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Missold an Interest Only Mortgage?

Discussion in 'off topic' started by Minio, Feb 26, 2020.

  1. Minio

    Minio pfm Member

    Apparently Interest Only mortgages were sold prior to 2009 and compensation can be claimed.
    Does anyone know how such a basic product can be missold?
     
  2. Barrymagrec

    Barrymagrec pfm Member

  3. Ponty

    Ponty pfm Member

    Does exactly what it says on the tin!
     
  4. Darth Vader

    Darth Vader From the Dark Side

    Exactly. I have been looking at an interest only mortgage for my youngest.

    Cheers,

    DV
     
  5. deebster

    deebster Half Man Half Biscuit

    https://www.financial-ombudsman.org.uk/consumers/complaints-can-help/mortgages/interest-mortgages

    'If you have an interest-only mortgage, it's natural to be concerned about what might happen to your home if you can't pay off the capital when the mortgage term ends.

    If you've found yourself in a situation where you're not going to be able to pay off the mortgage, you might:
    • have asked your lender for more time or options to pay off the capital
    • think that interest-only wasn’t right for you in the first place
    • feel things weren't properly explained - either from the start, or during the mortgage term'
     
  6. gintonic

    gintonic 50 shades of grey pussy cats

    https://hoa.org.uk/advice/guides-for-homeowners/i-am-managing-2/interest-only-mortgage-compensation/

    I had an IO mortgage for some time, but I was mis-sold the repayment vehicle - which was an endowment policy which in reality would have never paid off the capital. I received compensation, cashed in the endowment, paid off a chunk of the mortgage and switched to repayment. I knew what an interest only mortgage was, but was given misleading advice on the ability of the repayment vehicle to repay the capital
     
    sam_cat, KrisW and sean99 like this.
  7. Ponty

    Ponty pfm Member

    We are fast becoming an incredibly weak society, where personal responsibility is not allowed. Everything that can possibly go wrong must be somebody else’s fault. It’s pitiful.
     
    Ellenor, Gaycha, Ginger and 7 others like this.
  8. gintonic

    gintonic 50 shades of grey pussy cats

    oh how perfect you must be. A post that lacks any sense of empathy....

    When you are in a situation and someone you trust tells you story about something you have an urgent need to acquire, and then the story is proven to be lie, then it is someone else's fault. Yes many buy with rose tinted spectacles but there are many crooks out there.
     
    camverton likes this.
  9. Ponty

    Ponty pfm Member

    There are crooks, without doubt. When you entered into your endowment, were you given a contractual guarantee that it would repay the capital after a specified time period?
     
  10. gintonic

    gintonic 50 shades of grey pussy cats

    the circumstances of the sale and/or performance of my endowment are none of your business. Anyway it was decades ago and matters not now.
     
  11. Bob McC

    Bob McC Living the life of Riley

    I had an interest only mortgage supported by an endowment policy that not only paid it off it left me with a healthy surplus.

    Things are not always what they seem.

    I doubt any were sold with guaranteed returns!
     
    Snufkin likes this.
  12. Ponty

    Ponty pfm Member

    Not interested in your details, but doubt there was a guarantee. People were ‘sold’ (i.e. didn’t have to buy) a potential financial upside. That appealed to many people. Unfortunately, if you want an upside, you must be prepared to accept a downside.
     
  13. Vinny

    Vinny pfm Member

    Endowment mortgages paying out/finishing before the late 70's/early 80's typically produced a surplus of ROUGHLY the capital due, so 50K capital due, 100K pay-out from the endowment. The actual cost was essentially the same as a repayment, but there was no termination bonus on a repayment mortgage.

    With low inflation and low interest rates, endowment mortgages became FAR more of a gamble since the 80's to the extent that there was a huge publicity campaign to inform people that they had become useful only for very few people - it was all over the press, radio and TV.
     
  14. gintonic

    gintonic 50 shades of grey pussy cats

    actually there was and it was contractual which is why I took the seller to court and won (despite him being a family friend).
     
  15. Ponty

    Ponty pfm Member

    Good stuff. Clearly, if it’s breach of contract, the law is on your side.
     
  16. Minio

    Minio pfm Member

    I had a repayment mortgage taken out in 2006 at a time when endowments had been discredited due to their underperformance.
    The only repayment vehicle I had was my salary which was sufficient to pay off the capital sum by 2017.

    I did find the constant warnings from the Building Society as to means of repayment to be very annoying.

    Can I claim compensation for being so annoyed!?
     
  17. Nero

    Nero BLACK BLACK BLACK BLACK BLACK

    I'm a bit peeved that I was not mis-sold anything, despite having an interest only mortgage, credit cards and personal loans over the years.

    It annoys me that pi11ocks who didn't read the small print are now claiming a fortune from PPI mis-selling. And ultimately, everyone has to pay for their ignorance.
     
    Snufkin likes this.
  18. camverton

    camverton pfm Member

    We ordinary folk need clever people like you standing guard outside every mortgage adviser ;).

    I remember buying my first house, went to a mortgage adviser who was recommended by a work colleague and experienced my first experience of high pressure salesmanship; nearly ended up with an endowment mortgage, but the next morning realised the disadvantages and ended up with a repayment mortgage at Abbey National. My next two houses were funded by interest only mortgages and were paid off by lump sum payments from salary when interest rates were reasonable and with the advantage of a buffer if interest rates shot up. It does require discipline to make the lump sum payments though.
     
  19. gintonic

    gintonic 50 shades of grey pussy cats

    I was also sold PPI for a car loan a long time ago. It was an interesting discussion but I did get some compensation. At the time I was doing my PhD and I was a research student, which meant I was not an "employee" (despite receiving funds from them in the form of a stipend) of the HEI and hence the PPI i paid for could never have been exercised as i was not employed. Interestingly had I been registered on a PhD programme as a research assistant I would have been an employee and the PPI sale would have been valid.

    When I signed the PPI deal it was not made clear, nor was the small print entirely clear that its validity hinged on being an employee.
     
  20. Thorn

    Thorn pfm Member

    If you go to a professional adviser for help in something that is beyond your ken, and he advises you to choose an option that is actually against your interests, but makes him the most money, then of course you must have be able to seek recompense for the money you have lost as a result of his dishonesty.
    And dishonesty is what mis-selling is all about.
     
    jonesi, Jamie and dweezil like this.

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