How are mortgages mis-sold?
Do you think you’ve been mis-sold your mortgage? Here’s how mortgages are missold.
11:29 16 October 2013
Individuals who have a stake in mis-sold mortgage claims are hot in pursuit of those responsible for their misery.
Claims management companies are having a field day with the deluge of prospective clients and are pushing to bring up the level of claims to litigation. The number of clueless borrowers who are coming forward to tell their sad stories are ever increasing and may well equal if not beat the uproar over the infamous PPI issue.
How could one be mis-sold a mortgage with eyes wide open?
If you acquired your loan through a broker, you will remember that no fees were charged to you. The broker gets his income from commissions from the financial company giving out the loan. It goes without saying that the larger the amount of the loan, the bigger the income that will be realized from the account and it is highly possible that the broker will point the client towards the direction of the mortgage type or the company where he can earn the most.
Even if you give your broker the benefit of the doubt that he has acted in good faith and that the mortgage he offered you was the only one that he had access to, it does not change the fact that broker did not act in your best interest. His only concern was to get your signature on the dotted line and get his commission, without analysing if it was the best type of mortgage for you and if you can afford to pay it in the long run, long after he has spent every penny of the commission earned from your account.
Your broker can talk you into accepting any of the following: endowment mortgage with a promise that this will cover the entire mortgage, a policy that will be fully paid after your retirement age, cash in your existing endowment in lieu of the one he is offering, debt consolidation, fixed rate mortgage, or subprime mortgage even if you have an excellent credit rating. In any case, if you accept any of the offers without full explanation or disclosure of the long-term consequences, then you may have been mis-sold a mortgage.