Our core business is claims management and we are regulated by The Claims Management Regulator in respect of regulated claims management activities, registration number CMR 17779.
We have 25 years experience in compliance and packaging mortgages, both domestic and commercial, and have the ability to read files to assess for potential compensation and redress.
We will always request information from the lender/broker/mortgage club and/or service product supplier under Section 7 of the 1998 Data Protection Act and under the Consumer Credit Act 1974. Our audit methods for mortgage mis-selling are followed in accordance with MCOB rules and principles. We would expect to receive this information within the prescribed time allowed of 40 days from the date when requested.
A question to ask: “If you are one of the vast number of people who have been burdened with an unaffordable and inappropriate mortgage did you know that you may be entitled to compensation?”
It has come to light that thousands upon thousands of mortgages have been mis-sold to people by unscrupulous brokers and banks only looking to line their own pockets with lucrative commission and interest rather than providing a product that is suitable for their customers.
The Financial Conduct Authority recently highlighted this problem and has begun to crackdown on mortgage mis-selling.
In March 2009 a householder who had his home repossessed claimed that he had been mis-sold his mortgage. He took his case to the Financial Ombudsman Service and was eventually awarded £50,000 compensation. This case set a precedent and thousands of similar claims of mortgage mis-selling are expected to follow suit.
So whether you are a client with a couple of months payments in arrears or are being threatened with repossession NOW is the time to act. If it’s clear that you could never realistically afford to pay off your mortgage from the outset you will have a strong case for mis-selling.
Under Section 4.7 of the FCA’s rulebook for mortgage advisers, “Mortgage and Home Finance: Conduct of Business” (MCOB) it states that mortgage advice must be “suitable for that customer” and that advisers “must make and retain a record” of it being suitable.
Breaches of the MCOB rules are “actionable at the suit of a private person who suffers loss as a result”, under section 150 of the Financial Services and Markets Act 2000.
There are many grounds on which a client can claim that their mortgage may have been mis-sold. The crux of any claim will be that you were misadvised or professional negligence took place by whoever arranged your mortgage, i.e. a broker, IFA, Building Society or Bank. If you feel that you have been mis-sold your mortgage, the next step is to instruct us to freely appraise your mortgage agreement prior to a full audit and paper trail of the mortgage application from start to finish.
Listed below are some of the most common instances we investigate when mortgage mis-selling may have occurred. If you feel that you may have been mis-sold for a different reason then speak to one of our experts to see if they find you have valid grounds for a claim.
- Your mortgage is on interest only with no capital to repay the mortgage at the end of the mortgage term.
- Debt consolidation. Were you aware of the true costs involved in consolidating short term loans over a long term mortgage?
- Did you receive Mortgage Illustrations, Key Fact Features, Suitability of the Mortgage letter, Initial Disclosure Documentation, Statement of Demands and Needs, Statement of Pricing, complaints process, agent’s business card?
- Are you in negative equity and were you sold a 100% plus mortgage or loan?
- Were you told everything good about the product but not given any information about what would happen when interest rates go up
- Self certification. You were not asked to provide income, you were employed, a student or a casual worker when you applied for this mortgage, or you were advised to take out a self-certification even though you were not self-employed, so that you could borrow more.
- The mortgage runs past retirement age. Did you understand the implication that your mortgage payments would still need paying and would not reduce due to your being retired and was affordability discussed?
- Is the mortgage an equity release or lifetime mortgage with interest and charges rolling up?
- Were you advised to switch to another lender without being told of all the high upfront arrangement fees along with penalty charges that would actually make you worse off?
- Were the commissions paid to the broker by the lender fully explained to you? Were you requested to make any cash payments?
- Did you incur high penalty charges without understanding why these were added?
- Were you a council tenant who was advised to buy your council house without the lender undertaking an adequate assessment of your financial situation?
- Were you told to take out life assurance or Payment Protection Insurance with this mortgage and charged upfront for this product?
- Did you have to pay the broker a separate completion fee which was a percentage of the loan?
- Were you with a High Street lender and later switched to a sub prime lender?
- Have you had, or are you about to have, a property repossessed?
Before we make an official complaint to a broker or lender we will have to gather evidence to prove that the broker/lender’s advice and recommendations have issues and that the mortgage has been mis-sold.
We have set procedures, an application form, questionnaires and a statement available to complete in preparation for us to request the correct complaint information.
The FCA rules state that the advisor or mortgage broker “must make and retain a record” of the mortgage being suitable for you. In other words, the advisor or mortgage broker must provide information proving and substantiating that they advised you correctly and followed all the regulatory procedures in determining whether the mortgage was suitable for you.
We will request these records from the broker, quoting Section 4 onwards of the MCOB rules and principles. We will ask them to produce copies of all the advice given to you and supply evidence that they carried out a full fact find/client review of your needs and requirements which will include income/expenditure assessment. It was their job to make you aware of exactly what you would be paying and to tell you if you could realistically afford the mortgage or not. If they cannot supply evidence that they gave full and accurate advice then you may have strong grounds for a claim.
Once you are clear as to how the mortgage advisor or broker’s bad advice led you into paying for an unaffordable and inappropriate mortgage, we will challenge your advisor or lender and request they put you back into the position you were prior to taking out this contract.
It will probably be the case that the broker flatly denies all allegations of mis-selling. We do not give up there, however, as we will now be able to forward the claim to the Financial Ombudsman Service for an independent review, or select a specialist solicitor who will deal with the agreement and contentious law.
Our complaints and request for redress may be sent to the following regulators in challenging the lender and mortgage advisor against poor standards of advice and undiscovered breaches.
Internal auditing. Solicitors or Barristers Financial Conduct Authority (FCA) Office of Fair Trading (OFT) Financial Services Compensation Service (FSCS) Finance & Leasing Association (FLA)
If no reasonable solution has been reached after following the mortgage advisor or broker’s complaint process, they must issue a final response letter within the regulated and prescribed time period. We have 6 months in order to present our findings to the (FOS) Financial Ombudsman Service. They will then decide what action has to be taken by the broker and make their recommendations for redress. If the mortgage advisor, lender or broker has ceased trading and compensation is granted we will submit the claim to the (FSCS) Financial Services Compensation Scheme, if applicable.
The FOS is an independent body set up by the government to resolve disputes between financial companies and their customers and is free to use. We will gather all the previous correspondence relating to the complaint and follow the procedure set out by the FOS.
They will review your case independently and if they rule in your favour, the broker or lender will be obliged to compensate. If after all this you, the client, are still unsatisfied or if you are in any doubt at any stage you can always consider taking independent legal advice, or contact us for more information with regards to the mortgage if it has been mis-sold.