Missold A Subprime Mortgage?

30/04/2010 by Bradders.

With the recent spate of misselling scandals there’s a new kid on the block that looks likely to cause a major problem anytime soon. By now most people would have heard something, or someone involved with ppi complaints but this new misselling scandal will lift the lid on the dubious activities of some mortgage brokers and IFA’s.

These ‘professional ‘advisers abused the trust of their clients to recommend mortgages that were totally unsuitable and in many instances unaffordable. The long term financial suffering endured by their clients was immense and in some instances they have never recovered from it and have lost their homes as a consequence.

The Financial Services Authority (FSA) has been aware of this sharp practice for some time and has implemented measures to try and combat missold mortgages. In November 2004 new regulations were introduced to curb this malpractice and whilst worthwhile, the lure of high commissions proved too much for some and the sharp practice continued. It is these regulations that will establish if a mortgage has been missold and if proven to be the case the client will be entitled to compensation.

One of the major concerns regarding a missale is the fact that a lot of brokers were recommending mortgages that the client did not need to take but they were receiving high commissions from the lenders. A lot of these mortgages were designed for people with adverse credit and were always on a higher interest rate than those obtainable on the high street. It has also become apparent that borrowers were encouraged by the brokers to exaggerate their incomes and take out self cert mortgages.

They were also guilty of not giving best advice and encouraging their clients to borrow beyond their means. If you have a mortgage with one of these lenders that was recommended by your broker it might be well worth your while having a mortgage audit to assess if you have one of the thousands of missold mortgages.  

There are numerous reasons for a possible missale but firstly you need to have been sold the mortgage by a broker on or after the 1^st November 2004. Here are some of the obvious reasons for questioning missold mortgages. Did the broker charge a set up a fee? Did you self certify your income or were you encouraged to falsify income to obtain the mortgage·        Does the mortgage take you past retirement age· Was the mortgage arranged on an interest only basis with no repayment vehicle offered· Did you have any adverse credit issues when you applied for a mortgage· Were you already in financial hardship when you took out the mortgage i.e. CCJ’s,arrears· Were you repeatedly moved from one low start mortgage to another with the same lender incurring fees each time· Were you on state benefits or receiving a Government pension at the time you took out the mortgage?Due to the complexity of the mortgage market and the MCOB rules (laid down by the FSA) a mortgage audit will be required to prove if a missale has taken place. If this can be proven then thousands of pounds in compensation is due back to the borrower.If you have an inkling that you may have been missold a mortgage then now is a good time to get a mortgage audit to see if you could be claiming back thousands in compensation and getting your life back on track.

www.missoldmortgages.org.uk  

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