Interest only mortgages . mis -sold

val_dawber

Has any one claimed against a mis sold interest only mortgage?

Is it easy to do it yourself or do you need to use a company for this?

ViolaLass

You don't need a company but you're going to need a very good case.

SpiderLegs

val_dawber wrote: »

Has any one claimed against a mis sold interest only mortgage?

Is it easy to do it yourself or do you need to use a company for this?

It’s very easy to do so no need to use a company at all.
Doing it yourself means no fees to be paid and you will receive all of the compensation.

One small point though, what are you expecting to claim for?

AnotherJoe

val_dawber wrote: »

Has any one claimed against a mis sold interest only mortgage?

Is it easy to do it yourself or do you need to use a company for this?

Easy to do yourself. Bear in mind, if you lose, then your house will be repossessed and the equity made since purchase repaid to the lender, with an additional fine of the difference between all the rent you would have paid and the lower IO mortgage.
You will also be barred from any further house's purchases on account of obviously not being able to manage your own finances.























Only joking but I wish.

muhandis

I don't think there is a straightforward answer to your question. It would of course depend upon why you consider that it was mis-sold and how confident you are of making that case.

It might help to look at these case studies about interest only mis-selling on the Financial Ombudsman website https://www.financial-ombudsman.org.uk/publications/technical_notes/interest-only-mortgage-case-studies.html

These cover a wide range of real world scenarios and some of them might be similar to your situation.

In your place, I would consider getting in touch with a no win no fee claim firm only to get a free review to see if there is any merit in my case and then handle it myself. I have done this in the past for a mis-sold insurance policy and had the Ombudsman rule in my favour eventually.

However, keep in mind that firms will (understandably) fight tooth and nail against potentially large claims and try to constantly fob you off, so you need to be fairly persistent and be confident about making a case and staying on it.

val_dawber wrote: »

Has any one claimed against a mis sold interest only mortgage?

Is it easy to do it yourself or do you need to use a company for this?

dunstonh

Has any one claimed against a mis sold interest only mortgage?

Yes loads. However, I suspect you mean has anyone succeeded and that is a different answer. Indeed, the FSCS have become so frustrated with speculative interest-only mortgage complaints it has started referring claims companies to the FCA and it published in its recent report that it is rejecting far more than the historical average (the uphold rate is usually around 11% - i.e. 9 out of 10 fail).

Is it easy to do it yourself or do you need to use a company for this?

You havent said what your complaint reasons are. So, its difficult to comment.

For example, if this is a pre-credit crunch arranged mortgage then you nearly always get an auto-rejection as the FOS have said that interest only mortgages were a viable product under FCA regulation at that time.

If its pre-October 2004 then you may as well forget it as that makes it pre-regulation.

Even if the complaint is one of the small number upheld, the FOS position is to include the gain in the property value. For example, in a complaint they recently upheld, they said that the only way the person would get redress is if they sold their house in the next 12 months at market value and the amount they got for it was less than what they paid for it 10 years earlier. in most areas of the country, house prices have risen a lot in that time. So, it was an upheld decision but not one the person complaining will ever see any money on.

foxy-stoat

val_dawber wrote: »

Has any one claimed against a mis sold interest only mortgage?

Is it easy to do it yourself or do you need to use a company for this?

Cut to the chase - how much are you after?

Did you mis-buy, no repayment vehicle?

muhandis

dunstonh wrote: »

If its pre-October 2004 then you may as well forget it as that makes it pre-regulation.

Hi dunstonh, genuine question, if what you have said is correct, why would the FOS consider the case below -

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case study 1
Mr A took out an interest only mortgage in 2001 - and complained in 2014 that he didn't have a way of repaying it.

The lender argued that Mr A’s mortgage was suitable - and when he contacted us, they said we couldn’t consider his complaint under the “DISP” rules. They said Mr A had taken out his mortgage more than six years ago - and that, due to the paperwork he’d been sent, he should have reasonably known more than three years ago that he had cause to complain.

We considered the information that Mr A had received about his mortgage over the years. We didn’t find anything that could have prompted Mr A to realise there his interest-only mortgage wasn't suitable for him. So we decided we could look into his complaint.

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dunstonh wrote: »

For example, in a complaint they recently upheld, they said that the only way the person would get redress is if they sold their house in the next 12 months at market value and the amount they got for it was less than what they paid for it 10 years earlier.

That's just one example. Here's another with a different result where the broker was asked to refund the costs of setting up and ending the mortgage and paying off negative equity if the house was sold over the next 12 months. Plenty of newbuild properties bought over the last decade now in negative equity.

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case study 4
After visiting a new housing development, Miss E and Mr F were advised by the onsite broker to take out a ten-year interest-only mortgage. Miss E’s father later complained that the couple hadn’t understood what they were signing up to. He said they’d tried to sell their flat, but the market value was lower than the mortgage balance.

At the time Miss E and Mr F took out the mortgage, they’d both been in low-waged jobs. Miss E, who had learning difficulties, had been living with her parents and Mr F had been renting. In our view, they couldn’t have afforded to save towards repaying their mortgage - and from what we saw, the broker hadn’t done enough to explain the consequences of having an interest-only mortgage. It didn’t seem the couple could have afforded any type of mortgage that would have enabled them to buy a property in that area.

We told the broker to refund the costs of setting up and ending the mortgage. And we said that if Miss E and Mr F sold their property for its market value with a year, the broker should pay the difference between the selling price and the balance of the mortgage.

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dunstonh

Hi dunstonh, genuine question, if what you have said is correct, why would the FOS consider the case below -

It is on very limited information but this appears to be a case with the lender, not a broker. And the lender was not refusing it on the basis of pre-regulation but on DISP (the 3 and 6 year rule). The FOS, in this case, are not happy that the rule has been met and that they will therefore consider it. It doesn't mean it went on to succeed or get rejected on pre-regulation or another reason. The next action by the lender could have been to respond that it was pre-regulation non-advised.

Some lenders have committed to consider pre-regulation complaints on advised mortgages. Although most lenders didnt sell their mortgages on advised basis. Brokers nearly always are on advised basis. So, with them, the October 2004 always applies.

That's just one example. Here's another with a different result where the broker was asked to refund the costs of setting up and ending the mortgage and paying off negative equity if the house was sold over the next 12 months. Plenty of newbuild houses bought over the last few years now in negative equity.

That is the same complaint outcome but in a negative equity scenario. Indeed, it is becoming the most common outcome on an upheld complaint. Mainly as it prevents speculative try-it-ons from gaining financially but protects those that have been genuinely missold.

New builds do typically lose value in the early years. However, you need to remember that you are looking at new interest-only mortgages taken out before 2008. That is 11 years ago. Apart from some places in Wales and NI, most of the rest of the country would have gained equity in that period.

There is also potential fraud going on with claims companies with regards to mortgage complaints. Some are crowdfunding for investors in litigation and they need large numbers of potential complaints to get more people to invest. So, they generate complaints which have no validity but it allows them to say xx,xxx have started claims (rather than say xx,xxx have had success). When the complaints fail and the investors lose money and try and pull out and no new money is coming in, the scheme collapses. In the meantime, the directors have siphoned off hundreds of thousands of pounds. Other methods include selling packs of claims to solicitors as a bulk package. Although most solicitors have got wise to this now. Although only after losing money on them. (processes simplified to keep the post short)

The problem is that you have CMCs generating complaints and both the FOS and the FSCS have said that they are not happy with those and are rejecting the vast majority. However, within those, there will be genuine complaints. The OP of this thread has said nothing about their complaint yet. We don't know if its a try-it-on or a genuine missale or pre-regulation advised or non-advised or whatever. We have a couple of lines of text and with no filtering yet possible, the odds are low. If the OP returns and provides more information, then that may well change.

muhandis

Thanks for the reply dunstonh, my point was that there are nuances to what you said.

I don't disagree with there being lots of cases being "try-ons" and the existence of unscrupulous claim firms . There will undoubtedly be lots of cases that are genuine and even more cases of mis-selling which go unreported.

A search of the upheld Ombudsman decisions clearly shows that there is no black and white answer to what is a "clear" case or not of mis-selling interest only mortgages. Plenty of decisions showing that the FOS takes a very strict view of how the advisor has assessed the suitability of the repayment vehicle, whether they would have been eligible for a repayment mortgage, how the broker/lender handled the complaint, whether there are sufficient records to show that the advice was correct, etc.

dunstonh wrote: »