possible misold mortgage

FIASCO_2

My mother went to her bank to ask for a £10k loan. She was advised to take an interest only mortgage from her mortgage for the amount. This was in 2009, she is currently 86 years old.


How to pay the amount at the end of term was not mentioned. Nor was her age and the fact she and my father are pensioners with low income receiving pension credit.


I recently realised they had this interest only mortgage and managed to have it changed from the variable rate to a fixed rate enabling them to be paying less of a monthly payment. Over the years the interest rate fluctuated and they paid over the odds for the mortgage. In getting a better rate they had to change their mortgage to interest only again as they failed the current affordability test for a repayment mortgage (repayment was our preferred option and we would have attempted to pay the debt off as fast as we could).


Recently we wrote to the bank to say we believe in 2009 they misold the mortgage as the didn't do proper checks and inform my mother of the facts. They have fobbed me off now saying we are out of time to do anything. Recourse is ombudsman.


I am posting to ask if anyone has a similar experience and could advise of a way forward here.


Its unfortunate that I didn't realise before recently that this situation had occurred and very disappointing that the bank have been so careless in the way they dealt with my mother.


Any help? (Halifax..Bankof Scotland)


Fiasco

Thrugelmir

FIASCO wrote: »

She was advised to take an interest only mortgage from her mortgage for the amount.

What evidence do you have to support this assertion?

gardner1

78/79 years old........ very surprised a bank would agree a loan under the circumstances

FIASCO_2

The word of my mother. No paperwork given to her. What my mother believed to be friendly advice from a lady who worked in the bank that my mother had seen there for years. Said lady since retired. And the bank tell us they moved to a new computer system a few years back and they wont have any paperwork! So no paper proof, unfortunately.

FIASCO_2

gardner1...yes I agree....but a loan would have been paid off by now had it been a loan as my mother requested. The mortgage being interest only goes on....with no final amount saved to pay it back. A poor situation.

worried_jim

FIASCO wrote: »

The mortgage being interest only goes on....with no final amount saved to pay it back. A poor situation.

No it doesn’t, all mortgages have a “term” normally 25 years. Seems remarkable that at 79 someone was offered a new mortgage as HBOS certainly weren’t doing mortgages to pensioners in 2009.

Could it be a equity release scheme and you/mother have mixed the terminology?

dunstonh

She was advised to take an interest only mortgage from her mortgage for the amount.

Most banks didnt offer an advised service in 2009. They were order takers.

They have fobbed me off now saying we are out of time to do anything. Recourse is ombudsman.

If you are timebarred, you dont get access to the ombudsman. All the FOS will do is check the timebar is valid. if it is,then they cant look at it.

There is something a bit strange about this as banks did not routinely lend new money to people in their 70s unless the person asked and they had the income to support it.

gardner1

worried_jim wrote: »

No it doesn’t, all mortgages have a “term” normally 25 years. Seems remarkable that at 79 someone was offered a new mortgage as HBOS certainly weren’t doing mortgages to pensioners in 2009.

Could it be a equity release scheme and you/mother have mixed the terminology?

"Could it be a equity release scheme and you/mother have mixed the terminology?"

that's what i thought

Thrugelmir

FIASCO wrote: »

The word of my mother. No paperwork given to her. What my mother believed to be friendly advice from a lady who worked in the bank that my mother had seen there for years. Said lady since retired. And the bank tell us they moved to a new computer system a few years back and they wont have any paperwork! So no paper proof, unfortunately.

Your mother spent the money presumably? As there must have been a purpose in applying for the loan.

haras_nosirrah

I guess they may have been doing your mum a favour or at least trying to. If your mum had limited income a loan of 10k would probably have been too expensive. I am guessing around £250 a month based on a 5yr term and they wouldn't have had access to the banks best rates and I guess would have been declined due to affordability. If they were of limited means and on pension credit would they have been able to afford £250 a month? The interest only mortgage for the same money would have been possibly £30-£40

can you not pay the mortgage off yourself and put a charge on the property for the 10k? may be the simplest thing all round

kingstreet

worried_jim wrote: »

No it doesn’t, all mortgages have a “term” normally 25 years. Seems remarkable that at 79 someone was offered a new mortgage as HBOS certainly weren’t doing mortgages to pensioners in 2009.

Could it be a equity release scheme and you/mother have mixed the terminology?

Retirement Home Plan?

Interest-only mortgage with a (upto) 40 year term intended to be repaid from property sale proceeds following death?

https://www.retirementmortgages.org.uk/how-does-the-halifax-retirement-home-plan-mortgage-work-in-practice/