Mortgage insurance reclaim

Hollybush56

Can anyone help with this enquiry? We took out a mortgage in 1989 and then arranged additional borrowing in 1993 and the building society advised that the borrowing would have a Mortgage Indemnity Insurance policy attached to it and this would be added to our mortgage.
In 1996, we requested further borrowing and again the building society attached a Mortgage Indemnity Insurance policy to the mortgage, despite one already being in place to cover the mortgage/property.
Should the policy in 1996 have been put in place, bearing in mind that in the event of an insurance claim, the insurer would only have paid out once as there was only one property being insured?

[Deleted User]

Hollybush56 wrote: »

In 1996, we requested further borrowing and again the building society attached a Mortgage Indemnity Insurance policy to the mortgage, despite one already being in place to cover the mortgage/property.
Should the policy in 1996 have been put in place, bearing in mind that in the event of an insurance claim, the insurer would only have paid out once as there was only one property being insured?

The new MIG policy covered the new Agreement for additional borrowing and superseded the old policy. MIG covered the borrowing you made, not the property.
Nothing you've described indicates any wrong-doing by the Building Society I'm afraid.

In addition, Mortgage Indemnity Guarantee protected the lender (not you) in the event you defaulted on the mortgage. It was a required condition where there was a high borrowing against deposit ratio and covered repossessions in which the amount recovered was less than the outstanding mortgage. If you didn't want to pay the MIG (twice) you should have sought lending sources other than adding more borrowing to your existing mortgage.

SonOf

Can anyone help with this enquiry? We took out a mortgage in 1989 and then arranged additional borrowing in 1993 and the building society advised that the borrowing would have a Mortgage Indemnity Insurance policy attached to it and this would be added to our mortgage.

All quite normal and correct.

In 1996, we requested further borrowing and again the building society attached a Mortgage Indemnity Insurance policy to the mortgage, despite one already being in place to cover the mortgage/property.

You misundertand. It is the amount being borrowed. The first one covered the first amount being borrowed. The second one covered the additional amount.

MIG was a percentage of the amount borrowed.

Should the policy in 1996 have been put in place, bearing in mind that in the event of an insurance claim, the insurer would only have paid out once as there was only one property being insured?

Yes it should.
no wrongdoing here.

Birkin_1

Hi
I'm new to posting so I apologise in advance if I do anything wrong!
I had a mortgage that was redeemed in 2003 an attempt was made in 2013 to see if I had PPI, the lender had purged my file due to the amount of time lapse and I couldn't find any paperwork. I did however have my redemption statement which itemised all relevant transactions including creditors insurance, I sent a copy of this to the lender who sent back rejecting my claim. I contacted the FSA who spoke to the lender and contacted me to say that as the lender didn't have any evidence they wouldn't proceed, I didn't pursue any further. Has anyone had any similar situations? I am wondering whether to start a new claim.

[Deleted User]

No. You've been rejected and don't appear to have any new evidence for your complaint.

SonOf

I had a mortgage that was redeemed in 2003 an attempt was made in 2013 to see if I had PPI, the lender had purged my file due to the amount of time lapse and I couldn't find any paperwork.

Not unreasonable and matches the recommendations of the regulator to comply with the data protection act.

I did however have my redemption statement which itemised all relevant transactions including creditors insurance, I sent a copy of this to the lender who sent back rejecting my claim

What is creditors insurance? That doesn't sound like PPI. Was it MIG?

I contacted the FSA who spoke to the lender and contacted me to say that as the lender didn't have any evidence they wouldn't proceed, I didn't pursue any further.

The FSA (as it was then - now FCA) did not handle consumer complaints. All they would do is forward it on to the bank and ask for an acknowledgement.

Has anyone had any similar situations?

plenty

am wondering whether to start a new claim.

Do you have new evidence showing you paid PPI? The bank can refuse to consider your complaint and refer you back to the original decision without investigation.

Birkin_1

The creditor insurance was the vehicle for paying off the morgage in the case of unemployment/sickness. The redemption statement issued by the lender is the only evidence I have that lists the insurance.

SonOf

Birkin_1 wrote: »

The creditor insurance was the vehicle for paying off the morgage in the case of unemployment/sickness. The redemption statement issued by the lender is the only evidence I have that lists the insurance.

Who is the lender?
The term "creditors insurance" is not a generic term and its not a marketing name I recognise.

Also, no mainstream mortgage lender in the UK has ever front loaded PPI on a mortgage. They only ever did monthly premium MPPI. (A small number of brokers front-loaded insurance onto the debt but the lender has no liability on those)

So, who is this lender?

Birkin_1

The lender was Chelsea Building Society, now Yorkshire Building Society, and the interest was calculated and adjusted annually.

SonOf

Did you use the lender to arrange the mortgage or an estate agent, adviser or broker? Chelsea did more through brokers than they did their branches.

I just checked and Chelsea building society only did monthly premium MPPI. So, its a mystery to see why there should be any entry on a redemption statement as monthly premium is effectively pay as you go. You dont get a refund and you dont have to pay anything other than that monthly.