Mortgage mis-selling in 2003

pauper79

Hello all


Hoping someone will be able to point me in the right direction.


I recently went through my late father's paperwork to see if there were any PPI claims to be made before the deadline. This was for the benefit of his widow / my mum. I found a couple, and claimed.


I also found pretty clear evidence of a mis-sold mortgage in April 2003. It was sold by iGroup Mortgages (who later became GE Money). The broker is variously described in the paperwork as Purple Loans, Midland & General Mortgages and iGroup. It is clear they were all part of iGroup at the time. The mortgage is still being paid (by me!)



I complained to GE Money on 5 separate grounds. They have written back and said: on points 1-4, we were only the mortgage provider and we have no documents. The loan was sold by Midland & General. They're no longer trading. Speak to the administrators. On point 5, the loan now belongs to Kensington Mortgage Company, so we've forwarded your complaint to them. Basically: nothing to do with us. Also they say I can't complain to FOS because it's prior to 1 April 2014.


So my questions are:


1. Why has the 5th ground received special treatment? (This was that affordability in retirement was not discussed; affordability on death of a spouse was not discussed; and no affordability check seems to have been carried out at all).


2. Is it right that FOS has no jurisdiction? I know about the 15 year legal longstop but I was hoping that either they would do the right thing (I know, I know...) or I could get it to FOS.


Thank you in advance! This is not technical mis-sale: my parents are not financially sophosticated and they were clearly stitched up, which makes me determined to exhaust all avenues.

SonOf

1. Why has the 5th ground received special treatment? (This was that affordability in retirement was not discussed; affordability on death of a spouse was not discussed; and no affordability check seems to have been carried out at all).

The seller is responsible for anything that relates to the sale. Not the lender. The lender is only responsible for things that are within their remit. So, they can eliminate any issues that are nothing to do with them.

2. Is it right that FOS has no jurisdiction? I know about the 15 year legal longstop but I was hoping that either they would do the right thing (I know, I know...) or I could get it to FOS.

There is no long stop with financial services consumer protection. That only applies to the courts. However, you have no access to the FOS on two counts. 1) the firm that sold it no longer exists. The FOS can only get involved where the firm still exists. 2) Mortgage regulation didnt start until October 2004. So, this is pre-regulation.

The FSCS cannot accept it either as its pre-regulation

It should be noted that the vast majority of mortgage missale allegations fail. Less than 1 in 10 succeed. Even then, of those that succeed, a high number result in no redress because the capital gain in the property is taken into account in the redress.

antrobus

pauper79 wrote: »

....

So my questions are:

1. Why has the 5th ground received special treatment? (This was that affordability in retirement was not discussed; affordability on death of a spouse was not discussed; and no affordability check seems to have been carried out at all).
.....

Mortgage affordability checks only started in 2014. There was no requirement for such checks in 2003. Daen it, at that time you could get self-cert mortgages.

As to the 5th ground; it may well be that FCA regs require the current lender to contact the borrower regarding their plans for repayment of the principle.

haras_nosirrah

With affordability on death of a spouse - did your father have any life policies as this is generally what they are designed to take care of?

Similarly with retirement how old did it take your parents to and what was their plan to clear the mortgage on retirement (e.g. downsizing)

Was this the purchase of a new property or was it a remortgage? If a purchase why did they stretch themselves that much if it meant they had to go into retirement. Could they not have bought a cheaper property?

pauper79

Thanks all.

I can see that FSA did not take over mortgage regulation until 2004, so not within FOS compulsory jurisdiction (because firm not regulated) but possibly the firm was under FOS voluntary jurisdiction at the time? Although I guess that is a long shot.

And I didn't know about FSCS but it looks like they can't act unless the firm was FCA regulated.

So unless anyone has any bright ideas, I think that rules out any form of redress at all.

Antrobus thanks for suggestion on 5th ground, seems it is just going to lead to more enquiries and no actual compensation.

How frustrating.

[Deleted User]

pauper79 wrote: »

possibly the firm was under FOS voluntary jurisdiction at the time?

FOS cannot adjudicate on complaints about firms which are no longer trading.

pauper79 wrote: »

I think that rules out any form of redress at all.

Yes.

pauper79 wrote: »

How frustrating

Understand that, unlike with PPI, there is no mortgage mis-selling scandal. Also appreciate that, while regulation put a stop to many of the issues you raised in your complaint, the measures taken since 2004 cannot be applied retrospectively.

Finally, as Son Of already said, only around 1 in 10 mortgage mis-selling complaints succeed (and there are not that many in the first place).

pauper79

Re no longer trading: the corporate vehicle in question may have been dissolved but the parent companies are still going, so I am interested in whether they can use clever re-structuring to evade liability for mis-sales. Probably yes, but I will continue to look into it.

There actually was a mortgage mis-selling scandal affecting many sales from this period (endowment mortgages). Along with lots of other issues such as PPI. So the industry was not squeaky clean. The fact that not many complaints succeed is no reason to try to deter people from exhausting all avenues, where customers were clearly being exploited in the period just before regulation (as my parents were here).

[Deleted User]

pauper79 wrote: »

There actually was a mortgage mis-selling scandal affecting many sales from this period (endowment mortgages). Along with lots of other issues such as PPI.

You didn't have an endowment and PPI is irrelevant to what I said earlier.

Good luck pursuing this any further, but I think you'll find you've already exhausted all avenues available to you.

SonOf

Re no longer trading: the corporate vehicle in question may have been dissolved but the parent companies are still going, so I am interested in whether they can use clever re-structuring to evade liability for mis-sales. Probably yes, but I will continue to look into it.

Depends on the structuring of the company. However, as this was a 2003 case it doesnt matter as its pre-regulation. The FOS and FSCS would have no remit on a pre-regulation case irrespective of the status of the company or its parent.

There actually was a mortgage mis-selling scandal affecting many sales from this period (endowment mortgages).

Not really. You are talking about 2003. By that time, there was only one mainstream provider of endowments left and they ceased to offer them in 2004. Whilst endowments were a big issue at the time, the actual uphold rates overall were quite low with many companies. Often just around 25%.

Along with lots of other issues such as PPI.

PPI was a big issue but with mortgage PPI, it was not. Most MPPI complaints were rejected. You can still buy MPPI today.

So the industry was not squeaky clean.

No industry is.

The fact that not many complaints succeed is no reason to try to deter people from exhausting all avenues, where customers were clearly being exploited in the period just before regulation (as my parents were here).

No-one will deter anyone from doing anything. However, the fact is that you are dead in the water due to a) the company no longer exists and b) it is pre-regulation.