Mis Sold Mortgages
In 2004 mortgages became regulated by the Financial Services Authority under a strict set of rules called the Mortgage Code of Business (MCOB). This code detailed a strict process for recommending and providing advice.
Mortgage advice given to consumers by advisers must comply with the statutory principles of Treating Customers Fairly (TCF). This aims to help customers fully understand the features, benefits, risks and costs of the financial products they buy. It also aims to minimise the sale of unsuitable products by encouraging best practice before, during and after the sale.
The legislation makes the following very important statement – “A firm must pay due regard to the interests of its customers and ‘treat them fairly’”.
Channel 4 News on the subject of Mis-sold Mortgages
A spokesman for the Financial Services Authority (FSA) on the subject of mortgage brokers giving bad advice and mis selling mortgages said, “We found some willing to offer mortgages they know to be unaffordable and to accept self cert business even when they had concerns that the financial information provided by the customer was implausible. These practices are completely inconsistent with treating customers fairly.”
In particular the sale of Sub Prime mortgages has caused particular concern for the FSA. These include the following lenders:
Accord, Abacus, Advantage, Mortgages PLC, Kensington, GMAC, GE, Platform, Preferred, Rooftop, SPML and Future Mortgages
How do I know if I was mis-sold my mortgage?
The following are just some examples of why the advice given to you may not have been suitable:
- Borrowers who are advised to self-certify their incomes and possibly inflate incomes to qualify for a mortgage.
- The broker has failed to take due care in assessing the borrower’s future ability to pay the mortgage after the initial rate expires. This is referred to as ‘payment shock’
- Applicants who were advised to take a mortgage term beyond retirement with no ‘real’ means to repay
- Lack of clear advice on having a repayment plan in place to repay the mortgage at the end of the term when recommending an Interest Only mortgage.
- Offering mortgage products where the initial rating period (i.e. fixed, discount etc) does not suit the borrower’s individual circumstances
- Failure to offer borrowers a selection of mortgage products and not assisting in the decision process
- The broker charging excessive fees. The guidelines suggest that the broker should be remunerated in proportion to the amount of work needed to finally place the mortgage
- Failure to fully explain early repayment penalties (if applicable) when borrowers leave their current lender
- The broker recommending a full remortgage with a new lender when a further advance from the borrower’s current lender would have been more appropriate (and probably cheaper)
What to do next
In order to identify if your mortgage was mis-sold, expert analysis of the sale and all documentation is required. We have a specialist team with years of experience in the mortgage market waiting to take your call.
Everything we do is on a No Win No Fee* basis with nothing to pay upfront. If we win your claim, we simply take 25% (plus Vat) of your final settlement.
Remember, it doesn`t matter if you no longer have the mortgage, you can still claim.
If you feel you may have been mis-sold a mortgage, call us today!
*Please note that if you cancel your claim after our 14 day cooling off period, a cancellation fee may be payable. Please see our Terms & Conditions.