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Lord D'arcy Pew

Up 99% Of Endowment Mortgages To Fall Short

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I don't think they expected financial collapse, anyone know what the shortfall figures where before the 2007 crash happened?

Looks like the banks are going to be rationing loans even more.

House prices can only recover on this news.

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What about all those that have interest only mortgages and no repayment method in place.

You just keep re-mortgaging? People are still doing that in their 50s - it's free money.

Then hope hyperinflation erodes the debt away! Woohoo! Happy days are here again.

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You just keep re-mortgaging? People are still doing that in their 50s - it's free money.

Then hope hyperinflation erodes the debt away! Woohoo! Happy days are here again.

Ah the classic business and govt approach to debt.

I mean what can go wrong.

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If it sounds and performs like a Ponzi scheme...then it's probably a Ponzi scheme

If it run by a Government it's a economic miracle (Gordon Brown), if it's run by an individual it's an economic crime (Bernard Madoff).

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I've got an endowment, the shortfall appears to have leapt in the last year.

I suppose, fortunately, any shortfall is relatively small given that the mortgage dates back to the 90s when house prices were still reasonable.

Still this is another ticking bomb that will explode in five to ten years, further impacting people's finances as they struggle to pay off the this decade's extravagences.

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I've got an endowment, the shortfall appears to have leapt in the last year.

I suppose, fortunately, any shortfall is relatively small given that the mortgage dates back to the 90s when house prices were still reasonable.

Still this is another ticking bomb that will explode in five to ten years, further impacting people's finances as they struggle to pay off the this decade's extravagences.

Care to elaborate how much the short fall has increased in the past year? Where you expecting a shortfall before and it's just got worse?

I bet the fund managers taking your money haven't lost out.

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Care to elaborate how much the short fall has increased in the past year? Where you expecting a shortfall before and it's just got worse?

I bet the fund managers taking your money haven't lost out.

Without checking the letter, I seem to recall a figure of about £5,000 now at around £8,000. It seemed quite a drop in performance, and therefore exposure. The annoying thing is the financial advisor is still creaming a 2.5% commission on my annual premium.

The commission over the first (three) years was something like 33% - no wonder they were keen to sell them. The line of it paying off the mortgage and leaving a bit over to give a little nest egg was very common.

(I challenged it a while back without success.)

The second incident with a FA, never trusted or used one since.

Edited by tinker

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Guest eight
Without checking the letter, I seem to recall a figure of a about £5,000 now at around £8,000. It seemed quite a drop in performance, and therefore exposure. The annoying thing is the financial advisor is still creaming a 2.5% commission on my annual premium.

The commission over the first (three) years was something like 33% - no wonder they were keen to sell them. The line of it paying off the mortgage and leaving a bit over to give a little nest egg was very common.

(I challenged it a while back without success.)

The second incident with a FA, never trusted or used one since.

Kind of related, there was a piece in the Sunday Mirror last week about Child Trust Funds.

The example quoted average growth of 7% per annum (less fees, of course).

I'm guessing there are going to be a few disappointed 18 year olds (not to mention parents) in a few year's time.

eight

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The reason i hopped of the boat in 2002. Everyone forgot about this particular elephant.

I took Legal and General through the Ombudsman service and got my money back, plus a fair bit more.

This was the ORIGINAL pyramid.

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I remember my dad explaining endowment mortgages to me in his assistant manager office at the Abbey National branch in south Chingford in 1983, and thinking that it didn't really make sense then. If you had a debt, why wouldn't you not just want to pay it back rather than chucking it on red or black? Course, at that age, all I said was "uhhhhh?"

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I've got one too but kept it as a 'savings plan' after clearing the mortgage early. I keep meaning to look at it but have been really lazy. I know there is a shortfall and got about 2k through the ombudsman a couple of years ago. This thread has reminded me to take another look at it.........probably tomorrow. :rolleyes:

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Without checking the letter, I seem to recall a figure of about �5,000 now at around �8,000. It seemed quite a drop in performance, and therefore exposure. The annoying thing is the financial advisor is still creaming a 2.5% commission on my annual premium.

The commission over the first (three) years was something like 33% - no wonder they were keen to sell them. The line of it paying off the mortgage and leaving a bit over to give a little nest egg was very common.

(I challenged it a while back without success.)

The second incident with a FA, never trusted or used one since.

How much longer do you have? Have they wrote asking for more money as well to make up the shortfall?

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So just about everyone with an endowment mortgage is going to have to cover the shortfall before the end of the mortgage term (or get another mortgage or secured loan).

In an environment of rising unemployment and tax increases on the way, that will do wonders for consumer spending.

VMR.

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Let's face it the endowment companies did not expect such low inflation and interest rates when these were taken out - this has depressed the nominal returns.

But on the other hand, at the same time borrowers had the benefit of far low interest payments over that period....did they actually put anything aside?

I gave L&G a ten year shot at the title.

At no time did my plan ever become worth more than the sum paid in. Right through the boom. It did nowt.

Whereas a pension i have with Scottish Equitable made money without me paying in a cent for 5 years. Its now lost about a third of its value in the last year but thats another story.

L&G were stealing my money, luckily, i twigged in time and set the Ombudsman on the bastards.

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Sorry - did I give the impession they weren't thieving b*stards. They are. I hate every single one of them. It is a failed business model designed to fleece its customers - and they only find out when it's too late to fight.

If you've got one and haven't cashed it in - you really ought to think about it despite the horrible penalties.

I never took one out for housing purposes - simply because I didn't understand their purpose...I felt you should keep your borrowings entirely separate from your investments - and that was back in 1985.

But I did have an AVC that I cashed in (took off 33% value to get it out and it doubled in value in a year !).

And my wife had some as part of her pension which we successfully fought over a period of about 8 years to get full compensation under a misselling case.

But that doesn't negate my point about the fact that borrowers should have put some extra money aside when rates were (are) low and they wouldn't be in any difficulties whatsoever - so no sympathy.

No you didnt. We're on the same page.

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