How Successful Are Mis-sold Mortgage Claims? Lenders and mortgage advisers must provide the right advice during the sales process so that you can make an informed decision. However, in many cases, financial advisors, lenders and brokers have failed to provide sound advice, leaving people with mortgages they cannot afford.
There is a significant number of mortgage owners who are unhappy with the way their mortgage has been presented to them and as such this could indicate an improper sale of the mortgage. The result of this was that people were left with mortgages they simply could not afford. The Financial Conduct Authority (FCA) had to intervene in 2004 because lenders and mortgage advisers were often guilty of these fraudulent mortgage sales.
Bad Buy Compensation is designed to put you in the same position you would have been in had you not been sold an inappropriate product. In other words, the compensation is calculated by comparing the financial position you are in now with the position you would be in if you had not sold the product in question.
Understanding Mis-sold mortgage claims
Buying a home is a big financial task, but it is also one of the best investment decisions you can make. Before buying a home, make sure you are in financial control. If you can afford it, an out-of-pocket purchase may be the most cost-effective way to buy a home. However, there are other financial options you can consider if you don’t have the means. For a significant amount of interest, many mortgage lenders are willing to help people realize their dreams of owning a home. However, the borrower must meet the bank’s loan requirements and criteria. This includes having a good credit score and a stable source of income.
Now the demand for mortgages has continued to rise in recent years. This can perhaps be attributed to the growing lucrative opportunities in the real estate industry. However, mortgages can be a bit confusing, and without prior knowledge and information you could be setting yourself up for a bad contract sale. Even with current mortgage regulations, it pays to read between the lines before putting your signature on the document. When it comes to responsible lending, lenders and mortgage lenders need to provide customers with the right information to help them make informed decisions. In this article, we’ll shed more light on mis-sold mortgage claims and what you can do if you’re affected.
What is mis-sold mortgage Claims?
Mis-sold mortgage claims can be defined, in layman’s terms, as receiving bad advice from mortgage lenders. This means that the mortgage lenders will not explain to the customer all the risks, the terms of the contract, the interest rates and the affordability of the mortgage. If you believe your lender has broken the rules and has been unwilling to explain some of these things to you, you may be eligible to seek compensation for a poorly sold mortgage through a financial ombudsman. With a good lawyer helping you with your poorly sold mortgage case, you may be able to receive compensation, which can help you get out of a difficult financial situation by following misguided advice from lenders and mortgage advisors. Here are some factors to consider when hiring a financial ombudsman:
- Many years of experience
- A good track record
- Positive customer reviews and testimonials.
- Extensive knowledge of banking, insurance and investment matters.
Most importantly, the consultancy should assess your circumstances and provide you with the best options before filing a claim.
Common Mis-sold Mortgage Claims Scenarios
Mortgages are perhaps the largest loans people commit to. That’s why it’s important to make sure you have the correct information before taking one. This way you have a clear plan to pay off the mortgage or find alternative means. But with the many mortgage products to choose from these days, it’s not uncommon to end up with the wrong deal. Let’s look at some common mortgage default scenarios. They contain:
Your suitability has not been properly assessed
As a result, you could end up with a mortgage that just wasn’t right for you. For example, you got an interest-only mortgage, but you didn’t think about how you were going to repay the principal, so you may be unable to pay a very large amount.
Your mortgage end date is after your retirement date.
If you agreed to a specific time limit to complete your mortgage and a longer term was chosen then you needed, it could be a poorly sold mortgage.
You were not told about the fee the adviser would receive from the lender
An example of this might be a counsellor telling you to switch mortgages, but failing to tell you that he would receive commission payments for doing so and may have been incentivized as a result. If the mortgage is not adequate, there may be a financial bad sale.
Advised to self-certify
This refers to a process in which you borrow the money for the house without proving your income, that is, without proving your ability to repay it, or in which you overstate your income to qualify to borrow more money.
If the mortgage broker does not review the individual’s self-certification, they will not have any real proof that they can meet the payments, which could amount to a mis-sale of the mortgage.
You were advised to change lenders and you were not informed of the fees and penalties
If you were not given a proper reason for the change, or if you were not aware of the costs involved, your mortgage advisor may be liable for a bad purchase. They must notify you of such charges and penalties.
If your lender, financial adviser or broker did not do the following when advising you on a mortgage, you may have been sold incorrectly:
We have not been able to reveal all the available options and the details of each one.
Failure to properly investigate your circumstances results in obtaining an improper mortgage.
There is also a growing concern that interest-only mortgages need careful thought; For example, if a person was forced to do this with little or no advice as to why, simply because the adviser wanted to take advantage of higher commissions, this could be a prime example of a deceptive sale that requires investigation and possible action.
Common Problems Due to Mis-sold Mortgage claims
The following problems often arise with improperly sold mortgages:
- High costs that you may not have known about before
- Bad interest rates
- Inability to pay the mortgage
Legal Basis for Mis-sold Mortgage Claims
Mis-sold mortgage claims can have serious implications and consequences for consumers, including paying large sums of money and hidden fees that overwhelm them in the long run. Before presenting your case to your attorney, you need to know whether or not you have a case. This saves you time and money. With that in mind, let’s take a look at the legal underpinnings of mis-sold mortgage claims.
1. Interest Only Mortgages
If your lender sold you an interest-only mortgage but didn’t mention that he’ll have to pay more in the long run, he’s likely been shortchanged. At first, interest-only mortgages sound attractive because most lenders advertise them as cheap. Well, that’s not exactly the case, especially now that the housing market is stronger and the demand for mortgages is higher. You should have been properly informed about the monthly payment requirements before taking out the mortgages.
2. Brokerage Commissions
Did you know about high brokerage commissions when you signed the mortgage contract? If not, you may have legal grounds to file an undersold mortgage claim. This is because they end up increasing your payments without you even knowing it.
Remortgaging has almost the same principles applied in debt consolidation. Some lenders may use this to trick borrowers into consolidating their debt into a mortgage. If this were the case, you were mis-sold. While you pay lower monthly rates, long-term debt will be more expensive due to higher interest rates.
4. Failure to perform a financial analysis
Before contracting a mortgage, you must present your annual accounts to demonstrate your income and expenses. However, if your lender did not conduct a conclusive analysis of your finances and proceeded to sign the loan, then they were reckless. This means that you unknowingly took out a mortgage and are now having trouble paying it off.
The Mis-sold mortgage claims process
If you are the victim of a mis-sold mortgage and you have the evidence to support your claim, the first step would be to seek help from experienced attorneys who are well-versed in such matters. They will ask you questions to better understand your situation and advise you on the way forward. After confirming you have a case, they will file your claim and make sure you get the compensation you deserve.
The average duration of missold claims cases is typically 12 months. But it’s important to note that cases of misleading claims vary in complexity, and the regulations and laws surrounding them can vary from state to state. Experienced lawyers will ensure that the person(s) or entities responsible for defrauding you at the time of signing the mortgage contracts properly compensate you for what you earn.
Finally, mis-sold mortgage claims are not a problem in most cases. However, this will largely depend on the lawyers you hire for the job. The advantage of these cases is that you don’t have to wait long to file a claim. The sooner you file the claim, the sooner you will know your options and receive your compensation. But the longer you wait, the harder it will be for you to pay the mortgage because of the extra fees and all.
What can I claim?
Each claim is different depending on the circumstances of the mis-sold mortgage, so the loss incurred as a result will also be different. So it’s hard to predict exactly what you’ll be able to claim, but in general, you’re entitled to be put back in your pre-missal mortgage settlement. This means you may be able to recover some of the money you lost while taking out the badly sold mortgage.
What deadlines are there?
When a financial product, such as a mortgage, is sold to you, you must file a fraudulent sale claim with a financial advisor within six years of the sale of the product, or within three years of the date, you learned of it.
You must also submit your complaint to the Financial Ombudsman Service, or the Financial Services Compensation Scheme, within three years of the event occurring or within three years of your first becoming aware of it.
How is the lawsuit funded?
Our professional negligence attorneys are happy to discuss fee options and advise clients on a wide variety of fee structures, including working under:
- An existing legal expenses insurance policy
- A fixed amount
- Traditional hourly rate holders, or
- A “no win, no pay” basis.
Frequently Asked Questions – How Successful Are Mis-sold Mortgage Claims?
How much will I receive if my claim is successful?
If you successfully claim a repayment from a lender, you can reclaim the interest and fees on your loans, plus the statutory interest rate of 8%.
What information should I provide?
You just need to provide the name of your lender and their details, including the address where you lived when you applied with them. Once you provide it, we can obtain details of any loans that may require repayment.
How much are they going to charge me?
Claiming through us is always on a no-win, no-win basis, meaning you pay nothing unless you win a fee. You have the right to cancel the agreement within 14 days without penalty. If you cancel after 14 days, you can be charged for the work up to the moment of cancellation. We use multiple partners to ensure we can make claims against all lenders from whom we receive payments. The exact cost structure depends on the lender you are claiming against, as they decide which of our partners is best suited for your claim. An overview of our fee structure can be found here. Fees for diesel emissions claims are calculated differently because it is a class action lawsuit.
Conclusion – How Successful Are Mis-sold Mortgage Claims
If you have been let down by an expert and want to learn more or start a professional negligence claim, call professional negligence attorneys.
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