sub mortgage sold as a loan??

beejay2_2

Hi there
Please can anyone help?
My partner applied a few years ago to her mortgage provider, Lloyds, for a loan. She was granted the loan and was lead to believe that it was over a 5 year period.
It transpires that the loan was in fact a sub mortgage and it runs the full term of her mortgage.
She feels aggrieved by this and feels she was hoodwinked but although she has spoken to the bank she feels she came up against a brick wall.
It there any recourse for this and if so who is the best people to deal with it?
Thanks in anticipation
Beejay

getmore4less

how much did they borrow?

How much was the monthly payment?

csgohan4

did she read the terms and conditions?

Thrugelmir

What did the offer paperwork say that she signed? As this clearly states the terms, repayments etc. Lenders are not permitted to hoodwink. Hence the stonewall she's hit. Unfortunately there's no recourse for ones own bad decisions nor any liability on lenders to offer compensation.

pjread

If you have paperwork describing something other than what was set up, you should have some recourse. Otherwise, I'm afraid the agreement would generally stand.

I guess they would have needed to make higher payments than they had, so the recourse you're after is for the bank to make a request for payment of the balance (plus interest at the agreed rate) ? If so depending on the terms you might be able to achieve that anyway by overpaying.

beejay2_2

These loans were taken out over 5 years ago and she tells me that the bank didn't clarify the time scale and paperwork was more or less put under her nose to sign. The paperwork no longer exsists to check.
Yes we all make mistakes but im sure that is exactly what the banks and lending houses bank on.

Senior_Paper_Monitor

Based on the OPs information the suggestion is that the lender provided a mortgage (long term / low interest rate) rather than a loan (medium term / higher interest rate).

Both would have involved the issuance of paperwork describing the basics of the deal, including clearly stating the monthly payments.

The mortgage option would have certainly have involved lower payments than the loan option.

The mortgage option (if in place) would certainly have been included on the annual statements - the loan option would have been on separate paperwork.

It is (possibly, even probably) true that the true cost of the mortgage over the planned term, compared with true cost of loan over the planned period might be slightly greater, but overpayments (which are usually unlimited after the initial period) would have enabled the borrower to complete over 5 years on the 'extra borrowing mortgage' at a much cheaper total cost than the loan simply by making the loan rate monthly payments rather than the mortgage rate monthly payment.

I suspect that the borrower is just looking for a something to complain about - most borrowers would 'kill' for the opportunity to take the mortgage rather than the loan option.

mrginge

beejay2 wrote: »

These loans were taken out over 5 years ago and she tells me that the bank didn't clarify the time scale and paperwork was more or less put under her nose to sign. The paperwork no longer exsists to check.
Yes we all make mistakes but im sure that is exactly what the banks and lending houses bank on.

Dont be ridiculous.

Senior_Paper_Monitor

How long ago was this ?

Presumably the option to overpay and get rid of the mortgage in loan term timescales still exists ?

Were any overpayments made during the period to date - or did the borrower somehow assume that mortgage over 25 year monthly payments were sufficient to meet the loan over 5 year capital repayments (+ interest) ?

Senior_Paper_Monitor

How much was the 'loan/mortgage lending' ?

How much has she been paying a month ?

minimike2

The mortgage process just doesn't work in the sense that paperwork could be just "shoved under her nose" and that was it. I fail to understand how it could ever be the case that the situation described in the OP could have possibly occurred in this way.