Mis-sold Mortgage advice

JaynyB

Hi everyone. This is my first post, but I have been hanging around these forums for a while for all sorts of things. I’m posting today to ask for opinion on whether I may have a basis for claiming for a mis-sold mortgage. I have read many posts on here about the subject but none of them fit my case. It’s a bit long winded sorry.

In July 2003 me and my partner took out a mortgage with the Bank of Scotland for £33,969. This was for 25 years at a fixed rate of 5.3% for three years and our monthly payments were £204.56. I mistakenly believed that our fixed rate ended in June 2005 and in April 2005 started looking around for a better deal. I contacted TML Financial Services by phone after seeing an advert on the television and asked them what they could do for us. They took all the details of our property, current mortgage and outstanding unsecured debt and told me they had a mortgage to suit us that we were eligible for. We were then visited by an advisor.

Whilst I was getting all the paperwork together I realised our fixed rate with BOS didn’t finish until June 2006. When the advisor arrived we told him we had made a mistake and we were still in a fixed rate. The advisor sat down with us and told us that he recommended that we remortgage early, and consolidate our unsecured debts, with a lender called Kensington Mortgages. He told us that we wouldn’t be charged to leave BOS and that although the rate with KM was slightly higher, it would work out better in the long run as we wouldn’t have any unsecured debt and the consolidated monthly payment would be lower. He had a mortgage offer with him, despite me only having given minimal details over the phone, and completed a further application form while he was there.

The new mortgage was for £54,705. Our combined salary at this point was £30k. This was over 20 years at a rate of 6.4% fixed for three years and the monthly payments were £420.41. He told us that by taking a 20 year mortgage we were saving 3 years of interest and payments, and that once the fixed rate was finished we could apply for another lower fixed rate with KM.(This turned out to be a lie)

There was also an arrangement fee of £2180 added to this, making the total borrowed £56,885. The way it was explained to us was that there was no penalty to leave BOS, the rate, although higher, worked out cheaper in the long run, and that we could get a better rate with KM once the fixed period ran out. We were told that as the housing market was rising at that time, lenders were raising their rates because so many people wanted to buy. Therefore, if we left it another year we might not get a good rate.! It was made to sound like it really was the best course of action at that time. To my eternal dismay, we agreed to this and our mortgage started in May 2005.

At no time did the advisor make clear to us that TML was actually part of KM and that the advice we were receiving was not impartial. I believed they were a broker when I contacted them. The way the advisor spoke he had “found” this mortgage for us. In fact, we were told the arrangement fee was the broker’s payment for finding the mortgage. I have only become aware of this very recently when I inadvertently came across a post from 2009 on this very forum stating that TML and Kensington were one and the same. I then started to research mis-sold mortgages as I have always thought the “broker” from TML gave us bad advice but assumed that was just our bad luck and inexperience and there was no recourse for stupidity !!

And contrary to what the advisor told us, we were charged four months interest by Bank of Scotland for leaving our fixed deal early.

At no time were we told that KM was a sub-prime lender. We didn’t even know what one of those was, and didn’t become aware of this until the end of 2006 when we tried to get a loan. At no stage did the advisor tell us this was a specialist mortgage. At that time we had a good credit rating. Our mortgage lender was BOS, and the debt we consolidated was with HSBC and Halifax. We had no CCJ’s or defaults.

Having researched mis-sold mortgages I feel we were mis-sold this mortgage on the following basis:

We were not told that TML were part of Kensington and therefore, not impartial. They presented themselves to us a broker.

We were encouraged to leave a lower rate, fixed rate deal with a high street lender

We were encouraged to consolidate low rate, unsecured borrowing

We were sold a sub prime mortgage that we did not need

I have all the original documents from the advisors visit and a copy of the application form where he has ticked “no” to 15 questions asking if we have defaults, CCJ’s etc.

Being with Kensington has caused us untold problems, which I won’t bore you all with, but suffice to say it put us in a very bad position.

I’m not one to jump on mis-selling bandwagons, and wouldn’t dream of complaining if I didn’t think I had a valid case, which is why I’m asking you good people what you think ? I understand TML went bust and this would have to be pursued through the FSCS.

Any opinions would be great.

[Deleted User]

The only possible complaint you may have is if they were deliberately mis leading about their broker status. If it was more a case of you misunderstanding, you have no case.

It doesn't matter whether you categorise a lender as prime, sub prime, near prime or anything else. Its still just a mortgage with a defined rate.

Whether consolidation was the right move for you depends on your circumstances and the decision you made based on that.

It sounds as if you were not not mis sold, but may have mis bought.

JaynyB

Thank you. The advisor told us he had found a mortgage for us with a lender called Kensington. It’s a long time ago but I remember that. At no stage did he tell us they only dealt with that companies mortgage. None of the paperwork references Kensington and looks like it came from a broker.

Let_Us_See

Have you retained the adviser's Suitability Letter (possibly 'Reasons Why Letter' back in 2003) as this document should confirm the reason for recommending the Kensington mortgage?

JaynyB

No I don’t have that. I do have a key facts document that says TML Financial DID NOT recommend a particular mortgage to us, and that we chose it ourselves.

ACG

The biggest issue is probably the date of this mortgage. It is pre-regulation.

You could complain to the mortgage broker directly and see if there would be any goodwill gesture but with probably limited paperwork and how old the mortgage is, I think you probably just need to put it down to experience.

For the record, whenever I read these types of posts I rarely think they are miss sold but if what you have said is true, it sounds like it is an absolute miss sale - but I dont think you will get anywhere.

JaynyB

Thanks for the reply. The Kensington mortgage was sold to us in May 2005 which I believe is after the regulations came in ? My original mortgage that we were encouraged to leave was in 2003. I put the details of that one in to give some back story. Sorry if that’s not clear.

SonOf

The new mortgage was for £54,705. Our combined salary at this point was £30k. This was over 20 years at a rate of 6.4% fixed for three years and the monthly payments were £420.41. He told us that by taking a 20 year mortgage we were saving 3 years of interest and payments, and that once the fixed rate was finished we could apply for another lower fixed rate with KM.(This turned out to be a lie)

It wasnt a lie. It was correct at the time.

We were told that as the housing market was rising at that time, lenders were raising their rates because so many people wanted to buy. Therefore, if we left it another year we might not get a good rate.! It was made to sound like it really was the best course of action at that time. To my eternal dismay, we agreed to this and our mortgage started in May 2005.

At that time, rates were rising and expected to continue.

At no time did the advisor make clear to us that TML was actually part of KM and that the advice we were receiving was not impartial.

TML was owned by Kensington but they were not single tied to Kensington. They did arrange mortgages with other lenders as well.

No I don’t have that. I do have a key facts document that says TML Financial DID NOT recommend a particular mortgage to us, and that we chose it ourselves.

This is the sticking point. Non-advised sales do not get the consumer protection of advised sales. If they did not give advice, you cannot complain about advice.

ACG

Sorry, I scanned over everything.
You are right, it would be regulated.

Fire in a complaint to them.

JaynyB

Thank you. I think I will.

SonOf

JaynyB wrote: »

Thank you. I think I will.

You should do as the FOS have been overruling non-advised cases where it appears there is the hint of advice and classing them as advised cases. Advised cases have a higher requirement and if this was treated as an advised case, it would be highly flawed based on what you have told us.