Pensioner unable to claim PPI and halifax aren't helping

geraldine79

Hi, new person post and lots of detail so hope someone could help. My mum was unable to reclaim PPI for interest only mortgage as the broker was independent and had since died. She tried unsuccessfully via a solicitor in 2012. Halifax have had the account the entire term, it ended in 2011 and she still owed the value of the mortgage after 25 years!! Approx 25k. I've just found out she's STILL paying some (unknown) monthly money off this mortgage and halifax have just given her jargon and she's passed around the branch like a hot potato by young, untrained and uninterested staff. 38 years later she is paying!!! PLUS her rate is over 8%!!!! I am aghast that they advised her to remain on this rate back in 2011 knowing she was missold a product but she couldn't reclaim! How does this rate and tactic help a pensioner? She's 76 now and wants her affairs in order. SURELY there is something wrong here? What about responsible lending for someone in thatt position?? We are in N Ireland if that makes any difference? TIA

BarelySentientAI

geraldine79 said:

SURELY there is something wrong here? 

Yes.  Having an interest only mortgage without a plan to pay off the capital at the end of the term.

silvercar

If the mortgage ended in 2011, how come she is still paying interest and Halifax haven’t taken any action? Normally they would expect payment at the end of the term or agreed a new mortgage term. If the latter they would expect a repayment vehicle to be in place, especially on someone older.

if she isn’t satisfied with the way Halifax have treated her, she could complain. If she can’t reach a resolution with the complaint, she would go to the ombudsman. Best to consider possible outcomes before taking these steps. A lender would be within their rights to demand full repayment of the loan if the term has finished.

Hoenir

You posted this in 2014

My mum was mis sold her mortgage in the 80s and when her mortgage ended she still owed 22k. Halifax let her have a lending into retirement mortgage for the remaining amount.

10 years has past. What action did you take? 

Silvertabby

PPI and interest only mortgages are two completely different things.

From the sound of it, your mum took out a 25 year interest only mortgage for £25K.  At the end of the 25 year period, having only paid the interest due, she still owed the original £25K.  This is the way interest only mortgages work - this would have/should have been explained to your mum at the time, and she would have been told that she would have to find £25K to pay off the loan at the end of the term.  Either by setting up a savings plan to run alongside the mortgage, or by using an expected pension lump sum, or by selling the house and downsizing.

However, back in 2011, it may be that the bank took sympathy on her and gave her a capital repayment mortgage for the outstanding amount.  8% in these circumstances isn't unusual.  Do you know how much is still owing?  The new mortgage is unlikely to be for longer than 15 years so, hopefully, your mum should be seeing light at the end of the tunnel.   

Unless she has failed to make regular payments thereby racking up arrears and penalties, which is a whole new ball game.......

cannugec5

I’m not sure that you/ your mother understand the concept of an interest only mortgage. 

The whole point of it was that you only ever pay the interest - not the capital. So the amount outstanding never changes. 

Traditionally the capital repayment was covered by an endowment policy or similar. So that would be a separate payment, to a different policy , and when it matured after 20 or 25 years ( or similar) it would have sufficient equity to pay off the outstanding capital on the mortgage. 

But. 

Many endowment policies did not achieve sufficient amounts to repay the mortgage, or people did not understand and when the policy matured they used the money for other purposes- completely forgetting the outstanding mortgage. 

I’m sorry to say that it doesn’t matter that your mother has been paying the interest for 38 years, if it is still only the interest. The outstanding balance will never change until the capital is tackled. 

ACG

Your post is very one sided.
Your mum took out a pension in her 30s, she was not a pensioner then. 
Your mum found out she was on interest only 12 years ago. In that time the base rate has been at an all time low and she has seemingly done nothing to pay the balance down. 
You/your mum have not made a dent into the situation in that time. Why?

The 80s was well before my time as a broker but regulation was nothing like what it is now. 

I cant comment on the sale of a mortgage I was not there for. 
But by your own admission your mum has known about this for 12 years and done nothing about it. If your mum wants the mortgage paid off, she needs to start paying it off. It wont clear itself. 

Keep_pedalling

Based on you previous post your mum also owns a share on a house in the ROI which she purchased rather than pay off the IO mortgage on her own home. This is nothing to do with mis selling and everything to do with poor financial decisions by your mum. The solution is simple either sell her share of the other house and pay off the mortgage or sell her home, pay off the mortgage and move to the ROI. 

penners324

PPI on a mortgage is considered a good thing. So unlikely to have been missed it.

The entirely separate issue of the interest onl mortgage requires more information. Sounds like a remortgage(s) should have been done by your mother.

dunstonh

 My mum was unable to reclaim PPI for interest only mortgage as the broker was independent and had since died.

PPI for mortgages was not considered bad.  Indeed, in the FCA consultation paper on PPI complaints, they considered not including MPPI.  In the end they did because they felt it would be confusing for people to understand different types.   However, their expectation was that most MPPI complaints would be rejected.  And that was the case.     Only single premium MPPI was generally considered to be a bad thing.  Monthly MPPI was considered a good thing.

I've just found out she's STILL paying some (unknown) monthly money off this mortgage and halifax have just given her jargon and she's passed around the branch like a hot potato by young, untrained and uninterested staff.

If the mortgage still exists, then there would still be monthly payments.  Interest only means paying the interest.  If she has a bespoke arrangement arranged centrally, the branch staff wouldn't necessarily know of this or be able to see why.

38 years later she is paying!!!

Not sure why you have exclamation marks.  if she only pays the interest, she is never going to stop paying.

PLUS her rate is over 8%!!!!

The long term average mortgage rate is about 7.2%.   So, she is only marginally over the long term average.   And plenty of people are paying over 8% at the moment.

 I am aghast that they advised her to remain on this rate back in 2011 knowing she was missold a product but she couldn't reclaim! 

They won't advise anything.    The individual decides when to seek advice and where to seek it from.   That adviser will give the advice.  Not the lender.

You mentioned PPI misselling but that has nothing to do with the mortgage.   Plus, you say it was arranged by a broker.  Again, the lender has no liability with that.

! How does this rate and tactic help a pensioner? 

How does not paying your mortgage down help?   At the end of the day, if you borrow money, you need to pay the interest and the capital.  If you only pay the interest, then you will remain in debt forever.

SURELY there is something wrong here? What about responsible lending for someone in thatt position?? 

You appear confused.  That is why you think something is wrong.  
Responsible lending is about the original lending decision and mortgages only became regulated in 2004.   You say she bought 38 years ago.  So, it wont apply.

It may be time to consider equity release/lifetime mortgages.  

The 80s was well before my time as a broker but regulation was nothing like what it is now. 

Just picking up on ACGs comment, mortgages were harder to get in the 80s.   Lending criteria was stricter and it was mandatory to have an endowment policy or repayment vehicle with an interest only mortgage.   The lender would have been assigned on the policy in the majority of cases to prevent the policy from going unpaid.    However, that was relaxed in the 90s and consumers given free reign to decide for themselves.     

An interest only mortgage without a repayment vehicle in the 80s would be unheard of apart from an error or the person later cashing it in when the checks were no longer in place.   I wonder if this is the "missale" that the op is referring to and why Halifax have extended the term.  I have seen FOS decisions on these previously where a repayment vehicle failed to be set up, and the lender was instructed not to repossess but continue the interest-only mortgage until the property was sold.

Silvertabby

Just another thought.....many moons ago, a financial bod was on daytime TV talking about the interest only mortgages/endowment policies problems, and how some people just didn't understand why they had a problem.  He did say that he had personally spoken with a (thankfully small !) number of people who had believed that interest only meant interest free......