Mortgage Mis-selling
Mortgage mis-selling has become a popular issue of late. The Financial Services Authority has taken steps against banking institutions and advisers where mortgage mis-selling has become widespread. You may be thinking what is mortgage mis selling and how you are able to know if you’ve ended up a victim?
Mortgage mis-selling happens whenever a home loan is not explained properly to the buyer, or if a buyer is encouraged to take a loan that’s not suitable to their circumstances.
It is usually carried out by advisers who are more focused on selling what they really want to sell, rather than ensuring their clients end up with the best advice. The core of the issue is whether or not there was any misrepresentation of the mortgage you were applying for or how suitable it was to your needs.
Mortgage mis selling can easily be rectified and you could be eligible for compensation if you’ve been encouraged to accept a loan which ended up being undesirable to your needs.
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The Financial Ombudsman Service (FOS) has recently released data for mis-selling complaints for the previous six months for Banks, Building Societies and Specialist Lenders.
It focuses on the worst offenders in the market place, to make you aware of lenders who have performed badly. You can establish if you’ve been the victim of poor advice, either with your current lender or a previously lender, by completing the short questionnaire opposite.
Bank of Scotland were the worst offender in the past six months with 500 mortgage customers making a complaint. The Financial Services Authority have already launched a Treating Customers Fairlyset of rules to overcome these levels of mis-selling. With this high level of mis-selling complaints, it’s prudent to review your paperwork, and if you have any concerns, make a mis-selling enquiry immediately.
Barclays Bank came a close second to the Bank of Scotland with 473 complaints to the Ombudsman in the six month period. Santander (Abbey National) were the third worst offender for mis-selling complaints in the UK for the last 6 months with 434 complaints against them.
Mortgage mis selling complaints have increased for both residential home loans and other types of mortgages such as self cert mortgages, sub-prime lending, buy to let, right to buy and it’s expected to rapidly rise.
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In another mis selling case, the press reported a court case where the Financial Ombudsman Service (FOS) decided that a former home owner, whose house had been repossessed by his lender, had been mis-sold his home loan from the beginning. The judgment established a legal precedent that will stop repossession – when it can be demonstrated that the mortgage had been mis-sold.
The case hinged on regulations which referred to “suitable advice” for consumers, these were included in the FSA’s guide for brokers. The individual lost his house before the regulators judgment, yet he was granted damages as soon as it had been confirmed that the loan was mis-sold.
Several solicitors who’ve reviewed the case are confident that in long term, the “suitable advice” clause will be designed to avoid repossessions. The scandal of mortgage mis selling in the united kingdom has been revealed in a Citizens Advice report called Set up to Fail.
This document took it’s origin from customer complaints derived from Citizens Advice Bureau all around the United Kingdom. It revealed a large number of mortgage lenders and consultants were not making sure customers fully understood the potential risks of accepting the recommendation. The study also says in most cases, it appeared the banks didn’t look at whether or not the customer could pay for the mortgage repayments from the beginning.
