What you can/cannot claim

[emanevs]

Many thanks!!

[MARTIN3030]

Hi Martin, I'd appreciate if you could clarify why you believe this cannot be claimed. I know a few people who are working on it at the mo. Thanks.

 

Hi ok I have just been alerted to this.

Please remember that this was drawn up and posted in 2008 and therefore is my fault for failing to update.

The higher lending charges were specifically related to Mortgage Indemnity Guarantees.

Since 2008 however much has unfolded.

 

Mortgage Indemnity Guarantees (MIG), also known as Higher Lending Charges, are insurance policies which compensate lenders for losses arising in the event of default of a mortgage loan.Mortgages with indemnity guarantees may have been mis-sold where a broker, advisor, packager or lender deliberately or negligently sold a product which was unsuitable or unaffordable, did not carry out correct due diligence before offering the finance, and/or recommended a product on the basis of the commission they could receive rather than the best interests of the customer.So whats the position from the regulators on this point ? Financial Services Authority regulations state that all advice connected to mortgages and other finance secured on property has to be “suitable for that customer” and that advisers “must make and retain a record” of it being appropriate.This is commonly known as “compliance with section 4.7″, and non-compliance is “actionable at the suit of a private person who suffers loss as a result”, under section 150 of the Financial Services and Markets Act 2000. Therefore, in cases where incorrect advice has been received, compensation claims of significant amounts are possible.Cases of people being mis-sold mortgages that incorporate mortgage indemnity guarantees appear to be extremely common. A Citizens Advice Bureau report called Set Up to Fail, about the ‘sub prime’ finance market in 2007, found that the charity’s repossession clients commonly had “inappropriate and unaffordable” mortgages and secured loans, and that people purchasing property under Right to Buy often received “particularly poor advice”.Any person who has borrowed money with a secured finance product within the 1999-2007 time period should enquire to see whether they were mis-sold.In many cases of mis-selling, clients may be able to make a claim for compensation against lenders. Recent successful court cases, and out-of-court settlements have already produced substantial awards of compensation.The first thing that people need to do is to find out if this happened in their case.Hope that clears up this point.Thanks for highlighting it.

[MARTIN3030]

For anyone interested here is CAB report;

 

Set up to fail - CAB clients' experience of mortgage and secured loan arrears problems

[bustthematrix]

Thanks a lot Martin, that's very helpful.

 

Could do with more clarity though.:grin:

 

My understanding is that MIG/HLC is quite different from PPI - either lump sum or monthly.

 

MIG/HLC, to my knowledge, is never really 'sold' as it's never optional as far as I am aware. It is apparently 'required' by the lender to enable them to lend to that particular client at a higher than 'normal' LTV. In other words it is entirely for the benefit of the lender but is explicitly paid for by the borrower.

 

This is the bit I find confusing. Why not just price the cost of this policy into the rate/terms of the loan as the policy has absolutely nothing to do with the borrower anyway? By specifically adding it onto the loan it becomes open to challenge and question as we are attempting to do now.

 

My point is that it's not clear to me how I can make a case for misselling of this type of insurance when it was not specifically sold to me? The loan was 'sold' to me but the MIG/HLC was a condition of the lender being able to offer the loan.

 

It was not optional like PPI so how would it qualify under misselling? Unless the entire loan itself was missold perhaps?

[bustthematrix]

Here's where I think there may be more mileage (not that I'm not open to all ideas so please feel free)...

 

1. Unfair Contract Terms Act 1977 S. 4:

 

It is unacceptable to place a commercial risk on to consumers. Huge institutions are more than capable of absorbing commercial risk. It is common for businesses to take commercial risks in trying to attract customers. You do not go in to Tescos and see Buy one Get one free Offers subject to terms that you might be required to pay a fee later if you never buy their products in the future in order to cover their commercial risks.

“A business cannot impose a term that requires a consumer to indemnify their loss”.

This is subject to the requirements of reasonableness in section. 11.

 

2. Also The Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR 1999).

 

The crux of it is that they will not be able to hide behind the "it's a charge for credit" argument they so often use when they have clearly declared, in writing, that it is to indemnify/protect them against the perceived higher risk of lending to you. This therefore can be classed as a ‘commercial risk of loss’ and this is expressly prohibited. Or is it not?

 

I suspect this also has to do with why MIGs/HLCs seem to have disappeared from the lending market in the last few years???

[MARTIN3030]

If you do a google search you will find lots of CMCs actively looking for claimants for this stuff-it is still on the table,and they have focussed their attentions on this after bank claims and credit cleanse were ruled out of their depths.

[MARTIN3030]

Also my searches have shown that the vast majorirty of these claims are settled out of Court-possibly in consideration of Barristers fees and costs - which are likely to be quite large.

[bustthematrix]

Hi Martin

 

If you could post up some of your findings, that would be great. There seem to be lots of CMCs going after PPI. MIG/HLC is rather different.

[MARTIN3030]

Sorry I am unable to post the links as most are commercial,and other stuff subject to copyright-I am expected to comply with site rules just as all !

One way you could perhaps get the info as relates to what criteria (statute and regs) that these CMCs are relying on in taking up cases for MIG is to contact a couple and discreetly do some phishing....you know-say for example on what basis do you propose to claim ?

Just a thought.

[wishboneash]

can you claim intrest for no dd

[MARTIN3030]

Sorry-can you explain dd ?

[kennythecelt]

Hi Martin

perhaps wishbones different threads about GMAC and the ombudsman could be merged and placed in the right forum. New posts appear in different locations and I don't think he's getting the benefit from someone being able to look at all the info in one place.

 

I think DD is just direct debit and can that fee be subject to interest on reclaim.

[MARTIN3030]

Ah ok understand.

I will take a look at merging Wishbones threads.Thx.

[bustthematrix]

An insider in the CMC industry has just confirmed to me that both MIGs and HLCs are "challengeable and reclaimable" and that this is a main area of business for his firm. Won't spill the beans of course...

[bustthematrix]

In my haste (and I must admit, annoyance that he did not reveal more ), my CMC 'insider' actually did confirm in his email some of what is relevant in reclaiming MIGs.

 

1. Unfair Contract Terms Act 1977 S. 4:- A business cannot impose a term that requires a consumer to indemnify their loss

and

2. Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR 1999).

 

He affirmed that these are 'spot on' (to use his words) in challenging and reclaiming MIG/HLC.

 

HTH

[MARTIN3030]

This confirms my findings also.

Whilst I dont advocate nor encourage CMCs,the figures involved in these claims mean costs exposure.

My understanding is that CMCs instruct a barrister to act.

[caro]

Is this insider a friend? If not, why are they telling you this?

[patrickq1]

and howz kenny long time no see dude

[bustthematrix]

Is this insider a friend? If not, why are they telling you this?

He's sort of a friend...we once had a common enemy...that sort of friend.

[sutton6344]

I have a case regarding mortgage arrears charges, I would like to go through the FOS however the building society issued their final response in 2008.

 

As this was obviously more than 6 months ago, will the FOS consider the case or throw it out due to th time elapsed???

[bustthematrix]

Not sure I suspect you may have to start the process again, if you wish to go the FOS route. There've been a few developments in the arrears fees reclaiming world since 2008. Why not restart the claim and add more beef to your letter? That way, it's a 'new' issue and the original 'final response' no longer applies?

 

Also, since the FSA waded in on mortgage arrears charges last year lenders have started refunding some of these fees. You may find them more amiable to your claims this time roumd.

[sj01]

Hi, Can any one tell me if they have managed to get a mortgage while unemployed.

I already have a mortgage but am now unemployed and want to buy a smaller place.

I would be able to reduce my mortgage from 100,000 to 30,000 but the C&G have said that they wont give me the mortgage for the 30,000 as I am unemployed. So am I stuck here?

I have never missed or been late with a payment.

Does any one have any ideas?

[patrickq1]

i think you may be better speaking to your bank ,after all they will have a history of your ins and out with banking and they would be better to asses your situation

not very helpful i know but its the only thing i can think of plus you would need as much as 10% of the value for a deposit ..

patrickq1

[bustthematrix]

Hi, Can any one tell me if they have managed to get a mortgage while unemployed.

I already have a mortgage but am now unemployed and want to buy a smaller place.

I would be able to reduce my mortgage from 100,000 to 30,000 but the C&G have said that they wont give me the mortgage for the 30,000 as I am unemployed. So am I stuck here?

I have never missed or been late with a payment.

Does any one have any ideas?

Hi Sj

I think it's going to be tricky. Lenders like to see both serviceability and affordability for a mortgage. In the current environment, they are under pressure both to be and to show responsible lending and this of course means documenting that a borrower has shown they can afford to make the repayments on a loan and that they are not likely to default over the course of the loan.

 

As unemployed, my question to you is, how would you show that you can i) afford the repayments and ii) satisfy them that whatever income source you have will likely cover the mortgage term?

 

There are some lenders who 'relax' the underwriting when you have a large deposit compared to the value of the house e.g. if you have a 40% or more deposit but I doubt if they'll ignore the fact you are unemployed? Unless of course you have other dependable income such as a pension, investment income from a trust etc. Or, do you own any income producing businesses for example?

 

It 'may' also be possible to do something if you can get a 'guarantor' with good income and good credit.

 

What I'd suggest now is that you consult one or two good 'no-upfront fee' independent Mortgage Advisors to see what they suggest. They have a view of the entire market and advise on things like this day in day out.

 

If you go to the internal mortgage advisers in any high street bank, make sure you talk to a few different banks as each one can only discuss it's own product and can give the impression that their offering is the best there is!

[sj01]

Thank you very much for your advice.