Mis-sold mortgage compensation

[esg]

Has anyone noticed all the "mis-sold mortgage compensation claim" companies that have been sprouting up since it was featured on C4 news?? they all tend to have the c4 clip embedded on their home page.

 

It's different from ERC claims and focusses on how the mortgage was sold, i.e. was the broker commission led, so I'm not sure how they'd work out the cost of the compensation if someone is sold a mortgage they'd never be able to maintain then lose their house 2 years down the line as a result of some commission hungry broker!!!

 

So is this gonna be the next big claim after PPI's or can we just expect lengthy test cases with a massive back log off claims pending???

[rebel11]

Hi esg

 

Welcome to CAG

 

The guys will be happy to advise as soon as they are available.

[esg]

Thanks

[Sand-Dancer0191]

Dug this up from my saved files....

 

How can I tell if I have a mis-sold mortgage?

 

Did one or more of the following happen to you when you were being advised about your mortgage during the sale process?

Was it suggested that you applied to a specific lender for “speed”?

Did the correct process for the mortgage sale take place?

Were you provided with an Initial Disclosure Document by your mortgage adviser?

Were you provided with a copy of the mortgage Fact Find Document by your adviser?

Were you provided with a copy of the Key Facts Illustration by your mortgage adviser?

Was regular overtime, commission or bonus payments stated as being guaranteed?

If you were self employed, did the stated income figure match those notified to HMRC or was it suggested that a different figure be noted?

Were you advised to go down the self-certification route when there was proof of sufficient income to qualify for the mortgage?

If you were remortgaging to consolidate debts, were you advised of the additional costs as a result of this by extending your repayment period?

Were you advised to change the purpose of the remortgage application to fit a lender’s criteria?

Did any minor adverse credit that you might have prevent you going with a ‘High Street’ type lender or were you recommended to a so-called ‘sub-prime’ lender?

If you were advised to take an interest-only mortgage, were you made aware of the need to have a repayment vehicle in place to repay the capital debt at the end of the mortgage term?

Were you contacted to change your mortgage by telephone by a company ‘out of the blue’ or by and adviser you already knew?

If you were contacted, had you given them your permission to call?

This is not an exhaustive list it is merely some examples of possible mis-sold mortgage situations. There are many more.

The monitoring of mis-sold mortgage currently lies with the Financial Services Authority. It has the power to fine, suspend and even ban brokers that do not have tight controls in place, or didn’t treat customers fairly under the very strict rules of legislation called the Mortgage Code of Business (MCOB) and could not ensure the suitability or affordability of a new mortgage to its customers.

What constitutes a mis-sold mortgage?

Mortgage advice given to consumers by advisers must comply with the statutory principles of Treating Customers Fairly (TCF). This aims to help customers fully understand the features, benefits, risks and costs of the financial products they buy. It also aims to minimise the sale of unsuitable products by encouraging best practice before, during and after the sale.

The legislation makes the following very important statement – “A firm must pay due regard to the interests of its customers and ‘treat them fairly’”.

What might constitute a mis-sold mortgage arranged for you?

The following are just examples: -

The broker placed the mortgage with a lender that paid him the best commission (this is called a procuration fee) when a more suitable product was available elsewhere and probably at a cheaper rate

Borrowers who are advised to self-certify their incomes, possibly to ‘fast track’ their mortgage application when they qualify for a (cheaper) full status product

The broker failed to give over an Initial Disclosure Document at the start of the mortgage interview. This details the sort of mortgage advice they can give and whether they can recommend products from all lenders or from just a limited ‘panel’

The broker failed to supply a copy of the Key Facts Illustration that must include the financial details of the recommended mortgage so the borrower can make an ‘informed choice’. This will include the initial and future (anticipated) interest rates, the current and future (anticipated) repayments, fees charged, early repayment penalties (if any) etc

No available records are available of the sale/advice process

The broker has failed to take due care in assessing the borrower’s future ability to pay the mortgage after the initial rate expires. This is referred to as ‘payment shock’

Self-employed applicants who were advised to take a mortgage term beyond retirement with no ‘real’ means to repay

Inclusion of State Benefits currently received that might not be guaranteed in the long-term

Omitting some debts when assessing the borrower’s ability to pay the mortgage. These are usually unsecured debts i.e. loans, credit cards etc

Lack of clear advice on having a repayment plan in place to repay the mortgage at the end of the term. An interest only mortgage will not, by definition, repay the original capital debt, so what is the repayment method?

Coercion into buying a mortgage product that was inappropriate for the borrower’s needs

Inappropriately combining other financial products with mortgages in a way that makes them seem compulsory e.g. buildings & contents insurance, Accident Sickness and Unemployment cover or Mortgage Payment Protection Insurance

Not offering products from other lenders when a borrower’s true credit rating is established. This is called ‘cascading’ and should include product offerings from several lenders and not a more expensive one from the original one

Offering mortgage products where the initial rating period (i.e. fixed, discount etc) does not suit the borrower’s individual circumstances

Failure to offer borrowers a selection of mortgage products and not assisting in the decision process

The broker charging excessive fees. The guidelines suggest that the broker should be remunerated in proportion to the amount of work needed to finally place the mortgage

Failure to fully explain early repayment penalties (if applicable) when borrowers leave their current lender

The broker recommending a full remortgage with a new lender when a further advance from the borrower’s current lender would have been more appropriate (and probably cheaper)

Any suggestion on the part of the broker to omit details that might seem irrelevant but are important to the lender e.g. omitting to disclose other occupants over the age of 17 living in the property which is to be mortgaged

There are many more breaches that constitute a mis-sold mortgage. The fundamental question that you need to ask yourself is “was I treated fairly by my mortgage adviser”?

Remember that TCF does not mean the same as brokers being ‘nice’ to customers or creating satisfied customers, it is a breach where there is failure by ‘a firm (to) pay due regard to the interests of its customers and treat them fairly’.

[Sand-Dancer0191]

This may also interest you...

Many specialist lenders used mortgage packagers to originate applications via mortgage intermediaries. These acted as agents of the lender. Your CRA information should not be passed to a third party for use in selecting a mortgage. Mortgage Packagers often used the CRA data to advise the mortgage intermediary on products available from lenders based upon the results of the CRA search. They were arguably giving advice to the mortgage intermediary on the suitability of products without knowing the borrowers full circumstances. This is contrary to the Mortgage Code of Business

[jasperpad]

I am currently trying to get as much information on how to sue my mortgage company for mis selling my mortgage.

 

I tick around 60% of the criteria but want to do the suing myself as I don't like the idea of paying a company about 25% of what I may win.

 

I am not a lawyer or solicitor but have managed to stave of repossession last year with the help of CAG and I am hoping some of the members may be able to help me to do this.

 

I would of course put everything on CAG to help anyone else who may wish to follow this line and give as much help as possible.

 

When I have looked for information the web search site(s) seem to point straight to the companies who (in my mind) want to fleece me of up to 25% of what is rightly mine.

 

Any help will be appreciated.

 

jasperpad

[Sand-Dancer0191]

Hi jasperpad..This worries me a bit..........

.""I tick around 60% of the criteria but want to do the suing myself as I don't like the idea of paying a company about 25% of what I may win.""

 

A bit close to the 50/50 win lose.Bear in mind here that you are taking on a mortgage Co. with a large litigation dept,and large resources to finance litigation.

My initial thought is official complaint via OFT and FSA...One more thing to consider IF you take them to court YOU have to prove it...they just have to defend their actions.

I will post info up for you..their is a shed load to think about ie,hidden commission,Misrepresentation,Coercion, Financial services act MCOB etc.etc

[Lea_HTH]

Hi jasperpad..This worries me a bit..........

.""I tick around 60% of the criteria but want to do the suing myself as I don't like the idea of paying a company about 25% of what I may win.""

 

A bit close to the 50/50 win lose.Bear in mind here that you are taking on a mortgage Co. with a large litigation dept,and large resources to finance litigation.

My initial thought is official complaint via OFT and FSA...One more thing to consider IF you take them to court YOU have to prove it...they just have to defend their actions.

I will post info up for you..their is a shed load to think about ie,hidden commission,Misrepresentation,Coercion, Financial services act MCOB etc.etc

 

The thing that worries me about people bandying about 'suing' for mis-sold mortgages is that the end result is likely to be rescission. All that means is the original amount borrowed will have to be repaid (immediately) - this usually means having to sell the property in order to finance it. It's not a 'winning' situation - it's a mitigating one, which generally means the mortgagor loses their home anyway.

[jasperpad]

So maybe the best thing is to get one of the no win no fee companies to do the work for me, and then post the way they did it?

 

I would still like to have as much info before I do decide which way to go.

 

thanks for the help already and as usual everything is put as easy as possible for us all to follow.

 

 

Hi jasperpad..This worries me a bit..........

.""I tick around 60% of the criteria but want to do the suing myself as I don't like the idea of paying a company about 25% of what I may win.""

 

A bit close to the 50/50 win lose.Bear in mind here that you are taking on a mortgage Co. with a large litigation dept,and large resources to finance litigation.

My initial thought is official complaint via OFT and FSA...One more thing to consider IF you take them to court YOU have to prove it...they just have to defend their actions.

I will post info up for you..their is a shed load to think about ie,hidden commission,Misrepresentation,Coercion, Financial services act MCOB etc.etc

[Sand-Dancer0191]

Good point Lea

and to reiterate the win/loose 50/50 the odds are not very good,so I stand by

 

""Bear in mind here that you are taking on a mortgage Co. with a large litigation dept,and large resources to finance litigation.

My initial thought is official complaint via OFT and FSA..

One more thing to consider IF you take them to court YOU have to prove it...they just have to defend their actions.""

 

Saying is one thing PROVING it is the major problem..

[Sand-Dancer0191]

One more point in ref to esg......expect lengthy test cases with a massive back log off claims pending???

My opinion is....

Iif this is done for the wrong reasons

ie.just to get compen!!..and the claims companies take over then it could end like the Manchester cases.

 

This should NOT be about getting out of something(a debt)

BUThow to put an injustice right in your favour.. Or as best you can!!!

[esg]

One more point in ref to esg......expect lengthy test cases with a massive back log off claims pending???

My opinion is....

Iif this is done for the wrong reasons

ie.just to get compen!!..and the claims companies take over then it could end like the Manchester cases.

 

What were the Manchester Cases???

[esg]

Hello Sand-Dancer?!

 

What were the manchester cases???

[akania]

Not to hijack this thread but i have a very good case re mortgage mis selling and duress which the FSO has set up complaints for and im still in two minds wether to cancel it or not cause im crapping myself