Unregulated pre 2004 current mortgage

Barb1954

We currently have a mortgage taken out in March 2004. Recently we tried to go to the financial services compensation scheme about it being miss sold by the broker. They could not help us as the mortgage was pre regulation. We complained to the Financial Ombudsman and it is outside of their jurisdiction they cannot help. This mortgage agreement has lots of unfair terms and conditions and also it is not signed by the lender. The mortgage has over 4 years left to run, it is high interest rate and we are state pensioners. It was taken out for £172,000 and a sub prime mortgage by I group then in 2016 was sold to Kensington.  Can Kensington use the original unfair terms and conditions in the original agreement.  We found out in May 2024 that we were unregulated and outside the statutory legal framework for mortgages.  Any advice would be more than welcome. 

retiredbanker1

Yes yes and yes they can.

Mark_d

You took out this particular mortgage contract and you are still bound by it.  I'm slightly surprised that you haven't considered remortgaging in the past 20 years.  Why act now?

Barb1954

In April this year we were looking at miss sold mortgages going well past retirement age and  no advice given by the broker. We rang the FSCS and they said the broker was not regulated and no longer in business. She checked the lender and they were not regulated. At this point we did not know our mortgage was unrelated, or understood the protections of regulated mortgage contracts. We contacted Kensington. The next day they rang us back and were shocked that we were unregulated and said they would redress the situation. Since May 2024 all they have done is said they were not present at the point of sale. Then when we question anything they send us a copy of the original agreement we took out in 2004. We did not look at remortgaging before as we thought we were ok with Kensington. Now that they have sent us the original agreement it is very concerning for us. 

silvercar

I’ll move this to the mortgage board.

ACG

If you think the terms are unfair, why did you agree to them? Why have you not reviewed the mortgage in 20 years? You could have switched lenders10 times over in that time.

As it is pre-regulation, if you think it is unfair you would need to take it court. But realistically that would involve probably a few years going back and forth, litigation and you would likely be throwing good money at something with no guarantee you would get it back. Its a risky and stressful move. 

tls123

Did you raise the complaint first with Kensington before approaching FOS? have you tried to remortgage away? What was the lenders response now you are unhappy with them subprime mortgages usually are encouraging customers to exercise options away from them to avoid being a mortgage prisoner trapped on high repayment rates. Have you done DSAR which forces the company to provide all relevant paperwork

MattMattMattUK

What do you think is unfair about the mortgage? 
Is the interest only high because you have never remortgaged in the last twenty years?

DE_612183

what is the interest rate you are paying?

silvercar

It would help if you could tell us what you think is an unfair term.

Forget the fact it is unsigned, they paid the money out and you accepted it. So that is a dead duck.

I’m guessing you had credit issues, if the broker pointed you to Kensington. So the choice would be to take this sort of mortgage or not buy the property. Again guesswork, but the broker may have suggested a long term into retirement in order to reduce the monthly payments. The thought being that nearer to retirement you could downsize to clear or reduce the mortgage, that’s assuming you didn’t remortgage to another provider along the way when your credit rating improved.

Many lenders allow mortgage terms that run into retirement, particularly if your employment is more office based than climbing scaffolding! That wouldn’t in itself be an unfairness. 

The real mystery is why in 20 years you haven’t remortgaged elsewhere to get a lower rate. 

MWT

Barb1954 said:

The mortgage has over 4 years left to run, it is high interest rate and we are state pensioners. It was taken out for £172,000 and a sub prime mortgage by I group then in 2016 was sold to Kensington.

How much is left to pay on the mortgage now?

Also was this an interest only mortgage, and if so what is your plan to repay the remaining amount owed in 4 years time?