was definately sold as an "option". I have since spoken to the Finacial Ombudsmans service, and they think i may well have a case worth investigating.


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You can't claim it back, you paid this because you wanted a mortgage without a sizeable deposit.
"Link deleted because I am a new poster"


Thanks for the link, but it just throws more doubt on mine. Using the figures for a 100% mortgage and 75% MIG threshold, I would have have paid £890 tops. But I paid £2000 on a £44500 property with 18% deposit, and if i have worked it out correct using the figures in the link, I should have paid £250. Which I think is reasonable, and not worth arguing about.

dunstonh

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That is why you paid MIG. You only had an 18% deposit. You needed 25% to avoid MIG.

Not true, I didn't need this at all. In fact the size of my deposit reduced the interest rate that I was offered. This was just at the point where mortgages were being handed out 10 a penny.

It is true. MIG was charged only to people that had low deposits.

Quote:
When I applied for my mortgage, I had a repayment vehical in place that had already been running for 8 yrs and was over performing. So at the time of my application, my mortgage was more than covered.
irrelevent. None of that impacts on MIG.


Why is it irrelevent. If I have the means to more than cover the mortgage? Could it be because it hadn't matured yet. (If so, I can see why, since we all know what happened to them)

MIG has nothing to do with repayment vehicle. It was to do with the size of your deposit.

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I suspect your memory is hazy here as that would not have been the case. You did not get a recommendation to take out MIG. You had no choice in the matter other than increasing your deposit.

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Wrong. It was a condition. MIG was never optional.

My memory is very clear on this point, and I suspect your motives given your clear cut opinion that it is not even possible. This was definately sold as an "option". I have since spoken to the Finacial Ombudsmans service, and they think i may well have a case worth investigating.

The FOS telephone line always tell you that you may have a case. Indeed, that is virtually their script answer to all enquiries. Given the way you have described it here, the unqualified telephone operator would say that. However, if they had any knowledge on the issue they wouldnt be answering the phones. Chances are they dont even know what MIG is and what you have described is nothing like MIG.

I have no motives. I just know the facts and you are wrong. MIG was not an option other than you increasing your deposit.

[Deleted User]

guzorc wrote: »

Not true, I didn't need this at all.

You didn't "need" it, but it was a condition of you receiving the mortgage on the terms you agreed to.

guzorc wrote: »

Why is it irrelevent. If I have the means to more than cover the mortgage?

If you had used (or been able to use) this money to pay for a greater deposit,your lender would not have required the MIG. You paid the MIG to facilitate the mortgage immediately.

guzorc wrote: »

It was a condition. MIG was never optional.

That is what the other poster said. That also means it wasn't mis-sold.

guzorc wrote: »

I have since spoken to the Finacial Ombudsmans service, and they think i may well have a case worth investigating.

The people who man the phone lines at FOS are not qualified to give advice, so always recommend a complaint. They are notorious for this. FOS themselves won't "investigate", though, until you have made a formal complaint to your lender and have been rejected.

I can tell you with utmost certainty that if you pursue your "complaint" you will gain nothing (and wait upwards of eighteen months in the FOS queue to be told the same as you have already been told here)

Goldiegirl

I used to work for the Halifax


Mortgage Indemnity Insurance was a condition of the mortgage, if the customer borrowed more than 75% of the valuation of the property.


There was no mis-selling, it was not optional. If you look on your mortgage offer, the offer was conditional on this insurance being taken out. It's nothing to do with your endowment - it was basically the lenders requirement to protect themselves in the event of repossession. If the property was repossessed, the lender would have to sell the property to repay their mortgage. If the proceeds of the sale didn't repay the mortgage, they would have claimed on the MIG, to get funds to cover their shortfall.


That's how it worked.


If you had put down 25% or more, then the lender would not have required this policy, as the risk of them making a loss on repossession was considered to be less


You have no complaint - don't waste your time on it, you will get nowhere. Do something more enjoyable instead.

[Deleted User]

Goldiegirl wrote: »

You have no complaint - don't waste your time on it, you will get nowhere. Do something more enjoyable instead.

Which is basically what is said each time this topic comes up on the forum. Odd that the OP seems to have seen and read these other threads but still decided to start another thread about it.

I fully expect our comments to be ignored in this instance too...