Mis-sold finance. Still in shock.

Derek2020

Hello
Two years ago, I jointly inherited a house. I took out a relatively small loan of just over half the house value in order to buy out my sister's half and to release a small £ for my business. I was quite happy with the overall cost, bearing in mind it was a secured loan against the property.

However, after nearly 8 months- yes, months- of promises of 'next week, next week' we were at the point of instructing solicitors and then suddenly the bank decided that they didn't want to loan it to me, but would loan it to my company instead... they said the company had a better credit rating than its director (!)

At that point I had invested all my money into the fees, solicitors, valuation etc and if I hadn't gone ahead at that point I would probably have failed- both personally and professionally.

As a result I ended up with stamp duty, having to pay rent to live in my own house, additional legal costs, landlord costs and so on- that was all bad enough, but then I found out that the headline charges- which were all paid up front- were only a part of it and cut a long story short, 2 years later I find their charges have more or less out-stripped the value of the house. My company has had a repossession order against it and so now the bank is my defacto landlord and is charging colossal levels for me to live in my own home- which I always owned half of anyway- and now I'm facing eviction entirely.

I should add that the bank has told me that I have no rights and this is not true- as a small business I have the rights to FOS.

I believe that the bank/ broker have sold me an entirely unsuitable financial product and haven't been clear about their charges. Furthermore, by holding me on the hook for 8 months before changing their mind, I believe they've had an unfair advantage over other lenders as they've either deliberately or negligently allowed this to happen.

I know there will be some reading this saying "tough- you signed it, you accept it." Fine- that's what I thought until I found it happening to me.

The question is whether it's worth going to the FOS; I've heard it's years of wasted time and effort and they always side with the bank. Or whether I should just take it straight to Court. If I lose then I lose- what are they going to do? Break the company- they've already had everything from me.

TIA.

Grumpy_chap

Derek2020 said:

Hello
Two years ago, I jointly inherited a house. I took out a relatively small loan of just over half the house value in order to buy out my sister's half and to release a small £ for my business. I was quite happy with the overall cost, bearing in mind it was a secured loan against the property.

However, after nearly 8 months- yes, months- of promises of 'next week, next week' we were at the point of instructing solicitors and then suddenly the bank decided that they didn't want to loan it to me, but would loan it to my company instead... they said the company had a better credit rating than its director (!)

At that point I had invested all my money into the fees, solicitors, valuation etc and if I hadn't gone ahead at that point I would probably have failed- both personally and professionally.

As a result I ended up with stamp duty, having to pay rent to live in my own house, additional legal costs, landlord costs and so on- that was all bad enough, but then I found out that the headline charges- which were all paid up front- were only a part of it and cut a long story short, 2 years later I find their charges have more or less out-stripped the value of the house. My company has had a repossession order against it and so now the bank is my defacto landlord and is charging colossal levels for me to live in my own home- which I always owned half of anyway- and now I'm facing eviction entirely.

I should add that the bank has told me that I have no rights and this is not true- as a small business I have the rights to FOS.

I believe that the bank/ broker have sold me an entirely unsuitable financial product and haven't been clear about their charges. Furthermore, by holding me on the hook for 8 months before changing their mind, I believe they've had an unfair advantage over other lenders as they've either deliberately or negligently allowed this to happen.

I know there will be some reading this saying "tough- you signed it, you accept it." Fine- that's what I thought until I found it happening to me.

The question is whether it's worth going to the FOS; I've heard it's years of wasted time and effort and they always side with the bank. Or whether I should just take it straight to Court. If I lose then I lose- what are they going to do? Break the company- they've already had everything from me.

TIA.

There is too little information there for anyone to comment.
What were all the charges that have taken out the value of the property?  (Over a very short period of 2 years.)
Did your Ltd Co purchase the house / half house, or did the Ltd Co lend you (as an individual) the money and you purchased the house in your name?

DullGreyGuy

The Financial Ombudsman upholds about 35% of all the complaints it receives and so it certainly doesn't always side with the financial service provider. The rate does however vary massively by complaint category and the volumes of complaints about mortgages/secured loans are small so very choppy (they also dont publish upload rates when there are under 30 complaints in a month). First charge lending tends to be lower than average upholds whereas second charge lending tends to be higher. 

Not sure how a "small loan" is >50% of a house's value, also not sure why you didnt get a mortgage. 

Ultimately going to the ombudsman doesn't harm but remember if the complaint is about fees then it's your company that will register the complaint and the company that will receive any compensation. 

The bank won't have provided advice, if you are alleging bad advice then that would be a matter to take up with the broker. 

Derek2020

Grumpy_chap said:

Derek2020 said:

There is too little information there for anyone to comment.
What were all the charges that have taken out the value of the property?  (Over a very short period of 2 years.)
Did your Ltd Co purchase the house / half house, or did the Ltd Co lend you (as an individual) the money and you purchased the house in your name?

Hello
I don't think I should go into specifics about the value on a public forum, but I borrowed just under half the house value to pay of my sister and I had to pay the interest up front, which was also borrowed. However, the current repayment is sitting at 80% of the value of the property.

I invested half the property into the company, with the company purchasing the other half from my sister. It was- until a couple of weeks earlier- supposed to be ME borrowing it, secured against the property. As I wrote above, it was purchased in the company name resulting in stamp duty, me having to pay rent, going through all the conditions of a landlord- so I became my own landlord and my own tenant.

None of this was explained by the broker nor the lawyers... Of course they're now saying they raised reservations when the bank changed their mind... Naturally.

Derek2020

DullGreyGuy said:

Not sure how a "small loan" is >50% of a house's value, also not sure why you didnt get a mortgage. 

Ultimately going to the ombudsman doesn't harm but remember if the complaint is about fees then it's your company that will register the complaint and the company that will receive any compensation. 

Thanks. Why didn't I go for a mortgage? Yes, that's a good question, isn't it... I took the advice of the broker...

I'm not sure whether my complaint should be personal or company or both. After all I originally applied in my own name and they then 'massaged' the deal to make it in a limited company.

I have nothing to lose by pursuing this, but it's whether I go to the FOS or Court. I know if I go to FOS and they refuse I can still go to Court, though without FOS I'll have a hell of a time. But if I go to Court then I can't subsequently try the FOS.

What makes it worse is when we went to Court- the bank has applied for and received a repossession order from the company- I wasn't even allowed to present my defence. How can a Court make a ruling that money is owed if I am disputing it and the Court didn't even listen to my evidence (which I think is enough for an appeal- but that's out of my knowledge)