Tragic... Sounds real bad. Endowment mortgages :(

omgwhathaveidone

I watch this guy on youtube and he is in a pickle.

I cannot post links yet, so search this on youtube.

"tv repair community"

For his latest video

"So I'm saying goodbye now"

I wonder how many others were/are in the same boat.

I myself will now look to leave Lloyds/Halifax now, cos although I have only heard the one side, that side tends to ring bells of previous people in the same situation.

Thank you for reading.

TadleyBaggie

So he had an endowment mortgage and was told several years ago the policy would not pay off his mortgage. Now claiming was mis-sold.

kaMelo

It's not even clear what the problem is, he mentions endowment mortgages and acknowledges they wrote to him to tell him it wouldn't clear the loan. He then mentions about being mis-sold a mortgage, it's not clear whether he means the aforementioned endowment or another one.

Other than that it's just a lot of waffle.

TadleyBaggie

I took out 3 separate endowment mortgages in my working lifetime, the first two were backed by policies, the third by pension product. I guess I was lucky as the plan worked perfectly and the final mortgage was paid off without a hitch.

soolin

https://forums.moneysavingexpert.com/discussion/6684205/tragic-sounds-real-bad-endowment-mortgages

I haven't seen the video nor do I intend searching them out. However when we had a part endowment mortgage some years ago we were warned it wasn't guaranteed to pay off the mortgage and indeed we got regular letters telling us that we were 'amber' as to available funds at end of term. We had understood the advice though we were given when we took out the endowment and had backed it with another policy so in the end when we paid off the mortgage we actually came out quite well .

I don't know your circumstances of course but it seems an over reaction to leave a bank purely because someone random on Youtube bought a product that they didn't fully understand. It would have been the same wherever they took an endowment mortgage from.

Dustyevsky

I recall rejecting offers of endowment mortgages when we were searching for a deal in 1987. They were something the agents of lenders were keen to push, perhaps because they were taking better commission for selling them.

We knew then that there was no guarantee the mortgage would be paid off by endowment, so when we found a lender on the high street who offered both standard repayment and endowment, and with no pressure (Abbey National) we went with them.

It's nonsense to claim the facts about endowment mortgages weren't widely known. People should take responsibility for their actions, financial and otherwise.

QrizB

I watch this guy on youtube and he is in a pickle.

He had an endowment mortgage. Here's a BBC article from 2013 explaining the problems.

When you took an endowment mortgage, you could choose a full endowment (which is guaranteed to cover the value of your mortgage) or a low-cost endowment (where the guaranteed payout is less than the value of the mortgage, and you're relying on investment growth to make up the difference). Low'cost endowments had lower payments but carried that investment risk.

Endowment policies were very popular in the 80s and early 90s, but by the mid-90s the risk of low-cost endowments not paying out were becoming apparent. I took my first mortgage in 1996-ish and chose a repayment one.

By the late 90s the financial regulators had told endowment mortgage providers to write regularly to their customers advising them whether their endowments were likely to cove their mortgages, or not, with a "traffic light" approach of green, amber or red warnings. This was the prompt to the customers to make arrangements to cove the shortfall - a savings account, an additional investment, or switching to a repayment mortgage.

Lloyds wrote to the guy seven years into his mortgage to tell him the endowment wasn't going to cover his mortgage. That was his opportunity to do something about it. Apparently, whatever he did wasn't enough and now, 13 years later, his home is on the line.

His court case apparently didn't go well for him today.

Dustyevsky

I've watched the video now. My opinion hasn't changed. He may be a pleasant guy with a useful channel, but he's clearly sane, capable of rational thought, and his responsibility to repay money borrowed was the same as everyone else's.

However, the idea that your local bank branch and its manager could be a 'friend' was a thing in the last century. We had a manager who called us in to 'review our finances' at some point. Towards the end of the meeting he offered us a loan at 15%. I can't recall what a competitive rate was then, but we knew it was way below that figure! No matter how friendly the guy was, he was trying to sell us some duff debt. We thanked him and left. And yes, it was Lloyds.

MWT

https://forums.moneysavingexpert.com/discussion/comment/82146444#Comment_82146444

My first mortgage was in 1982, and it used a 'low-cost' endowment product as the repayment vehicle.

The sales pitch was well rehearsed, but it never felt quite right, and when I moved again 18 months later I dumped it in favour of a standard repayment mortgage.

My only regret is never benefitting form the subsequent mis-selling compensation as I saw the problem for myself and got out early :)

We get a slow steady stream of similar cases on here as these mortgages reach maturity but sadly it remains very hard to have sympathy for those who have had years and plenty of warnings about the likely outcome. yet did nothing to fix it…

silvercar

We’ve had 3 low cost endowments. From when we bought in 1985, moved in 1988 and again in 1993. The first one paid out a bit less than the mortgage, the second a bit more and the third a bit less. Overall we were about £40k down. We moved again in 2006 and took an interest only offset mortgage. That will be cleared by savings and investments, helped by rigidly paying the full monthly interest only payments on the offset, even though we were building savings in the offset account.

If we had started off with repayment mortgages rather than endowment, we wouldn’t have been able to afford the moves we made.

Silvertabby

We took out our mortgage in 1994. The advisor (Lloyds) mentioned endowments, but recommended that we go for a repayment, as he could no longer say with any confidence that an endowment would make enough to clear the mortgage. We took his advice.

I remember a couple of work colleagues panicking when they received red/amber letters, but this must have been at least 20 years ago - are there really endowment mortgages out there that still haven't reached their terms?