Interest only mortgage reclaim

I have been approached by a company to start a claim against a mortgage company for an interest only mortgage I took out - having looked online I have not seen any mention about anything like this, has anyone being successful in claiming anything, and most importantly is it possible to do this yourself ?

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  • BoGoF
    BoGoF Posts: 6,915
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    Its a scam
  • [Deleted User]
    [Deleted User] Posts: 26,612
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    adaleone wrote: »
    I have been approached by a company to start a claim against a mortgage company for an interest only mortgage
    Always avoid cold callers, otherwise you'll very likely end up out-of-pocket, usually due to advance fee fraud.
  • dunstonh
    dunstonh Posts: 115,904
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    Most complaints like this fail. Partly as mortgage advice was regulated only from October 2004 and new interest only mortgages largely ceased being offered after 2008 (except on unregulated mortgages). So, its a very small window.

    Plus, most of the banks did not give mortgage advice. They facilitated the application on a non-advice basis. So, complaints about advice on a non-advised sale fail.

    I went to an FOS roadshow meeting and they said there that they dont put people off complaining but the FOS approach generally is that if you borrowed pre-credit crunch then interest only was not a problem as FCA rules allowed it. Plus, they compare it to if you had not bought the property and rented. Rent would almost certainly have been higher than the mortgage over the last decade. Plus, you wouldn't have gained equity in the property like you have with interest only mortgages.

    The FOS has been critical of the small number of CMCs that have been active in this area. A number of which only do so on a fee basis (often no initial fee but a follow up fee after 2-4 weeks when they lie to you about having a case but needing £x to be able to take it further). They put in complaints destined to fail but charge people in the process.

    In 2013 in an article in The Telegraph: The ambulance-chasing vultures have begun a push to encourage such borrowers to claim that they were mis-sold; that they didn!!!8217;t understand what they were getting into. On that, the chief ombudsman [Natalie Ceeney] is clear.

    !!!8220;Most people who bought an interest-only mortgage knew what it was,!!!8221; she told me. !!!8220;We have a problem, but it!!!8217;s not a mis-selling problem.!!!8221;

    Plus, often people change lender to get a new deal. A remortgage of an interest-only mortgage to a new interest-only mortgage would not be a missale. You would have to go back to the first sale of the interest only. Chances are that was pre-regulation. Plus you are likely to fall foul of the 3 & 6 year rule (you need to complain within 6 years of purchase or 3 years from being reasonably aware of an issue). Interest-only mortgages have one of the best product names going. No messing about there. "INTEREST ONLY".

    There have been a small volume of successes. Typically where is was advice and the advice was clearly bad. e.g. switching from a repayment mortgage to an interest only mortgage with no justification. However, it is low level stuff. The risk warnings have been present on mortgage documents for decades.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
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