Mis sold mortgage and/or improper valuation

flatcoat

I remortgaged my home in 2007 to settle my divorce payout and went to an interest only mortgage. The house in LS21 was valued at £200,000 which surprised both my ex and myself given we had expected £160/180k. I had to take a 90% remortgage to spay off my ex wife. At the start of the mortgage I had a highly paid job with significant annual bonus I intended using to pay down the balance. Redundancy at the end of 2008 put a stop to that and my salary is now (and has been for 8 years) only half my annual wage in 2008. Ten years on and the house is still only worth around £160/170k even after significant improvements were made (additional bathroom, mezanine bedroom) to increase usable floor area. In 2009 following redundancy from a highly paid job I had the house informally valued and was advised around £140k. I had no choice but to become a reluctant landlord and moved in with my new partner to ensure I could rent out my home and at least get some rent to pay the mortgage. The lender was advised of the change in circumstances and have not objected or changed the mortgage terms. I have never missed a payment and with the house being in a high demand area, have been fortunate in having hardly any void periods (about 3 weeks in total). Do I have the basis for any mis-selling claims or against the 2007 valuation?

[Deleted User]

Not from what you've said.

You're very fortunate that they didn't change the mortgage terms when you started renting it out. It's probably worth sending them a quick thank you note for that alone.

Silvertabby

I'll leave the definitive answer to those more knowledgeable than me - but the date of valuation (2007) does stand out. That was just before the huge housing crash of 2008.

Have you checked to see how much similar houses in your area are now selling for? If they are also valued at £140K/£150K then you have all been very unlucky, in that your houses are taking longer than average to creep back to their pre 2008 values.

Mortgage_Adviser

OP at what point do you feel you were missold/misadvised?


The transaction was completed prior to the financial crisis and you being made redundant.


The bank would have no chrystal ball to know that the credit crunch will happen and that you will lose your job.


Did you get any lump sum on your redundancy that you could have used to reduce/repay your mortgage?

dunstonh

Mis sold mortgage and/or improper valuation

Got to Tuesday this week without someone making a daft/fake missold allegation.

The house in LS21 was valued at £200,000 which surprised both my ex and myself given we had expected £160/180k.

Thats ok then as anything above that is fine.

I had to take a 90% remortgage to spay off my ex wife.

With the higher valuation, it wouldnt have been 90% any more.

Do I have the basis for any mis-selling claims or against the 2007 valuation?

None whatsoever. The 2007 valuation changed nothing in respect of your mortgage. In fact it may have actually reduced your interest rate as lenders often have tiered rates based on lower loan to valuations.

House prices go down as well as up and a simple mortgage valuation is the benefit of the lender. Not you. It will have set criteria and is only an opinion.

There is absolutely no misselling here. I cant even see how you could even think it could be.

minimike2

I think the OP is saying he "had" to borrow 90% of the valuation in order to pay off the ex.

Anyway, regardless, you mortgage was not mis-sold.

If you think your valuer, who you appointed independently to value the house to come to a figure which you would both agree on to buy out your partner, has been negligent, then you need to take this up with them...... You did come to the sum based on an independent valuation right? Because a mortgage valuation is just that.... for mortgage purposes only.

So if you are saying you used a mortgage valuation as the basis to agree a settlement and now wish to challenge this, then you have no recourse, as this is not the purpose that these reports are done for.

flatcoat

I am asking a fair question so if you can only make snide comments please keep them to yourself. I hope non of you has ever been through unwanted divorce and redundancy at the same time, you might have some idea how difficult it can be to keep ones wits together. For what its anyones business My redundancy pay off was used to live from for the 18 months I was without a job and only basic JSA for the first 6 months. I got nothing after that.

(For background There was a valuation issue in and around Leeds after the crash and following investigations a number of valuers and agents ended up in court and some in jail. The reason? For deliberately overvaluing properties to keep the sales to investors going. The resultant crash brought down a number of housebuilders who had been buying land and selling homes through the agents involved and ended up in so much debt they folded).

However The agreement with my ex was based on a percentage of the valuation so had the valuation been at £160k the loan would still have been at 90% (of £160k). This issue and question was prompted by a local property investor I know who believes my home was significantly overvalued at the time of that valuation in 2007 - and my gut feeling figure at the time was about right and £200k - even with the mad market conditions of 2007 - was whistling in the wind. The area is a sought after area with good values for Yorkshire, driven in part by good schools and attractive location. Typical property prices locally have recovered to pre-crash values and a bit more besides - probably around 110% of typical 2007 values. This is not something i would have even considered pursuing or asking but given banks have not exactly been noted for there honest dealings in the past 10-15 years and keep losing cases where they have stitched up borrowers I can ask a legitimate question. So, unless you are a financial claims case law expert please keep your thoughts an comments to yourself. No more amatuers.

Pixie5740

flatcoat wrote: »

I am asking a fair question so if you can only make snide comments please keep them to yourself. I hope non of you has ever been through unwanted divorce and redundancy at the same time, you might have some idea how difficult it can be to keep ones wits together. For what its anyones business My redundancy pay off was used to live from for the 18 months I was without a job and only basic JSA for the first 6 months. I got nothing after that.

(For background There was a valuation issue in and around Leeds after the crash and following investigations a number of valuers and agents ended up in court and some in jail. The reason? For deliberately overvaluing properties to keep the sales to investors going. The resultant crash brought down a number of housebuilders who had been buying land and selling homes through the agents involved and ended up in so much debt they folded).

However The agreement with my ex was based on a percentage of the valuation so had the valuation been at £160k the loan would still have been at 90% (of £160k). This issue and question was prompted by a local property investor I know who believes my home was significantly overvalued at the time of that valuation in 2007 - and my gut feeling figure at the time was about right and £200k - even with the mad market conditions of 2007 - was whistling in the wind. The area is a sought after area with good values for Yorkshire, driven in part by good schools and attractive location. Typical property prices locally have recovered to pre-crash values and a bit more besides - probably around 110% of typical 2007 values. This is not something i would have even considered pursuing or asking but given banks have not exactly been noted for there honest dealings in the past 10-15 years and keep losing cases where they have stitched up borrowers I can ask a legitimate question. So, unless you are a financial claims case law expert please keep your thoughts an comments to yourself. No more amatuers.

You are asking for advice on Money Saving Expert which is a public forum so people from all walks of life can post a reply. For the record I am no legal expert but I would think a good starter for ten would be to look at sold prices for similar properties in your street or neighbouring streets during that time period. Based on those figures rather than the gut feeling of some property developer friend does £200k look like a reasonable valuation for that time period?

However, If it's specifically advice from a legal expert, i.e solicitor, who specialises in financial cases that you want then go and make an appointment with one.

dunstonh

However The agreement with my ex was based on a percentage of the valuation so had the valuation been at £160k the loan would still have been at 90% (of £160k)

So, given the importance of this figure, what did the independent surveyor you employed say?
I assume you didn't employ an independent surveyor and relied on a mortgage valuation which has totally different criteria.

Seeing as you had to pay more out based on that valuation, what did you do about it at the time?

This issue and question was prompted by a local property investor I know who believes my home was significantly overvalued at the time of that valuation in 2007 - and my gut feeling figure at the time was about right and £200k - even with the mad market conditions of 2007 - was whistling in the wind.

The general rule of thumb is to allow around a 15% tolerance. So, a £200k valuation could be £170k in reality. That places it exactly where you thought it would be.

A mortgage valuation would have had lender criteria based on a rising market. Mortgage valuations usually overstate in rising markets and understate in falling markets.

However, as the valuer is employed by the lender, the duty of care is to the lender and, as I have said, it is a valuation based on criteria. Not the same thing as you would use to value the property. If you had paid for a homebuyers survey or a full survey then it becomes your thing.

So, unless you are a financial claims case law expert please keep your thoughts an comments to yourself. No more amatuers.

You better stop posting then.

bigisi

flatcoat wrote: »

So, unless you are a financial claims case law expert please keep your thoughts an comments to yourself. No more amatuers.

You pay for that sort of expertise. On a forum you don't get the luxury of specifying who can reply and who can't.

minimike2

flatcoat wrote: »

I am asking a fair question so if you can only make snide comments please keep them to yourself.

You will only get honesty on here. We attract "was I mis-sold X" threads on a regular basis and in the vast majority of cases it is people who made bad decisions looking to jump on the bandwagon in order to cash in. I am afraid you case is no exception. You failed to protect your interests by having the property valued by at least one independent valuer (rule of thumb in situations like this is at least two, if not three, and use the average). People usually dont do this to save the £300 or so it would have costed, but in the long run it usually ends up being a more costly mistake.

flatcoat wrote: »

However The agreement with my ex was based on a percentage of the valuation so had the valuation been at £160k the loan would still have been at 90% (of £160k).

My post further up shows this is as I had suspected, but as above, you have relied on a valuation for mortgage purposes, which is something totally different to having an independent valuation.

flatcoat wrote: »

So, unless you are a financial claims case law expert please keep your thoughts an com
ments to yourself. No more amatuers.

Good luck getting someone of that nature replying to you on here.
This is more of a case for ambulance chaser types. However they are likely to take on your case for an upfront non-refundable fee which will then put you further out of pocket. There are many people who help in here who are either in the industry, or have been, and currently the responses you have had are the logical ones, despite not being what you want to hear due to your emotional engagement with the situation. We don't have that, so can see the logic more easily.

In short, I'll repeat from earlier - The only way this is "a case" is if you can prove negligence of an independent valuer who was instructed to give a property valuation which was not conducted for mortgage purposes.