...next 'it wasn't my fault' problem for homeowners?

nearlyrich

I was shocked to hear that someone I know still has an interest only mortgage with no repayment vehicle in place. At the time they took it mid to late 90's they said they would sell the house and downsize or pay with the pension lump sum. However they are not ready to retire and still want to pay into their scheme which would not be feasible if they took the lump sum this year. He is a company director and I thought he would have switched to a repayment mortgage several years ago but he didn't.

Ronaldo_Mconaldo

I think standards in journalism have gone way out the window to,the point where any journalist will be able to copy and paste any old fairy tale from an internet mesage board soon and report it as true. There's no Sarah from wherever who said that. It's just made up to sound like what one of this nations many simpletons might sound like. I mean she took out an interest only mortgage and could barely afford that? So what happened there then? Would she have preferred to be on a repayment mortgage?

shortchanged_2

Ronaldo_Mconaldo wrote: »

I think standards in journalism have gone way out the window to,the point where any journalist will be able to copy and paste any old fairy tale from an internet mesage board soon and report it as true. There's no Sarah from wherever who said that. It's just made up to sound like what one of this nations many simpletons might sound like. I mean she took out an interest only mortgage and could barely afford that? So what happened there then? Would she have preferred to be on a repayment mortgage?

Actually, if you don't believe people like this exist then you're the naive one I'm afraid.

Thrugelmir

shortchanged wrote: »

Actually, if you don't believe people like this exist then you're the naive one I'm afraid.

They exist. But if their story was told in full it wouldn't make headlines.

caprikid1

I think a large percentage of compensation paid out for alleged miss selling is nothing of the sort. Its poor record keeping , if the companies cannot demonstrate the client knew and understood about the policy there is no hope of defending a claim.


I think going forward companies have been caught out by the Compen-sat-shun culture and have their backs covered.

Thrugelmir

caprikid1 wrote: »

I think a large percentage of compensation paid out for alleged miss selling is nothing of the sort.

PPI was totally mis-sold. The product was heavily commission based with a very high profit margin. Mortgages do not face the same issues.

KayTM

Having read this thread, it just occurred to me that maybe it could be relevant to us.

We bought a house about 20 years ago with a mortgage from Northern Rock. (The house was valued at £90k at that time, and I don't remember the LTV.) I would need to check that the loan was entirely interest only. However, the capital was supposed to be paid off by several endowment policies which would mature at the end of the loan period.

As it turned out, we sold the house about ten years later and repaid the lender (and didn't take out another mortgage). However, we continued to pay for the endowments as a nest egg to look forward to. And now (20 years on from the initial purchase of the house) the endowments are starting to mature. There's a big shortfall between their value on maturation and what we would have been required to pay as capital on the original loan.

I've not quite got my head around all this mis-selling issue. Do you think we might have any kind of basis for a claim? In any case, Northern Rock no longer exists. It would not have occurred to me even to think about this but there are so many good news stories on here that I just wondered if maybe we were missing out on something.

Jhoney_2

dunstonh wrote: »

I have some sympathy with these people. After all, its not as if the name of the product gave them any clues....

But M'lud, Sarah thought she got the mortgage because she showed an interest, only!

dunstonh

Do you think we might have any kind of basis for a claim

It is unlikely for a number of reasons. Although still possible if they dont apply.

1 - the minute you stopped using the endowment for mortgage purposes, it ceased to be a target amount. So, even if you did complain and were not timebarred (see below) and it was upheld then the calculation for seeing if there was a loss would occur at the date you sold the house. Not the maturity value.

2 - Timebar. You have 6 years from the start of the endowment or 3 years from being reasonably aware of an issue to make a complaint. In the case of endowments this means the statements that were sent out each year showing a shortfall on the middle rate or lower rate are enough to trigger the 3 year timer. Over 3/4 of endowments are timebarred because most of those went out around 2003/4.

3 - Failure to hit target is not actually grounds for complaint. You need a better complaint reason.

getmore4less

What I think should be happening is a clear message across the press and the industry to grab the attention of those that may be in the situation.

Not sob stories but get your act together or you will be moving.

If you can't repay the loan when the term is up you may get an extension on interest only terms till you are put into the position you were before you took out the loan.

You will have to sell.

Provide a framework for the lenders/householders, say 1year min extension to sell(longer if the lender wants) reduced to Zero if the lender gave adequate warning(say 3 years).


Lenders still have the option to refinance as they see fit but have a way out of the situation that everyone knows no surprises for the borrowers.