Equity Release - Misinformed

Caz3121

Jaffa_Bell wrote: »

My mother had to apply for the equity release loan before she could make application for the interest to be paid. The loan was agreed and the works had started before she was advised that only a small portion of the interest would be paid by DWP. The initial information verbally provided, unequivocally was that the interest ‘would’ be paid if she received pension credit. No warnings or cautionary advice was given. It was interpreted by my mother and sister to mean that getting the interest paid was just matter of just making the application, as she was told by the agent that they met the criteria which qualified my mother to have the interest to be paid.
The letter from the agent in one of the paragraphs states ‘We note from our records that you are currently in receipt of Pension Credit. Due to the improvements, repairs or adaptations that you are considering you may be eligible for assistance from the DWP towards any monthly interest payments that are required…
The improvements made by my mother were for improvement, repair or adaptation, at no point was she advised that the criteria falling under these headings for the purposes of the interest being paid were very strict. (The agent already said verbally that my mother qualified, so my mother and sister did not even consider further advice was required.)
I feel that the agent was negligent in failing to give full information surrounding the uncertainty of the interest payment being paid DWP

The issue will be that it appears you do not have it in writing that it will be paid, only that you may be eligible
I assume that the DWP have decided that a number of the improvements were nice to have's rather than essential. Do you believe you have a case to have any of these reconsidered. eg replacing a bathroom as the other one is old but functioning would not be counted but replacing a bath with something suitable for medical needs may be.
The reason it is quite restricted is that otherwise it would be open to people taking equity release and heading off on a world cruise, doing unnecessary improvements and leaving the government to pick up the interest payments so it will be down to what they class as essential

andyfromotley

i'm not sure where this is going to go on here. I doubt anyone here will be able to give you anything other than their opinion. If you feel there is grounds to complain you need to do so, it sounds as if your mum has had a rough deal but i suspect the lack of written evidence will hamper your (mums) complaint?

Thrugelmir

£22k would pay for a considerable amount of "improvements". The agent would not have the insight to comment on eligibility. Hence what they wrote. Any recollections have no value. It's what is wriiten that matters.

rebeccatom

Your mother needs to make a complaint to the company that gave her the advice. They will have a complaints procedure, normally on their website. This will also tell you who their regulator is. If the business refuses the complaint then you can take it to their regulator.

If the regulator is the FOS (Financial Ombudsman Service), then they deal with cases all the time where the adviser gave misleading information in contradiction to the documents that were given with the sale. They will listen to your mothers side and ask the business for their side and make a judgement call.

Here are some examples from FOS when they have dealt with Equity Release cases.
http://www.financial-ombudsman.org.uk/publications/ombudsman-news/72/72-mortgages.html

Jaffa_Bell

Thank you all for your comments. We are going to proceed down the FOS route, as the Agent who is no longer in business gave misleading information. My mother is not disabled but has needs consistent with being older. All the works were essential, i.e. i) New windows, as previous ones were leaking, ii) Replaced bathroom, as my mother was struggling to get in and out of the bath. The bathroom was updated and the bath was changed to a shower. As well adding features such as easy to turn on/off taps, iii) Kitchen was replaced, as previous one was very old and had damp and my mum had great difficulty bending to use the oven and fridge. Materials and labour was approx 20k. The other 1.5k were legal and admin fees added onto the loan by loan company!

[Deleted User]

SMI or support for mortgage interest which i assume is what you thought would be paid by the dwp in full have very complex rules when it comes to re-mortgaging,they will only pay for certain things and then only if fully receipted,it may well be an idea to look into this first
my only other suggestion would be for her family to pay the £65 between them after all its not a lot each month is it?

missbiggles1

I thought that the whole point of equity release loans was that the interest is rolled up, added to the original loan and the total repaid on the sale of the property after the death of the borrower?

http://www.which.co.uk/money/retirement/guides/equity-release-explained/