thefinalbear Posted April 8, 2008 Share Posted April 8, 2008 (edited) Taken out a mortgage in the last few years at a nice teaser rate of 4% (or less). Used a mortgage adviser? - Did your adviser stress test your income levels for potential higher rates (like they should have done)? - Did your adviser recommend a short term deal given that you 'could always remortagge again later'? If the answer to these two questiosn is No & YES (respectively). Get ready to collect. http://www.moneymarketing.co.uk/cgi-bin/it...hpr&f=pnfpr Edited April 8, 2008 by thefinalbear Quote Link to comment Share on other sites More sharing options...
thecrashingisles Posted April 8, 2008 Share Posted April 8, 2008 http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=161415 Editor's view: Ombudsman o'clock for mortgage market John Lappin - 18-Mar-2008 Tick. Tock. It’s ombudsman o’clock for the mortgage market. The principal ombudsman Tony Boorman is making noises that sound very like he is envisaging a new ombudsman-led review of the mortgage market. No, no, no, say all the regulator’s men - and women - both at FOS and FSA. This is not a review. Reviews are done by the FSA - as in the pensions review. Gulp! But I would argue it risks becoming the endowment situation all over again, complete with scapegoating of distribution certainly if the sums involved are large enough to attract claims chasers. If they can, they will use their marketing muscle and in the worst cases, sharp practices, to get the compensation bandwagon rolling again. For those in doubt about the havoc that may be wreaked I think it is worth quoting a big chunk of Mr Boorman’s speech. Last week, at the CML complaints handling seminar, he said: “If media comment is any guide, we might expect to see a significant number of consumers raising concerns that their lender (or intermediary) should not have assisted them to borrow so much - so called unaffordable lending. “I have to say this is not a conclusion the ombudsman will reach lightly. The consumer knows their own financial circumstances, and if the costs of the mortgage are clearly explained, they should be readily be able to assess how affordable that mortgage is for them. “However, in practice, matters are not always as clear-cut as this suggests. We see cases where I find it difficult to imagine how the lender could have considered the customer capable of maintaining the required level of payments. Rather it seems that the advice has been more about generating commission or fee income than a fair assessment of the interests of the customer. As you know the FSA’s rules require the lender to take into account the customer’s ability to repay the mortgage - with the presumption being that the customer will need to meet the repayments from income.” “In such cases, the ombudsman will seek to put the consumer back into the position they would have been in, if the poor mortgage advice hadn’t been given in the first place." Quote Link to comment Share on other sites More sharing options...
thefinalbear Posted April 8, 2008 Author Share Posted April 8, 2008 As a aside. Professional Indemnity cover for mortgage brokers has risen by over 500% in some cases on renewal. Quote Link to comment Share on other sites More sharing options...
thefinalbear Posted April 8, 2008 Author Share Posted April 8, 2008 Wonder who the insurers are that are holding mortgage PI risk in the UK? Quote Link to comment Share on other sites More sharing options...
fluffy666 Posted April 8, 2008 Share Posted April 8, 2008 Taken out a mortgage in the last few years at a nice teaser rate of 4% (or less).Used a mortgage adviser? - Did your adviser stress test your income levels for potential higher rates (like they should have done)? - Did your adviser recommend a short term deal given that you 'could always remortagge again later'? Most important: - Did your adviser reccomend an interest only mortgage for anything but short term or specialist purposes? Quote Link to comment Share on other sites More sharing options...
thefinalbear Posted April 8, 2008 Author Share Posted April 8, 2008 Most important:- Did your adviser reccomend an interest only mortgage for anything but short term or specialist purposes? Yeah....there are more too... - Did your adviser recommend the best possible deal available at the time? - Did they recommend taking out mortgage payment protection insurance (if you get made unemployed) - Did they document all their recommendations? It will be messy - thats for sure. Quote Link to comment Share on other sites More sharing options...
right_freds_dead Posted April 8, 2008 Share Posted April 8, 2008 what a mess. i hope both sides spend thousands on legal fees and still dont get anywhere. i like how the banks have this good stop gap between their products and the 'retailers' of their products. can we sue the daily express for saying houses were set to double in next 10 years. or can we sue location location ? if some sue and win, does that mean the rest have to give back the capital gains on their houses ? cant have it both ways. Quote Link to comment Share on other sites More sharing options...
thefinalbear Posted April 8, 2008 Author Share Posted April 8, 2008 i like how the banks have this good stop gap between their products and the 'retailers' of their products. For sure. Its by design. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted April 8, 2008 Share Posted April 8, 2008 (edited) cant see a claim working, There was a form to fill in, questions about salary to be answered, legal docs to be signed, fees to be paid. If there was misselling it was on both sides of the table. Clearly the banks checked every one of the apps as we have no subprime in the UK. Of course the question of compensation is raised. Will the bank point out the man who bought in 2003, with an "affordable" loan, but sold in 2007 with a cash bundle? Course they will. And if you got a fixed rate for 2 years, you signed that you would either leave the scheme or go on variable rate. And what about cash backs? is the punter going to hand it back? No. No more chance of this flying than the Spruce Goose Edited April 8, 2008 by Bloo Loo Quote Link to comment Share on other sites More sharing options...
tommyboy Posted April 8, 2008 Share Posted April 8, 2008 does this relate to http://www.mfgonline.co.uk/mortgages/13914..._and_lender.htm as far as i remember, the new rules come into place aprill 2008 could be carnage Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted April 8, 2008 Share Posted April 8, 2008 does this relate tohttp://www.mfgonline.co.uk/mortgages/13914..._and_lender.htm as far as i remember, the new rules come into place aprill 2008 could be carnage No, the FSA regulate mortgages, they are not covered by the consumer credit acts Quote Link to comment Share on other sites More sharing options...
thefinalbear Posted April 8, 2008 Author Share Posted April 8, 2008 Clearly the banks checked every one of the apps as we have no subprime in the UK. You might be surprised. And if you got a fixed rate for 2 years, you signed that you would either leave the scheme or go on variable rate. Point being that a mortgage adviser (not the bank BTW) should have looked into every possibility based on client circumstances. Affordability is just one of those. And it shoud all be documented. Many mortgage brokers will have done this and there will be plenty that have no valid claim, some that committed mortgage fraud etc.....but there will be enough who have been misled to make it an issue over the years to come. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted April 8, 2008 Share Posted April 8, 2008 You might be surprised.Point being that a mortgage adviser (not the bank BTW) should have looked into every possibility based on client circumstances. Affordability is just one of those. And it shoud all be documented. Many mortgage brokers will have done this and there will be plenty that have no valid claim, some that committed mortgage fraud etc.....but there will be enough who have been misled to make it an issue over the years to come. any idea whats happening in the US? So a buyer ti have taken out a mortgage on 2 year would have to prove that the broker told them mortgage rate wont go up, and if it did they could change. That doesnt make sense as every body would know that interest rates are competive and if one goes up or down the others wuold follow. I think a case would behard to prove Quote Link to comment Share on other sites More sharing options...
thefinalbear Posted April 8, 2008 Author Share Posted April 8, 2008 any idea whats happening in the US? They have an unregulated mortgage market So a buyer ti have taken out a mortgage on 2 year would have to prove that the broker told them mortgage rate wont go up, and if it did they could change. Most of the burden of proof lies with the broker That doesnt make sense as every body would know that interest rates are competive and if one goes up or down the others wuold follow. Again......you would probably be surprised. I think a case would behard to prove Each case will be different. But time will tell if it will be a big isue or not. There will definately be some people who will have been taken to the cleaners and will deservce some formof comp - I guess we'll see what happens. Quote Link to comment Share on other sites More sharing options...
Gone baby gone Posted April 8, 2008 Share Posted April 8, 2008 what a mess. i hope both sides spend thousands on legal fees and still dont get anywhere. You are a barrister and I claim my £5. Quote Link to comment Share on other sites More sharing options...
Rod Hulls Roof Posted April 8, 2008 Share Posted April 8, 2008 Prior to October 2004, mortgages were not regulated by the FSA. So the FOS won't look at these. As for post regulation cases, they would all have been issued with KFIs with explicit "what happens if" warnings. Whilst I can see a few of the more "exotic" self cert complaints getting some traction, the vast majority of complainants will correctly be turned down. Quote Link to comment Share on other sites More sharing options...
thefinalbear Posted April 8, 2008 Author Share Posted April 8, 2008 Prior to October 2004, mortgages were not regulated by the FSA. So the FOS won't look at these.As for post regulation cases, they would all have been issued with KFIs with explicit "what happens if" warnings. Whilst I can see a few of the more "exotic" self cert complaints getting some traction, the vast majority of complainants will correctly be turned down. Dont underestimate the political pressure that can be brought to bear by a bunch of angry current and former homeowners. The rules of the game can always change. Quote Link to comment Share on other sites More sharing options...
thefinalbear Posted April 8, 2008 Author Share Posted April 8, 2008 As for post regulation cases, they would all have been issued with KFIs with explicit "what happens if" warnings. Read them again......they're not as watertight as you think. Quote Link to comment Share on other sites More sharing options...
Daft Boy Posted April 8, 2008 Share Posted April 8, 2008 Dont underestimate the political pressure that can be brought to bear by a bunch of angry current and former homeowners. The rules of the game can always change. ...and of course they will mostly be bankrupt by then and entitled to free legal aid Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted April 8, 2008 Share Posted April 8, 2008 TsnipThere will definately be some people who will have been taken to the cleaners and will deservce some formof comp - I guess we'll see what happens. Like everybody who was priced out??? thats where the real damage lies IMHO Quote Link to comment Share on other sites More sharing options...
Rod Hulls Roof Posted April 8, 2008 Share Posted April 8, 2008 Read them again......they're not as watertight as you think. On the contrary, they're about as watertight as you can get. A section in the KFI points out what would happen if rates go up by 1%, and then in big letters underneath this is normally states "Rates may increase by much more than this so make sure you can afford the monthly payment". This risk warning was designed by the FSA, and has been on every regulated mortgage illustration and mortgage offer. For a claim to succeed, then the FOS is effectively going to have to say say that this risk warning is inadequate. Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted April 8, 2008 Share Posted April 8, 2008 snip For a claim to succeed, then the FOS is effectively going to have to say say that this risk warning is inadequate. thinking about health and safety claims, it appears if they didnt tattoo the warnings to inside of the borrowers eyelids, then they may well be judged inadequate. Quote Link to comment Share on other sites More sharing options...
thefinalbear Posted April 8, 2008 Author Share Posted April 8, 2008 A section in the KFI points out what would happen if rates go up by 1%, and then in big letters underneath this is normally states "Rates may increase by much more than this so make sure you can afford the monthly payment". Now read the suitability letter that you got with the KFI. Quote Link to comment Share on other sites More sharing options...
Carrington Posted April 8, 2008 Share Posted April 8, 2008 cant see a claim working, There was a form to fill in, questions about salary to be answered, legal docs to be signed, fees to be paid.If there was misselling it was on both sides of the table. Clearly the banks checked every one of the apps as we have no subprime in the UK. Of course the question of compensation is raised. Will the bank point out the man who bought in 2003, with an "affordable" loan, but sold in 2007 with a cash bundle? Course they will. And if you got a fixed rate for 2 years, you signed that you would either leave the scheme or go on variable rate. And what about cash backs? is the punter going to hand it back? No. No more chance of this flying than the Spruce Goose I have to agree with you here bl, the disclosure documentation, fact finds kfi's etc that brokers have to go through in order to give an accurate assessment of a clients needs and requirements and affordability are pretty intense and the validation of these will have been signed by the clients - this is not to say that there are brokers out there who are not committing mortgage fraud, there are always a few bad apples in every profession and if legislation comes out to help eliminate these people then great, it will make my job much easier. With regard to subprime, there are mortgages available at the moment for adverse credit clients, in fact i am just processing one at the moment, but the requirements to acquire one of these mortgages is far different from the usa -you are required to place a deposit of at least 10pct, whereas in the us lenders were lending 100pct mortgages to people who were practically bankrupt! best regards Carrington Quote Link to comment Share on other sites More sharing options...
thefinalbear Posted April 8, 2008 Author Share Posted April 8, 2008 have to agree with you here bl, the disclosure documentation, fact finds kfi's etc that brokers have to go through in order to give an accurate assessment of a clients needs and requirements and affordability are pretty intense and the validation of these will have been signed by the clients I do agree that the majority of brokers did a good job and gave good recommendations. Their clients will have no cause to complain. But there will also be plenty that cut corners and/or gave bad advice. Quote Link to comment Share on other sites More sharing options...
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