Shared Appreciation Mortgage 17 September 2021 at 10:05AM in Mortgages & endowments 15 replies 599 views

GaryBC

Hi guys 
As executor of my recently deceased father's will I see that he has a Bank of Scotland SAM in place. 
I understand that these products were successfully challenged in the courts a few years ago but BoS chose to ignore the ruling and fight on. 
Can anyone tell me what the current situation is please? 
Thanks, 
Gary 

Edi81

If you just googled it you would see another court case has just started. 

https://www.google.co.uk/amp/s/www.thisismoney.co.uk/money/mortgageshome/article-8730357/amp/Bank-Scotland-facing-court-shared-appreciation-mortgages.html

GaryBC

That's last year's article. I'm trying to find out the current situation. 

MWT

This would seem to be the place to go:

https://www.teacherstern.com/shared-appreciation-mortgages-settlement-agreed-upon-with-barclays-bank/

The details there reference the action being taken against Bank of Scotland, but it may be too late to join that action or benefit from it should they succeed.

Also may make a difference if the property is in Scotland vs England/Wales.

hilly3

Glad that Teacher Stern have reached settlement with Barclays. In essence the bank has ageed that these mortgages were mis-sold. We cannot know the terms of the secret agreement. I, for one, could not afford the legal fees to join the group action (and certainly not the potential loss). How can I get Barclays to play fair with all of their remaining mortgagees and re-negotiate the loan without recourse to expensive legal costs.

MWT

hilly3 said:

Glad that Teacher Stern have reached settlement with Barclays. In essence the bank has ageed that these mortgages were mis-sold. We cannot know the terms of the secret agreement. I, for one, could not afford the legal fees to join the group action (and certainly not the potential loss). How can I get Barclays to play fair with all of their remaining mortgagees and re-negotiate the loan without recourse to expensive legal costs.

Unfortunately with an out of court settlement there is no public admission of anything so you can't say that the bank have agreed that there was any mis-selling, and there isn't anything you can use to force the bank to do anything more than they have already done.

It is good news for those in the action, but no help to those who were not...

Stematt49

It would appear we will have to wait for the outcome of the BoS High Court Case to dissect the ruling.

The articles I have read regarding this refer to the case being before the High Court in early October. Has anyone come across any more information on where it is currently?

Stematt49

Apologies I meant also to add does anyone know how long the court case is in their experience likely to take? 

Swiftnick67

RE the Barclays settlement, is there/can there be, another case betaken against Barclays. As the Executor, of my late mothers will, I have come across a SAM with Barclays taken out in 1998 for 30K (property valued £120k). There is some documentation from 2016, confirming if the property was now valued at 360,000 we would have to pay back £210,150, which on a mortgage calculator would indicate an annual interest rate of 28%!!

GaryBC

Only 28%? Lucky you! 

Anecdotal evidence that I've heard is that the reason Barclays caved was because they weren't sufficiently tight lipped when it came to offering 'advice'. As soon as evidence of that was uncovered it gave the regulator a chink to work with.
Advice=misselling=gotcha! 
Or something like that. 

MWT

Swiftnick67 said:

RE the Barclays settlement, is there/can there be, another case betaken against Barclays. As the Executor, of my late mothers will, I have come across a SAM with Barclays taken out in 1998 for 30K (property valued £120k). There is some documentation from 2016, confirming if the property was now valued at 360,000 we would have to pay back £210,150, which on a mortgage calculator would indicate an annual interest rate of 28%!!

I've not seen any other groups formed to take another run at Barclays, and it probably would not be cheap to try it on your own...

Not sure where the 28% figure came from, but a £30k loan with 8.1% interest rolled up over 25 years would get you to around the £210k figure ( original loan + 75% of the appreciation in value ). Even if you work it out based on 2016, it would still be under 12%...

The 25 year number is in line with standard mortgage rates back in 1998 which were also around 8%...

What is the current value though?