Borrowers who had an adverse credit rating resulting from a CCJ, mortgage arrears or other default were often sold sub-prime mortgages by mortgage brokers.
The products often had hefty fees and high reversion rates as well as heavy redemption penalties. It was common for borrowers to feel that because they had a poor credit rating, a sub-prime mortgage was their only option.
Mortgage brokers selling these products were rewarded with large commissions or procuration fees by the lenders. These products were often mis-sold as borrowers may have qualified for more appropriate products that they could have obtained from high street lenders at a lower rate.
Self-certification mortgages were also mis-sold to borrowers who were able to verify their income. Brokers pushed this product as they received high procuration fees and also because of the speed at which the product was sold as lenders did not make the usual checks on a borrower’s status. Instead, borrowers were advised by mortgage brokers, to self-certify and in some cases inflate their income in order to qualify for a mortgage.
Other reasons that the advice that was given to you at the time you took out your mortgage may have been unsuitable are:
- Borrowers were advised to take a mortgage beyond retirement with no real means to continue to repay it.
- There was a real lack of clear advice in relation to interest only mortgages about having a plan in place to repay the mortgage amount at the end of the term.
- Mortgage products where the initial rating period did not suit the borrower’s individual circumstances were offered.
- There were instances of failure to offer borrowers a range of mortgage products and provide assistance in deciding which was best for their individual circumstances.
- Excessive fees may have been charged by the broker.
- The broker failed to carefully assess the borrower’s ability to pay the mortgage in the future after the initial rate expired.
Even if the company that advised you to take out your mortgage is no longer in business, the Financial Services Compensation Scheme (FSCS) may cover you.
This scheme was set up to provide compensation for customers of companies who cannot pay compensation. If your policy was taken out on or after 1st November 2004, then you may be covered by this scheme.
What Can You Do To Reclaim Mis-Sold Mortgages?
You can either, claim on your own or you can use a specialist like CMP to help. We can’t guarantee a pay-out for you or get more money than you would if you claim on your own, or that we can handle the claim faster.
What we can guarantee is a professional, straight forward, honest service which is hassle free for you. We will use our knowledge and specific expertise to ensure your claim has the best possible chance of being successful. For our contact details, click here and get in touch with us now.
Specifically Mis-Sold an Endowment or Pension Mortgage?
Who Pays The Compensation?
Most of the cases we represent are presented to the Financial Services Compensation Scheme (FSCS) in a bid to reclaim money lost by investors who suffered negligent advice or were unaware of the full facts before making their investment.
The FSCS is a free service, therefore you can make a claim for compensation yourself.
The FSCS protects consumers when financial services firms fail or go bust. It’s the compensation scheme for customers of UK authorised financial services firms and is often referred to as the fund of last resort for individual investors.
FSCS protects the following:
- Investment business,
- Home finance (for business from 31 October 2004),
- Insurance policies, and
- Insurance broking for business from 14 January 2005. We also protect connected travel insurance where companies such as travel firms and holiday providers sell the policy alongside a holiday or other related travel for business from 1 January 2009
The FSCS has set compensation limits dependent on when the firm you are claiming against was declared as in default:
- Up to £85,000 for firms which failed after 1st April 2019
- Up to £50,000 for firms which failed between 1st January 2010 – 31st March 2019
- Up to £48,000 for firms which failed prior to 1st January 2010
What If The Firm Is Still Trading?
If the broker or your advisor is still trading any complaint must be made directly to the firm. There are regulatory procedures and timeframes the firm must adhere to when dealing with any complaint.
If you are unhappy with the final decision your complaint can be referred to the Financial Ombudsman Service (FOS).
If you are unsure whether you have valid reasons for a complaint to the firm call a specialist today and we will quickly establish if there is basis for a claim. For contact information please click here