Single Premium Mortgage PPI

Nishk

Hi,

I'm brand spanking new to this forum so be nice! (Please?!)

I'm looking at my parents PPI and have come across a document that I believe shows they took out a single premium mortgage payment protection insurance in Oct 2007. This is what it says on the document:

"The insurance premium is a single payment payable on completion of the loan, valid for a period of five years and will not be reviewed through the five year period. If the premium is added to your loan (it was), interest will be charged on the premium at the same rate as the loan for the term of the loan.
The amount of the insurance premium is £18562.50
The interest cost of the insurance is £16919.10
Total cost £35481.60"

Now I know that mppi is still a valid financial product but the fact that this was added to their mortgage and that they paid interest on it again doesn't seem very fair. Also the interest seems alarmingly high...

My question is this, is single payment mppi deemed as unfair and/or mis-sold?
If so, how do I go about claiming? Do I use the normal PPI templates available on mse?

I've requested the statements so I can understand just what has gone on but it would be good to know if I have a direction to go in. We still have the mortgage and are a few years off from completion.

Any help would be appreciated

Thanks

magpiecottage

Coincidentally, I was just exchanging a PM with somebody else about this.

The old Mortgage Code Compliance Board published Good Practice Notes about this.

Although the Mortgage Code was superseded by statutory regulation in 2007, it said that if single premium PPI was recommended then the cost of the premium plus the estimated interest on that premium over the entire mortgage term must be provided to the customer.

It seems, from what you say, that this was done.

So whilst, in most cases, single premium is a reason to uphold a PPI misselling complaint, it seems that in this instance it is not.

Nishk

Ok, thank you for your help. I thought that there maybe something in paying interest twice, and a five year policy being paid over a longer period?

addedvaluebob

Single premium ppi is never a good starting point so I suggest your parents put in a complaint using the templates on MSE. They have been sold an expensive policy, most of which went to the seller for commission, then paid interest on top. Before assuming they were given all the facts and figures, also check the dates of the documents they were issued. It is no good the company telling them about the PPI if this was after the loan completed. Also, you mentioned it was only 5 years. If the loan still exists why was it only a 5 year policy. Don't be put off, go for it and if you get rejected take it to the FOS. If you have posted the right figures they could be due £18,000 plus interest so definitely worth pursuing

Nasqueron

Possible also if the bank accepts the single premium reason and doesn't reject it as they can as per mortgage code quoted above, they may recalculate the protection as a monthly premium and just return the balance.

Nishk

Great, thanks all. I'll have a try!

gremlin807

Hi
A bit late to this party but hey ho!
This is the first time I've heard for definite that there was such a thing as Single Payment Mortgage PPI - and more interestingly that it was embedded in the loan.
Up until now I have been told that MPPI was always a separate monthly premium.  The above may explain why a couple of my mortgages had no visible separate monthly MPPI payment.

Nishk,
If you are still out there, may I ask how you got on with trying to recover the MPPI, and who was the lender?

sparelogin

I think after 7 years, Nishk may no longer be monitoring the thread...

dunstonh

This is the first time I've heard for definite that there was such a thing as Single Payment Mortgage PPI - and more interestingly that it was embedded in the loan.

It is rare and none of the banks did it but a small number of mortgage brokers did.

Up until now I have been told that MPPI was always a separate monthly premium.  The above may explain why a couple of my mortgages had no visible separate monthly MPPI payment.

It nearly always was regular premium.  

If you are still out there, may I ask how you got on with trying to recover the MPPI, and who was the lender?

It doesn't matter who the lender was as none of the lenders did single premium MPPI.

[Deleted User]

gremlin807 said:

Hi
A bit late to this party but hey ho!
This is the first time I've heard for definite that there was such a thing as Single Payment Mortgage PPI - and more interestingly that it was embedded in the loan.
Up until now I have been told that MPPI was always a separate monthly premium.  The above may explain why a couple of my mortgages had no visible separate monthly MPPI payment.

Nishk,
If you are still out there, may I ask how you got on with trying to recover the MPPI, and who was the lender?

Whatever the circumstances, it's moot anyway as the deadline for complaints has long gone.

gremlin807

Not entirely.....