Mortgage Mis-selling...here come the lawyers.

[HowMuch!]

Can someone please explain to me... compensation can be claimed for actual loss.

where are the losses said to come from?

[ingermany]

9 minutes ago, HowMuch! said:

Can someone please explain to me... compensation can be claimed for actual loss.

where are the losses said to come from?

I think the easiest illustration would be an interest only mortgage where the lender has hit retirement still owing all the capital. Will argue that he should have been warned he will still be in debt after retirement,  with no means to service the debt without losing his house. Will argue he is out of pocket by an amount equivalent to the outstanding loan plus some of the interest owing. That's the argument the lawyers are making. Or it MEW has been used to leave the borrower with a big loan outstanding after retirement.  Argument is that the banks had a duty to stop the customer getting the loan. 

I recall a case in 2007 of an unemployed single mum who got a loan of 15k from NatWest for cosmetic surgery. She successfully argued that the bank should never have advanced her the money and she was compensated for the balance, interest and emotional distress. 

This could be about 2 million mortgages. 

[HowMuch!]

4 minutes ago, ingermany said:

I think the easiest illustration would be an interest only mortgage where the lender has hit retirement still owing all the capital. Will argue that he should have been warned he will still be in debt after retirement,  with no means to service the debt without losing his house. Will argue he is out of pocket by an amount equivalent to the outstanding loan plus some of the interest owing. That's the argument the lawyers are making. Or it MEW has been used to leave the borrower with a big loan outstanding after retirement.  Argument is that the banks had a duty to stop the customer getting the loan. 

how are they out of pocket, they have had the exclusive use of the property for the period... the equivalent rent should therefore be taken into consideration?

[ingermany]

Just now, HowMuch! said:

how are they out of pocket, they have had the exclusive use of the property for the period... the equivalent rent should therefore be taken into consideration?

There are a whole bunch of IO mortgage payers making the argument though. Regulators think something should be done, because these people might lose the homes that they never really owned in the first place. 

[ingermany]

16 minutes ago, HowMuch! said:

how are they out of pocket, they have had the exclusive use of the property for the period... the equivalent rent should therefore be taken into consideration?

And the Financial Ombudsman seems to be siding with borrowers.  Customer stupidity seems to be no defence. 

 

Broker must pay £60k over mis-sold interest-only mortgage - FOS

Written by Adam Cadle

05/01/2018

Mortgage broker, Advance Mortgage Funding, must pay a former client more than £60,000 after an adviser provided unsuitable mortgage advice in 2009, the Financial Ombudsman Service has said.

In its decision the FOS said the client, Mrs M, used a loan to buy an overseas property with Harlequin with the intention of using the rent from the property to meet repayments.

The property was never constructed and Mrs M lost her money as a result. Advance Mortgage said it wasn’t required to give advice on the suitability of the investment but the FOS sided with the complainant.

Defending its decision, the FOS said the mortgage was not suitable for the situation

In a written final ruling on the case, ombudsman Sue Wrigley said she upheld the complaint because Mrs M she was not fully advised of the risks in repaying the mortgage.

Wrigley added: “Without the mortgage I don’t think Mrs M would have invested in the Harlequin property.

“She didn’t have any other savings or investments she could have used.

“So I think it’s more likely than not, that but for the unsuitable mortgage advice, Mrs M would not have invested in the overseas property and would not now be left with a mortgage she can’t afford to repay.”

The FOS said the only way to make the situation right is to put Mrs M in the position that had she never taken out the mortgage.

 

[dpg50000]

8 hours ago, ingermany said:

And the Financial Ombudsman seems to be siding with borrowers.  Customer stupidity seems to be no defence. 

 

Broker must pay £60k over mis-sold interest-only mortgage - FOS

Written by Adam Cadle

05/01/2018

Mortgage broker, Advance Mortgage Funding, must pay a former client more than £60,000 after an adviser provided unsuitable mortgage advice in 2009, the Financial Ombudsman Service has said.

In its decision the FOS said the client, Mrs M, used a loan to buy an overseas property with Harlequin with the intention of using the rent from the property to meet repayments.

The property was never constructed and Mrs M lost her money as a result. Advance Mortgage said it wasn’t required to give advice on the suitability of the investment but the FOS sided with the complainant.

Defending its decision, the FOS said the mortgage was not suitable for the situation

In a written final ruling on the case, ombudsman Sue Wrigley said she upheld the complaint because Mrs M she was not fully advised of the risks in repaying the mortgage.

Wrigley added: “Without the mortgage I don’t think Mrs M would have invested in the Harlequin property.

“She didn’t have any other savings or investments she could have used.

“So I think it’s more likely than not, that but for the unsuitable mortgage advice, Mrs M would not have invested in the overseas property and would not now be left with a mortgage she can’t afford to repay.”

The FOS said the only way to make the situation right is to put Mrs M in the position that had she never taken out the mortgage.

 

< Shakes head > FFS - how can the broker be held responsible for the property not being built?

[spyguy]

8 hours ago, ingermany said:

I think the easiest illustration would be an interest only mortgage where the lender has hit retirement still owing all the capital. Will argue that he should have been warned he will still be in debt after retirement,  with no means to service the debt without losing his house. Will argue he is out of pocket by an amount equivalent to the outstanding loan plus some of the interest owing. That's the argument the lawyers are making. Or it MEW has been used to leave the borrower with a big loan outstanding after retirement.  Argument is that the banks had a duty to stop the customer getting the loan. 

I recall a case in 2007 of an unemployed single mum who got a loan of 15k from NatWest for cosmetic surgery. She successfully argued that the bank should never have advanced her the money and she was compensated for the balance, interest and emotional distress. 

This could be about 2 million mortgages. 

Personal loans are regulated.

Mortgages, until very recently, were not.

In the boob case, the bank had a duty to check she could afford the repayment.

If shed took out an IO mortgage for 200k she have no come back.

Nuts ehh?

[spyguy]

8 hours ago, ingermany said:

And the Financial Ombudsman seems to be siding with borrowers.  Customer stupidity seems to be no defence. 

 

Broker must pay £60k over mis-sold interest-only mortgage - FOS

Written by Adam Cadle

05/01/2018

Mortgage broker, Advance Mortgage Funding, must pay a former client more than £60,000 after an adviser provided unsuitable mortgage advice in 2009, the Financial Ombudsman Service has said.

In its decision the FOS said the client, Mrs M, used a loan to buy an overseas property with Harlequin with the intention of using the rent from the property to meet repayments.

The property was never constructed and Mrs M lost her money as a result. Advance Mortgage said it wasn’t required to give advice on the suitability of the investment but the FOS sided with the complainant.

Defending its decision, the FOS said the mortgage was not suitable for the situation

In a written final ruling on the case, ombudsman Sue Wrigley said she upheld the complaint because Mrs M she was not fully advised of the risks in repaying the mortgage.

Wrigley added: “Without the mortgage I don’t think Mrs M would have invested in the Harlequin property.

“She didn’t have any other savings or investments she could have used.

“So I think it’s more likely than not, that but for the unsuitable mortgage advice, Mrs M would not have invested in the overseas property and would not now be left with a mortgage she can’t afford to repay.”

The FOS said the only way to make the situation right is to put Mrs M in the position that had she never taken out the mortgage.

 

Tiy gi ti a bank fior a mortgage.

You go to a broker for advice:

'Advance Mortgage Funding, must pay a former client more than £60,000 after an adviser provided unsuitable mortgage advice in 2009'

He's being fined for the bad advice not the bad mortgage.

 

Edited January 24, 2018 by spyguy

[macca13]

1 minute ago, spyguy said:

Personal loans are regulated.

Mortgages, until very recently, were not.

In the boob case, the bank had a duty to check she could afford the repayment.

If shed took out an IO mortgage for 200k she have no come back.

Nuts ehh?

Pisses me off.. why have I saved, why have I never had PPI, why did I not get a wreckless unaffordable mortgage.. why have I never claimed benefits..  I’m such a muppet.. I should be drowning in debt then everyone else could work to bail me out!! 

[chronyx]

 We live in a feelz based system. Those hoping for lawgic are sadly being too optimistic.  If logic/law do not fit the feelz then they will be altered or ignored as appropriate.  I guaran-******ing-tee you after a token struggle there will be pay outs.

[stop_the_craziness]

1 hour ago, macca13 said:

Pisses me off.. why have I saved, why have I never had PPI, why did I not get a wreckless unaffordable mortgage.. why have I never claimed benefits..  I’m such a muppet.. I should be drowning in debt then everyone else could work to bail me out!! 

The daily, no hourly loop of questions that go round and round and round in my head.

At the risk of sounding like a petulant child...........IT'S SOOOOOOOOOOOOOOO UNFAIR that sensible people get screwed over like this time and time again

[chronyx]

6 minutes ago, stop_the_craziness said:

The daily, no hourly loop of questions that go round and round and round in my head.

At the risk of sounding like a petulant child...........IT'S SOOOOOOOOOOOOOOO UNFAIR that sensible people get screwed over like this time and time again

No it's not a just outcome at all, but that's the reality we have at the moment. 

I wouldn't even call it unfair. It's theft and rigging the game.

These assholes hold all the cards and STILL have to cheat.

Edited January 24, 2018 by chronyx

[Exiled Canadian]

I could see the issue with PPI - it was added to the loan (clear loss for the punter), the terms were complex and hidden in the small print,  it was often sold to people (ie. the self employed) who would be unlikely to ever be able to make a successful claim and the profit margins for the banks we egregious.

But a "25 year interest only mortgage" - the clue is in the name for crying out loud!  It hardly takes a financial genius to figure out how that product is going to work.  Maybe we should just say that no one who can't pass a basic intelligence test (ie. walk without dragging their knuckles on the floor) can take out insurance or a loan.

 

[Kosmin]

12 hours ago, ingermany said:

I think the easiest illustration would be an interest only mortgage where the lender has hit retirement still owing all the capital. Will argue that he should have been warned he will still be in debt after retirement,  with no means to service the debt without losing his house. Will argue he is out of pocket by an amount equivalent to the outstanding loan plus some of the interest owing. That's the argument the lawyers are making.

 

12 hours ago, HowMuch! said:

how are they out of pocket, they have had the exclusive use of the property for the period... the equivalent rent should therefore be taken into consideration?

Good point.

Also they may have other options:

Postpone retirement.

Use pension to repay mortgage.

Let spare rooms.

[Democorruptcy]

This is partly about BOMAD, compensating some older people with houses have taken IO mortgages out to fund deposits:

http://www.housepricecrash.co.uk/forum/index.php?/topic/208447-more-mortgage-ageism-and-interest-only/

 

Banks have been fined under the Equality Act for refusing people mortgages past their retirement date

http://www.housepricecrash.co.uk/forum/index.php?/topic/208331-co-op-bank-ordered-to-pay-compensation-for-mortgage-ageism/

 

FCA reviewed IO in 2013

https://www.fca.org.uk/news/press-releases/fca-publishes-findings-review-interest-only-mortgages-and-reaches-agreement

 

 

 

[Funn3r]

3 hours ago, macca13 said:

Pisses me off.. why have I saved, why have I never had PPI, why did I not get a wreckless unaffordable mortgage.. why have I never claimed benefits..  I’m such a muppet.. I should be drowning in debt then everyone else could work to bail me out!! 

Same here I have lost out by not doing the above. If I have lost out then I should get compensated. I want compensation for not being given any bad advice by anyone.

[rantnrave]

28 minutes ago, Funn3r said:

Same here I have lost out by not doing the above. If I have lost out then I should get compensated. I want compensation for not being given any bad advice by anyone.

Quite.

A colleague is very open about the fact that she was hopeless at saving and spent from credit card to credit card... but has used all her PPI payments to finally accumulate a decent savings pot.

Grrrrr.

[chronyx]

1 hour ago, fru-gal said:

Then perhaps tenants can do the same? "We didn't realise taking on a tenancy meant paying rent for x number of months" .

When tenants "own" a propert they will be entitled to full feelz protection. But not before. Get your own safe space today with HTB 

[Diver Dan]

Compensation paid if it must be, but how about if the payee's credit rating gets "adjusted" for the rest of their life to indicate the level of potential risk to any future lenders they may approach?

If I were a financial institution, I'd want fair warning if a prospective mark customer were likely to come sniffing around 10 years later for a mistake that they made but is somehow my fault.

[Democorruptcy]

Funny how this coincides with SMI becoming a charge against the property?

[happyguy]

It could be a way of making broad house price drops more palatable to the masses, to allow banking to take place properly soon in future against a more sustainable housing market.

All at a controlled limited packaged one off cost to the banks.

 

 

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[macca13]

3 hours ago, Funn3r said:

Same here I have lost out by not doing the above. If I have lost out then I should get compensated. I want compensation for not being given any bad advice by anyone.

I had a loan  for a car when I was 18, man In Lloyd’s said I need PPI in case I lose my job.. I said if I lose my job I will just get another one. He then said I may be turned down for the loan unless I select it..  I said press the button on your computer and see what it says.. it said accepted.. ? 

Hence I don’t have PPI.. They were pushing PPI for sure. But asking me for an extra £80 a month to pay for it when they was 18.. no way.. that was beer money! 

[Funn3r]

1 hour ago, macca13 said:

I had a loan  for a car when I was 18, man In Lloyd’s said I need PPI in case I lose my job.. I said if I lose my job I will just get another one. He then said I may be turned down for the loan unless I select it..  I said press the button on your computer and see what it says.. it said accepted.. ? 

Hence I don’t have PPI.. They were pushing PPI for sure. But asking me for an extra £80 a month to pay for it when they was 18.. no way.. that was beer money! 

I am same way inclined but in the end it means no compo for me. 

I have a friend, this is totally true, he won his claim for PPI mis-selling, cant remember the exact amount but say they awarded him 1234.00 they then accidentally paid him 12,340.00 ! It was a lot more than my example numbers. He said nothing obviously.

[Diver Dan]

Not really mortgage mis-selling but related:

After having a trawl through the local property listings, I was struck by the number of descriptions which had things like "ideal buy-to-let opportunity", usually in places that would be lucky to buy you a round of drinks with your annual profit.

Could an EA describing somewhere as a good BTL be taken as financial advice and thus make the EA liable for mis-selling if/when it all goes pear-shaped for the hapless buyer?

[spyguy]

16 hours ago, Diver Dan said:

Not really mortgage mis-selling but related:

After having a trawl through the local property listings, I was struck by the number of descriptions which had things like "ideal buy-to-let opportunity", usually in places that would be lucky to buy you a round of drinks with your annual profit.

Could an EA describing somewhere as a good BTL be taken as financial advice and thus make the EA liable for mis-selling if/when it all goes pear-shaped for the hapless buyer?

I wonder that too. Not so much btl but 'ideal holiday let investment' near me.

I spent too much time with lawyers. Theyd never ok a bit of text that includes the word 'investment'. Theyd be ok with 'make an ideal holiday let' but not with 'investment' in it, as that implies some financial checking.

Edited February 3, 2018 by spyguy