Between 1998 and 2007, house prices in the United Kingdom rose dramatically, generating large increases in home equity for many homeowners but also making housing unaffordable for other people. Between 2002 and 2007, house prices in the UK rose by 90%, faster than any Eurozone nation except Spain.
Mortgage lenders weren't at any risk of making losses on the money that they gave to their customers. Many lenders therefore made it very easy for the borrowers to get mortgages without considering their credit, employment or financial status.This is the reason why sub-prime mortgages became very easy to obtain. There are some instances that mortgage lenders were accepting up to 125% of the value of a property and some that were more than ten times what the customers earn every year.
The commissions that the advisers were collecting were also much higher than those obtained but their high street counterparts. This is what caused an abuse in the mortgage industry. What followed was the mis-selling of mortgages to innocent customers who wanted to own property. The drive behind it was the high commissions mostly offered by the sub-prime mortgages. The mortgage advisers are recognized professionals and they are regulated by FSA almost the same way as accountants and solicitors are regulated. This means that the advice given by the advisors has to follow some statutory principles that are geared towards the fair treatment of customers. The rules have been put in place by FSA in the type of mortgage advice that should be given meaning that the customer must be aware of the benefits, risks, features and the total costs.
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| Mis-Sold Mortgages - Fact Or Fiction? |
So what is a mis-sold mortgage
A mortgage that wasn't sold to a customer in the right manner is what is referred to as a mis-sold mortgage. This can either be because the borrower didn't get the best advice from the lender, or because they were not given correct information and felt cheated into accepting a product that wasn't ideal for them. This has led to steep increase in the number of consumers not being able to make the monthly payments for the mortgage because of their financial situation.
The reason for mis-selling mortgages
There are numerous reasons as to why the mis-selling of mortgages occurs. The major reason is that the brokers or the lenders wanted to gain more money without taking into consideration the financial situations of their customers. In some cases the brokers were themselves barred from accessing some mortgages that were also available this means that the brokers weren't qualified to sell mortgages to everybody. These are clear indications that the brokers were also not in the best position to find the ideal mortgages for all the customers.
Determining whether your mortgage was mis-sold.
There are many things that can tell whether your mortgage was mis-sold or not. The main thing to take a look into is whether you can afford the monthly repayments of the mortgage. This will tell whether your advisor ensured that you will be able to afford them or not. You should also determine if you will still be paying the mortgage even after retiring yet you don't have an extra source of income to assist you in keeping up with the repayments.
You can also know if your mortgage was mis-sold if you took a mortgage with a fixed rate but the person advising you didn't tell you about the payments being increased when the fixed term comes to an end. If you went for an interest only mortgage that is based on the reduction of monthly payments then the mortgage was mis-sold. The same also applies if you took an interest only mortgage but then you can't find a way of repaying it after the term comes to an end or you weren't made aware of it. Your advisor should have recommended a self-certification mortgage when he was aware that you are unable to prove your income or that self-certification is not necessary to you, this means that the mortgage was mis-sold. The same also applies if they sold you a sub-prime mortgage yet you had not credit problems previously. In case you re-mortgaged with the aim of clearing the debts that exist and you weren't informed of the possibility of having to pay more within the same term or that the debts could be used as security against your home.
The major cause of mis-sold mortgage is the wrong assessment of customers by brokers and lenders. This led to the giving of poor advice and poor mortgages that leave the customers in poor financial situations than they were in at the beginning.
Are you entitled to compensation?
The answer is yes. If you think that you didn't get the best deal on the mortgage that you have and that you are really struggling to make the monthly repayments or you thing that the lender or the broker didn't stick to the FSA then you have a right to make a claim. The compensations will not only be made for the amount that you have already lost but also for what you might lose in the future. In case you have a Right to buy, interest-only, self-certification or sub-prime mortgages then there are high chances that they are mis-sold. In addition if you thing that you will still be paying the mortgage even after you retire then there is a high probability that you are entitled to a claim.
A mortgage that wasn't sold to a customer in the right manner is what is referred to as a mis-sold mortgage. This can either be because the borrower didn't get the best advice from the lender, or because they were not given correct information and felt cheated into accepting a product that wasn't ideal for them. This has led to steep increase in the number of consumers not being able to make the monthly payments for the mortgage because of their financial situation.
The reason for mis-selling mortgages
There are numerous reasons as to why the mis-selling of mortgages occurs. The major reason is that the brokers or the lenders wanted to gain more money without taking into consideration the financial situations of their customers. In some cases the brokers were themselves barred from accessing some mortgages that were also available this means that the brokers weren't qualified to sell mortgages to everybody. These are clear indications that the brokers were also not in the best position to find the ideal mortgages for all the customers.
Determining whether your mortgage was mis-sold.
There are many things that can tell whether your mortgage was mis-sold or not. The main thing to take a look into is whether you can afford the monthly repayments of the mortgage. This will tell whether your advisor ensured that you will be able to afford them or not. You should also determine if you will still be paying the mortgage even after retiring yet you don't have an extra source of income to assist you in keeping up with the repayments.
You can also know if your mortgage was mis-sold if you took a mortgage with a fixed rate but the person advising you didn't tell you about the payments being increased when the fixed term comes to an end. If you went for an interest only mortgage that is based on the reduction of monthly payments then the mortgage was mis-sold. The same also applies if you took an interest only mortgage but then you can't find a way of repaying it after the term comes to an end or you weren't made aware of it. Your advisor should have recommended a self-certification mortgage when he was aware that you are unable to prove your income or that self-certification is not necessary to you, this means that the mortgage was mis-sold. The same also applies if they sold you a sub-prime mortgage yet you had not credit problems previously. In case you re-mortgaged with the aim of clearing the debts that exist and you weren't informed of the possibility of having to pay more within the same term or that the debts could be used as security against your home.
The major cause of mis-sold mortgage is the wrong assessment of customers by brokers and lenders. This led to the giving of poor advice and poor mortgages that leave the customers in poor financial situations than they were in at the beginning.
Are you entitled to compensation?
The answer is yes. If you think that you didn't get the best deal on the mortgage that you have and that you are really struggling to make the monthly repayments or you thing that the lender or the broker didn't stick to the FSA then you have a right to make a claim. The compensations will not only be made for the amount that you have already lost but also for what you might lose in the future. In case you have a Right to buy, interest-only, self-certification or sub-prime mortgages then there are high chances that they are mis-sold. In addition if you thing that you will still be paying the mortgage even after you retire then there is a high probability that you are entitled to a claim.
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| Mis-Sold Mortgages - Fact Or Fiction? |
How you can make a mis-sold mortgage claim
Of course you can always make a claim yourself and have very right to do so. However, a note of caution! Unlike PPI, claims for mis-sold mortgages can be complex and time consuming. A reasonable knowledge of the mortgage market is required as is a lot of patience. Claims of this type tend to take 6-8 months to complete.
Of course you can always make a claim yourself and have very right to do so. However, a note of caution! Unlike PPI, claims for mis-sold mortgages can be complex and time consuming. A reasonable knowledge of the mortgage market is required as is a lot of patience. Claims of this type tend to take 6-8 months to complete.
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