Mis-sold Mortgage Advice

Deanoml

Hi everyone. I believe that my mortgage was mis-sold. Can anyone suggest the best way to start a claim? there are lots of companies who seem willing to help .... but which one to choose? Thanks, Dean

TonyMMM

Why do you think it was mis-sold ?

Deanoml

I was sold the mortgage whilst I was a police officer. The company put me onto an interest only mortgage but they did not tell me that i had to have some kind of savings plan to pay off the capital. I am now a little wiser and find that I have 1400.00 to pay off in about 6 years time and nothing to pay it off with. I complained to the company who said...."as a police officer, when you retire you have a large lump sum and people usually use that to pay off their mortgage. Thats the advice I (the person who I spoke to on the phone) would have given". As it turned out I retired early on ill health grounds and received a much smaller lump sum which mostly went on paying off debts. So I think that I was badly advised.

Thrugelmir

When you took the mortgage originally you knew that the debt would have to be repaid after x years. Every year you've received a mortgage statement. Over the past few years you've received letters asking how the mortgage will be repaid. 
Unfortunately it's late in the day to say that you weren't aware. 

davidmcn

Thrugelmir said:

When you took the mortgage originally you knew that the debt would have to be repaid after x years. Every year you've received a mortgage statement. Over the past few years you've received letters asking how the mortgage will be repaid. 
Unfortunately it's late in the day to say that you weren't aware. 

The OP posted here about (presumably) the same mortgage nine years ago:
https://forums.moneysavingexpert.com/discussion/3660439

dunstonh

The company put me onto an interest only mortgage but they did not tell me that i had to have some kind of savings plan to pay off the capital.

You are not doing the stereotypical image of a police officer much good.  What part of "interest-only" did you struggle to understand was interest-only?  

If you bought the mortgage on advised basis, then they should have told you and included a warning in the documentation to take out a repayment vehicle and consequences if you didnt.  It may have even stated the plan for repayment.  Have you checked the paperwork to see if the warning is there?

there are lots of companies who seem willing to help

But very few successes (the uphold rate has dropped into single digits).  The companies out there have other ways to make money from your data.

I am now a little wiser and find that I have 1400.00 to pay off in about 6 years time and nothing to pay it off with.

Since 2008, lenders have been issuing annual letters (usually with the statement but some have also done additional letters and checks) reminding people with interest only mortgages that they are only paying the interest and will need to find the capital to repay the mortgage when the term ends.    So, why have you been ignoring these?

These letters exist not just to inform you but also to prevent future complaints from people saying they didnt know what interest only meant.   Timebar rules allow firms to bar you from a complaint if the sale took place more than 6 years ago and more than 3 years from you being reasonably aware of an issue.   These warnings on the statements/letters start the 3 year clock ticking.

The OP posted here about (presumably) the same mortgage nine years ago:
https://forums.moneysavingexpert.com/discussion/3660439

So, it really has been a case of ignoring it. 

I complained to the company who said...."as a police officer, when you retire you have a large lump sum and people usually use that to pay off their mortgage. Thats the advice I (the person who I spoke to on the phone) would have given". As it turned out I retired early on ill health grounds and received a much smaller lump sum which mostly went on paying off debts. So I think that I was badly advised.

You had 6 months from receiving that complaint response to go to the FOS.   If that 6 months has passed, then its game over.  However, your complaint reason is weak.   Interest only mortgage complaints mostly fail.  However, where they do succeed, it is usual to compare the property value it is today against what it was when you bought it.  The gain in property value is taken into account and will reduce the redress.  Indeed, a recent upheld decision said that the person had to sell the house at market value within 12 months and only if there was a loss on the original price would redress be payable.

Taking a mortgage out is not risk free.    There are insurances available to cover scenarios, such as ill health.  If you fail to take out the insurance, then you are responsible for the consequences.

Life can be cruel at times but that does not mean other people become responsible.  I very much doubt you didn't know what interest only meant.  I suspect you chose not to have any insurances to save money.     The risks given in the offer letter and the closure letter exist for good reason.  They are not to be ignored.  However, if you choose to dismiss those risks then it is you that is responsible if a risk event occurs.

haras_n0sirrah

while I appreciate your situation you also need to consider that had you been on repayment your mortgage payment would have been considerably higher than on interest only. If you could not afford an interest only mortgage how would you have afforded a repayment mortgage?
You have known it was interest only for a long time (at least 9 years ago) - as advised at the time the only option was to overpay to get out of negative equity - your partner working full time if need be. Did she do this?
As it is you have been renting the property all this time. Hopefully the property has gone up in value especially since 2011. The time will come in the future where you need to move. 

Deanoml

Thank you all for your replies especially dunstonh who appears to have a rather black and white outlook on life. "Stereotypical Police officer" Hmm.... so you base you judgements and advice on stereotypes. Enough said really. Sadly we are not all gifted with financial savvy and people, even police officers, do make mistakes. You have no idea about me or my personal circumstances either now or at the time and yet you choose to makes assumption about me. Never mind. I wonder if you have the same opinion about those people who were mis-sold PPI. After all, the terms and conditions are laid out in the paperwork. I get it. Its my fault. I'm not arguing with that. So thank you all including dunstonh and your verbose fingerpointing.

Deanoml

Thanks haras_n0sirrah. The situation was complicated at the time and i appreciate that I should have taken action at the time. My mortgage adviser put me onto the interest free option to save money as it was cheaper then the repayment. Anyway I was just looking for a bit of advice re possible mis-selling as several people said I might have a claim. Thanks again.

haras_n0sirrah

I don't think it was your fault. Unfortunately you had a change in circumstances which led to what would probably have been a reasonable way of clearing the mortgage in 2006 (a lump sum from a very good pension) to that no longer being an option. In 2006 the rules around interest only are not as strict as they are now. Unfortunately not doing anything 9 years ago when you realised it was a problem has not helped matters as now we are further along with less time to do anything about it.
Had your payments been £300 a month more than they are now you possibly would have lost the house years ago. As it is the market has increased in the last 9 years so by holding onto your interest only mortgage you hopefully now have some equity which you will be able to use in the future be it buying again (a shared ownership property with your share in cash?) or renting.

Bossypants

I sympathise but I struggle to see how you'd have a claim here. It sounds like the person who sold you the mortgage gave you reasonable advice based on your circumstances at the time. It would be a bit like a person who is sold a capital repayment mortgage which was affordable based on their salary at the time claiming for misselling because their salary has since dropped for whatever reason. The mortgage adviser isn't expected to have a crystal ball, and it was on you to seek new advice when your circumstances changed.

Consider, though, that six years is quite a long time to have to find a solution. If finding the money is impossible, with luck you'll be able to ride out whatever the Corona fallout is and sell with a bit of equity, to give you a leg up in whatever you do next (i.e. buy a cheaper place or rent).