Nearly one million face mortgage difficulty.

Mistermeaner

I was missold the interest bit of my repayment mortgage. The capital bit I understood but not the interest.

Can I have some free money?

Graham_Devon

michaels wrote: »

I'm will swear until I am blue in the face that I was miss sold my IO if there is any compensation in it:)

Everyone will!

There is this case, where £12,000 seems to have been awarded by the high court over miss selling of an IO mortgage.

Though it seems this was over the specific advice to buy a Spanish property as a repayment vehicle.

The case, Emptage vs Financial Services Compensation Scheme, involved a client, Ms Emptage, who on the advice of an IFA remortgaged her property with a £110,000 interest-only mortgage and invested the proceeds in a £70,000 holiday home in Spain, which was also the intended capital repayment vehicle.

The Spanish property is now worthless and Emptage has been left with a mortgage of £110,000 and no way to pay it. The IFA firm is no longer solvent, so with no Professional indemnity to cover the claim, was directed to the FSCS’s as scheme of last resort.

Originally, the FSCS concluded only the regulated mortgage advice, not the unregulated property purchase were eligible for redress, which led to the £12,000 award. The Court ruled this was “irrational” saying the redress should relate to the “package of advice” and without the advice she would have paid off her £17,000 repayment mortgage by 2015.

http://www.mortgagesolutions.co.uk/news/high-court-ruling-will-increase-interestonly-missale-compensation/

So things, it seems, are happening.

BobQ

michaels wrote: »

Why do we care about how much equity owners with mortgages have but allow renters to have zero equity with impunity.

If I had a deal with a bank to pay the interest until some point in the future when I had to pay the capital back you would need to take me to court to unilaterally change the deal to one where I had to repay the capital a a new schedule - then again for the banks it could be a huge profit maker to unilaterally break an interest rate contract.....

I think that is is a defensible position under current rules. It assumes that anyone taking out an IO loan has a plan for when the term ends. Unfortunately many people have no plan.

I see nothing wrong with someone being asked to demonstrate to the mortgage provider that they understand the problem and have a plan. But I have no wish to see people retired on modest incomes being evicted and becoming a burden on the state for want of a little compulsion or forward planning. It does not necessarily mean changing the IO mortgage. It might just require a less formal commitment to reduce the loan during the remaining years.

But I agree it a question of the lesser of two evils. I would be quite annoyed if I had to pay off my IO mortgage before I have to do so!

Thrugelmir

Graham_Devon wrote: »

So things, it seems, are happening.

Which means that the cost of borrowing will rise for everyone. As compensation has to be paid for.

wotsthat

Graham_Devon wrote: »

Doubt it's made a slight bit of difference to any compensation issues down the line.

The issue is always in the selling. Warning afterwards doesn't make a blind bit of difference.

Which are currently looking into IO miss sales.

The difference is it's now unlikely that anyone with an interest only mortgage doesn't know what it means. Therefore the sensible will take steps to find a repayment vehicle and the mortgage will be repaid. the less sensible won't bother and bleat about compensation at the end when there's no evidence of loss and they'll lose their case anyway.

Even on this forum I can't quite believe we're giving dignity to the idea that anyone taking on a IO mortgage wasn't clear about what an interest only mortgage was given there's a strong hint in the name.

Of course, there will be a few examples of mis-selling but I expect the customers to be simpletons who shouldn't have been given any mortgage let alone an interest only mortgage.

michaels

I'll happily be considered a simpleton if it results in 300k of mortgage being written off :rotfl:

silvercar

23 years ago we bought a family home for 167k, now it would be worth about £600k. IO mortgages were available 23 yrs ago, so if we had bought on 100% IO mortgage at the time, we could now be preparing to sell up and buy outright a smaller home with the equity released by the sale.

Seems a reasonable plan to me, have a family sized home while you have family living with you and then move to a smaller place once the children have left home.

I accept that living in the south-east and reasonable luck in timing would have aided with the plan, but with less luck, moving to a cheaper area as well as smaller property would be possible.

Graham_Devon

wotsthat wrote: »

Even on this forum I can't quite believe we're giving dignity to the idea that anyone taking on a IO mortgage wasn't clear about what an interest only mortgage was given there's a strong hint in the name.

It's not giving dignity to it.

It's simply saying in legal cases, it matters not one jot who knew what.

All that matters is that regulations were followed. If anyone, regardless of what they knew, can suggest they will miss sold, that's all that matters. They may well have a case in the future dependant on what the future holds in this regard.

wotsthat

Graham_Devon wrote: »

It's not giving dignity to it.

It's simply saying in legal cases, it matters not one jot who knew what.

All that matters is that regulations were followed. If anyone, regardless of what they knew, can suggest they will miss sold, that's all that matters. They may well have a case in the future dependant on what the future holds in this regard.

They need to get their skates on if they want to claim mis-selling..

If you want to complain to the Financial Ombudsman Service there is a time limit of six years from when you were sold the product, or three years from when you noticed (or ought reasonably to have become aware) something was wrong – whichever is later.

https://www.moneyadviceservice.org.uk/en/articles/financial-mis-selling-what-to-do-if-you-think-its-affected-you

No point waiting until the money is due to be repaid because the lenders have taken action by reminding IO customers they are on IO (as if they needed it) and the implications. They are in a strong position to prove the customer reasonably should have been aware from that date even if they didn't grasp a IO loan was an IO loan.

They really ought to be able to show loss too - with 25 years of cheap digs and HPI equity I wish them the best of luck.

That tick tock sound isn't the ticking IO time bomb it's time running out for the compo bandwagon.

Graham_Devon

wotsthat wrote: »

They need to get their skates on if they want to claim mis-selling..

I'm not suggesting there will or won't be any compensation. All I'm saying is there will be plenty of people looking into it.

I think you are completely right to say that due to HPI any possible claims will be tiny. But that's down to luck rather than anything else.

As for the 6 year time frame, that doesn;t apply to claims per se. It only applies to complaining to FOS. People are claiming PPI for loans going back further than 6 years. Specifically, loans which are still current or have been repackaged. Which would obciously apply to mortgages.