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Mis sold mortgages

The largest financial commitment that you will make in your lifetime is the mortgage you commit to, when purchasing your home.  All the main high street banks and building societies provide mortgages.

During the early 1990′s a number of American investment banks started to take a particular interest in the uk mortgage market.  However they weren’t interested in competing with the main high street banks for business as they saw this as largely less profitable.

They instead were looking for clients that failed to meet the main lenders criteria due to many numbers of reasons.  These included arrears on their existing mortgage, defaults, county court judgements or maybe even previous repossessions or bankruptcies.

This was the start of what was largely know as the sub prime market.  The interest rates charged were much higher. These lenders were faced with the problem of finding these customers so many of them relied on the services of mortgage brokers and mortgage packagers.

In 1997 mortgage lenders were required to adhere to the mortgage code and later in 1998 mortgage brokers also were required to adhere to the code.  The mortgage code remained in place until 31st October 2004 when the financial services authority(FSA) took over the regulation.

So with all these regulations in place what could go wrong?  The answer is plenty

Following the FSA taking over the one thing that would never openly admit was that they were out of their depth and understaffed, which many mortgage brokers soon realised.  This was the start of mis sold mortgages.

The rules set down by the FSA were called mortgage conduct of business sourcebook and all advisers had to follow them strictly and must always have customers bests interests at heart.

There are many reasons you could have a mis sold mortgage:

  • You had a good credit history but were given a sub prime mortgage
  • The mortgage you were given goes past your retirement age
  • You had proof of income but were given a self certification mortgage
  • You bought your council house through the right to buy scheme and were charged large fees which were added to the loan
  • You were advised to remortgage despite having to pay a redemption penalty
  • A remortgage was recommended to repay loans and credit cards
The above are only a few simple reasons, but to check if you have mis sold mortgages please complete the form below: