Miss selling

Elmatthews78

Just wondering if anyone can help. A friend of mine has a mortgage that was taking out 29 years ago by his parents. The company has changed hands on a number of occasions. His father had an endowment mortgage but was confused when he took it out, he was lead to believe that it was a mortgage with life insurance. So after3 months he cancelled the endowment side. As far as I am aware, back in the day you couldn't have an interest only mortgage. The payments are still being paid and there is still a large outstanding balance, more than the original loan.
Is there anyone who has had the same problem, if so, how did you go about sorting it out.
Surely this has been miss sold, any advice would be helpful.

ACG

This was well before regulation ever started.
Presumably there has been a mortgage statement sent out annually for at least the last 10-20 years? Would this not have confirmed the balance was not decreasing?

Im not sure there is a lot that can be done.

Has your friend spoken to the current lender?
Could your friend potentially downsize or take out equity release or make overpayments to bring the balance down?

You have not really provided any information on what the problem is or what outcome your friend wants. I have made a few assumptions based on the normal types of posts we see on here from time to time.

Thrugelmir

Elmatthews78 wrote: »

So after3 months he cancelled the endowment side.

There's no misselling if some one makes a decision yet takes no further action. 28 years of mortgage statements would have the shown the outstanding debt. Was the endowment actually cancelled to save money?

dunstonh

His father had an endowment mortgage but was confused when he took it out, he was lead to believe that it was a mortgage with life insurance.

29 years ago, it was commonplace to be mandatory to have life assurance with mortgages. The endowment policy is the life assurance.

As far as I am aware, back in the day you couldn't have an interest only mortgage.

yes you could.

Is there anyone who has had the same problem, if so, how did you go about sorting it out.
Surely this has been miss sold, any advice would be helpful.

I do not follow your logic. I cannot see how it is "surely" missold. He took out an endowment policy with an interest-only mortgage. Then three months later he cancelled the endowment. How is that action a missale?

missale is about the point of sale. He was sold the endowment he needed. He later chose to cancel it. That choice was his. Not the seller. So, it cannot be missold.

There are some inconsistencies here. 25 year mortgages or less were typical 29 years ago. You just didn't hear of longer mortgages than that. So, the fact there is still a mortgage going today suggests that some remortgaging has gone on (or its an extremely rare case of an extended term).

Also, more than what was borrowed is now outstanding then that suggests that there have been arrears at some point, or it is currently in arrears or further advances have been made (i.e. borrowing more). Usually the latter in these scenarios. perhaps adding a few thousand or so on each time it remortgaged.

I also suspect you or even the son is getting the full info. I have seen plenty of these over the years where the husband hid information from the wife to avoid conflict or embarrassment and tried to deflect the real issue and then it went on too long and the husband buried their head in the sand and eventually ended up with a mortgage to pay but no way to pay it. This has the hallmarks (i.e. extended term. Borrowing higher than original, endowment cancelled etc).

The mortgage will only be cleared by paying it off. So, that either means upping the monthly amount to pay it off by the end of the term or using savings to clear it. Or, if old enough, using equity release to clear it.

Nearlyold

A friend of mine has a mortgage that was taking out 29 years ago by his parents.

How does your friend have a mortgage that was taken out by his parents? Is this just a figure of speech and the mortgage is still in his parents name or did the friend take on a mortgage at some point.

There is no miss selling here so the mortgage is not somehow going to be magicked away. In addition to the options dunstonh mentions above, the house could be sold and the net proceeds after repaying the mortgage used to purchase a lower value property ie downsize as suggested by ACG.

Elmatthews78

Thanks for all the responses. We have been informed that you couldn't have an interest only mortgage 29 years ago. When the endowment was cancelled my friends father should have been contacted by the company to change the mortgage to a repayment mortgage and as stated earlier and confirmed by someone who dealt with mortgages back in the day, interest only mortgages were not available.

The company in question has been taken over numerous times since the initial agreement was set up.

As for his father as one response quoted 'embarrassment' with regards to his wife, this was not the case. She openly knew what he had done. Sadly neither party can speak up as they are now deceased and the debts has now been passed on to their son.

They do not get regular statements as the company who are now dealing with this case can find no way of getting a settlement amount or total payment cost together. They have been very threatening to an elderly lady and refuse to speak to my friend unless he is willing go pay the mortgage off.

Thanks for all the responses, even if some are rather judgemental with only a brief outline of the full scenario.

AnotherJoe

Elmatthews78 wrote: »

Thanks for all the responses. We have been informed that you couldn't have an interest only mortgage 29 years ago.

Thats simply wrong. An endowment mortgage is nothing more than an Interest Only mortgage and an associated endowment policy.

When the endowment was cancelled my friends father should have been contacted by the company to change the mortgage to a repayment mortgage

How would they know it was cancelled?

and as stated earlier and confirmed by someone who dealt with mortgages back in the day, interest only mortgages were not available.
Whoever that was is a liar or an idiot, since first of all as said thats what endowment mortgages were, and secondly if they were not available as this person claims, how did the parents get one??

The company in question has been taken over numerous times since the initial agreement was set up.
par for the course

As for his father as one response quoted 'embarrassment' with regards to his wife, this was not the case. She openly knew what he had done.

Does that mean they both carry the blame? Its unfortunate but the fact the son isnt getting the inheritance he thought he would doesn't mean there's automatically someone else to carry the can for that poor decision not only years back, but also in the intervening decades when they noticed the debt wasnt going down but did nothing.

Sadly neither party can speak up as they are now deceased and the debts has now been passed on to their son.
The debt hasnt been passed on to the son. Its owed by the estate (assuming the last parent to die left him the house). If the house is worth less than the mortgage he can walk away (assuming he's the executor). If its worth more as executor he can sell up and pay off the debt and walk away with the difference, or he can take out a new mortgage.

They do not get regular statements as the company who are now dealing with this case can find no way of getting a settlement amount or total payment cost together.

That seems very strange. How can they threaten someone about payments if they dont know what needs paying?
They have been very threatening to an elderly lady and refuse to speak to my friend unless he is willing to pay the mortgage off.
Who is the elderly lady? And why are they "threatening" her when according to you its the sons debt? (Not that thats possible but whatever...)

Thanks for all the responses, even if some are rather judgemental with only a brief outline of the full scenario.

I think you have been equally judgmental such as launching into misselling as a given, and not querying why the debts gone up, and why the parents did nothing to deal with the impending end of the mortgage in say the last ten our so years at least before it ended. has it ended?

Linton

Elmatthews78 wrote: »

Thanks for all the responses. We have been informed that you couldn't have an interest only mortgage 29 years ago. When the endowment was cancelled my friends father should have been contacted by the company to change the mortgage to a repayment mortgage and as stated earlier and confirmed by someone who dealt with mortgages back in the day, interest only mortgages were not available.

The company in question has been taken over numerous times since the initial agreement was set up.

As for his father as one response quoted 'embarrassment' with regards to his wife, this was not the case. She openly knew what he had done. Sadly neither party can speak up as they are now deceased and the debts has now been passed on to their son.

They do not get regular statements as the company who are now dealing with this case can find no way of getting a settlement amount or total payment cost together. They have been very threatening to an elderly lady and refuse to speak to my friend unless he is willing go pay the mortgage off.

Thanks for all the responses, even if some are rather judgemental with only a brief outline of the full scenario.

I dont think you have been correctly informed about the situation. Debts cannot be passed on after death. What would normally happen is that when husband and wife have died the house is sold and the cash used to repay the mortgage. If another family member wanted to take on the house they would have had to get a mortgage in their own name so they could buy the house, again with the mortgage company getting repaid at that point.



You say that both father and his wife have died so who is this "elderly lady"?


The only things I can think of is that perhaps the mortgage company were never told that the mortgagees had died. Or that the assets were distributed without the debts having been paid off. This would be a serious error by the executor.


But all this is speculation. Unless we have a clear story its impossible for anyone to say anything helpful.

Peelerfart

Nothing like "miss selling" title to get the board going.

Whoever she is.

Thrugelmir

Elmatthews78 wrote: »

Sadly neither party can speak up as they are now deceased and the debts has now been passed on to their son.

Care to clarify the position. As debts don't get passed on.

Is the issue that the son was expecting an inheritance only to find that there isn'tany money in the pot?

They have been very threatening to an elderly lady

How is this lady connected to the son?

antrobus

Elmatthews78 wrote: »

..... We have been informed that you couldn't have an interest only mortgage 29 years ago. When the endowment was cancelled my friends father should have been contacted by the company to change the mortgage to a repayment mortgage and as stated earlier and confirmed by someone who dealt with mortgages back in the day, interest only mortgages were not available.....

I am of the opinion that the "someone" concerned is a blithering idiot of the highest order whose advice should be ignored.

Linton wrote: »

I dont think you have been correctly informed about the situation. ....

Ditto.

Peelerfart wrote: »

Nothing like "miss selling" title to get the board going.

Whoever she is.

A ghost that stalks MSEland bringing equal measures of hope and disappointment. In the case of the OP's friend I fear it is the latter.