Feel Ripped Off by Mortgage

MWT

It still feels like there should be some sort of solution if you wish to keep your current house, between stair casing to reduce the equity loan over the remaining period of the mortgage, possibly taking a lump sum from your pension (but do understand the impact that will have on the level of your pension payments in retirement) and possible equity release just before the end of the mortgage.

This is where a good broker can help you work through the options (remembering that they cannot give pension advice so you may need to get some of the details on that via your Union perhaps?).

If your current broker has gone silent you may have to look elsewhere, hopefully you have not paid the current broker for anything yet?

Regarding a possible complaint, why not start by talking to the CAB, see if they can help you decide if it is something you want to pursue?

Just to help set expectation levels, it is unlikely that you would get sufficient compensation to pay off the equity loan, as the aim would always be to put you in the position you would have been but for the poor advice, and that isn't going to be owning 100% of the home you are currently in unfortunately. ... but it might be enough to at least help you move in the right direction a little...

Mark_Lion

Thanks for the, again, excellent advice MWT.
I have not paid my mortgage broker anything. He said he gets paid by the lender.
He was recommended by the secretary at my work. I just emailed him to say, thanks for his good advice so far, but I need a reply very soon, or I will have to look for a new MB.

Good idea to go to CAB. Since finding my first application form, my thoughts of making a compliant have been boosted. 
I would only expect to get compensation to the amount of it being changed from shared ownership, to a repayment mortgage of the amount loaned in 2009. Maybe even that is asking too much.

A big worry I have since finding out about the shared ownership is, when it came time to sell, I would only have 56.4%, or maybe staircased to 76.4% of the house sale price. Then try to find another house with that sale money. 

MWT

Mark_Lion said:

I would only expect to get compensation to the amount of it being changed from shared ownership, to a repayment mortgage of the amount loaned in 2009. Maybe even that is asking too much.

Sorry, I removed my first reply as it was confusing and probably wrong.

There are others here better qualified to answer than myself, and the CAB may be able to help answer that question as well, but the problem is that you were probably never in a position to take a repayment mortgage for the full value of the property or you wouldn't have been applying for the type of mortgages that you were...?

So the remedy for the failure to properly explain the products to you couldn't result in a position where you had a full repayment mortgage for your current house that you couldn't afford at the time...

All of which leaves it very hard to predict what the compensation might be...

Mark_Lion

I understand this point you make.
My main focus is getting a remortgage to staircase as much as possible.

Mark_Lion

I had a thought to email the mortgage broker company and ask if the MB I was allocated to, was still working there. Also told them if I don't get a reply today, I will look for a new MB.
I expected the office manager to reply, but the MB replied, apologising for no reply. He has been busy with people wanting to get mortgage while the no stamp duty is on.
That's ok by me, but he should have sent a note to say to me before now.

In his email today, he asks me if I know when we remortgage, all of my Nationwide mortgage will be paid off, with a new lender taking over Nationwide debt. Will Catalyst take the Nationwide payment as now time for me to pay Catalyst in full?


Does anyone here know the right answer?
I have tried to get the answer to this from Catalyst, but the lady replies to me are very vague. My emails to Catalyst and her replies below.....  

My enquiry is, I have a mortgage broker helping me to staircase my Catalyst ownership.

I have Catalyst and Nationwide mortgage. Does Catalyst have a specific end date, or is it when Nationwide repayment mortgage ends?

 

The mortgage broker wants to remortgage Nationwide and staircase Catalyst. Does this mean ending Nationwide mortgage results in me have to pay Catalyst in full?

 

Currently, Catalyst is 43.6%. Can I staircase 20% so Catalyst would be 23.6%? Or does Catalyst have to be even number, 20% or 30% shared ownership? 

 

Kind regards

Mark

Catalyst reply...

Dear Mark,

 

The loan type you have with Catalyst has the option of being repaid in full or partially.

 

If partially repaying the loan you can repay any percentage from 10% to 33.60%,  it does not have to be an even number.  

 

The loan you have was taken out on the 18/09/2009 and will need to repaid within 25 years of that date or if the property is sold.

 

If repaying your mortgage in full, and not taking on another mortgage, you will need to repay the loan in full.

 

If you have any other questions please contact me.

 

Kind Regards,

 

Laura

I needed more accurate reply, so I sent...

Dear Laura

 

Thank you for your reply yesterday.

 

Other questions I have is, if I re mortgage £100,000 with another bank, pay off Nationwide £48,000 mortgage and staircase Catalyst £52,000 (approx). That is ok with Catalyst?

 

My current end date with Catalyst is 18/09/2034. If I get the re mortgage, the end date will have to be when I am 70, in 2030.

So 2030 will have to be the year I pay Catalyst in full, or sell the house?

 

Kind regards

Mark

Catalyst reply....

Dear Mark,

 

You can re-mortgage with another lender to repay the loan with Catalyst.

 

The loan can be repaid at any point before the end date or if the property is sold

 

Kind Regards,

Still not given accurate reply, so I tried again...

Hello

 

Thank you for the reply.

The question I am trying to get answered is...

 

The current end date is 18/09/2034. If I re mortgage so the bank end date moves to 2030, does Catalyst end date also move to 2030, or does it stay at 2034?

 

Kind regards

Mark van Leeuwen

Catalyst reply....

Dear Mark,

 

The loan must be repaid under the following circumstances:

 

1. The property is sold
2. The loan term has ended (25years after it was taken out)
3. The mortgage on the property has been repaid.

 

Kind Regards,

Laura

So each time I ask, she plays a game without giving the answer.

Don't know what to do, except try email Catalyst again and hope I get a different person to give real answer.

[Deleted User]

The 3 points given seem pretty clear to me.   You must repay at the earliest of those 3 points 

Mark_Lion

Ok, thanks. 
So, although the Nationwide mortgage will be paid and replaced with another mortgage, I will have to pay all of Catalyst loan?
If that is it, then I will not be able to staircase Catalyst.

I would like to get a mortgage to only replace Catalyst, but apparently that is not the done thing either.

[Deleted User]

No, the catalyst only becomes fully repayable when you clear the 1st charge mortgage completely.  Changing Nationwide to Halifax for example wouldn't count as it being repaid as you still have that debt.

You can get a 2nd charge mortgage to clear catalyst but leave nationwide in place.   No massive benefit as the 2nd charge mortgage will be more expensive than increasing borrowing on the main mortgage. 

[Deleted User]

As far as a complaint is concerned you would need to find out:
1.  Who actually gave you regulated advice
2.  What parts did they advise on

It sounds like the estate agents hasnt given advice, they have given you a suggestion of a scheme that might be a route to home ownership. They do this all the time as they might have houses for sale that people dont realise they can afford.
It also sounds like the paperwork is a red herring as well as that clearly says 'for monitoring purposes'.  Its nothing to do with advice, its just that they want to keep track of what brings people to them and maybe compare that to the types of deals people take. Its likely just for internal marketing purposes. 
The lender is obviously not to blame and neither is Catalyst as they just run the scheme and wont give advice on suitability.

That gives 2 options. 
1.  Mortgage broker - the big quesiton mark is whether they advised on the suitability of shared equity or just advised on the best shared equity mortgage.   In theory it should be both but I know a lot of people get clients to do their own shared equity applications to avoid getting involved too much.  I dont think this gets rid of liability but it was obviously a while ago so not sure what the rules on advising on equity loans back then. 
2.  The solicitor -  you should have been sent plenty paperwork about the shared equity loan, do you not have any emails or anything from around that time? 

I wouldnt be surprised if you got an upheld complaint.  Loads of brokers dont touch shared equity as they feel the client understanding isnt there and they dont want to get complaints in the future.   What you get though is anyones guess.   In theory you have lost out but also you have saved howver many years of higher mortgage payments as well so they'd likely take that in to account as well.   

I would send a complaint in to whoever took over the brokers and let them direct you accordingly.  FoS should still be open to you as an option 

MWT

Mark_Lion said:

My current end date with Catalyst is 18/09/2034. If I get the re mortgage, the end date will have to be when I am 70, in 2030.

So 2030 will have to be the year I pay Catalyst in full, or sell the house?

Based on what Deleted_User has said, yes, if you finally pay off the mortgage in 2030 then that would trigger the need to pay off the Catalyst loan at the same time.