Professional negligence solicitors deal with compensation claims for mis-sold mortgages, assisted by qualified actuaries, barristers, financial advisors and insurance experts who work together as a specialist team to give advice and to settle claims. If the mis-sold mortgage compensation claim is unsuccessful for any reason most professional negligence solicitors operate the no win no scheme and will make no charge to you whatsoever. You will usually not be asked to fund or finance your mis-selling compensation claim in any respect. Most clients of professional negligence solicitors never pay any charges unless the mis-selling compensation claim is settled successfully. Professional negligence solicitors usually charge on an agreed percentage basis which must be put in writing prior to acting on a client’s behalf. If you would like to speak to a specialist about a mis-sold mortgage just contact an expert lawyer will usually discuss your potential mis-selling claim without any further obligation.
Categories of Complaint
To succeed in an application for mis-selling compensation it must be shown that the policy was mis-sold which in general terms means that the seller of the financial product either provided inadequate or misleading information or failed to obtain adequate information to ensure that the financial product was right for the person buying it. The basis of a mis-selling complaint is regarding whether proper financial advice was given and whether you were warned of charges and risks. The main categories of complaint for a mis-sold mortgage are as follows: –
Suitability of the mortgage: –
Your financial adviser should have made sure that the mortgage that was sold to you was the right one based on current and anticipated financial circumstances and the buyer’s attitude to risk given that the value of property may go down as well as up or may simply stagnate. Items which may indicate unsuitability include: –
failure to explain about the property market and the risks involved in investment in real property
failure to take into account your personal circumstances
failure to consider the effect of retirement on repayment ability
failure to advise that a mortgage is a long-term commitment and may attract penalties if cashed in early
failure to ensure that you were aware of stock market risks if you coupled your mortgage with an endowment policy
failure to explain fees and charges
failure to provide a document detailing fees and charges and their effect
failure to complete a personal fact-find
Policy Churning for Endowment Mortgages: –
If an adviser suggested cashing in an old policy and taking out a new policy, then he is guilty of ‘churning’ the only advantage of which is that the advisor receives a higher commission than he might otherwise have received if he sold just a top up policy. The effect of churning is to leave the client’s funds depleted.
A mis-sold endowment mortgage is defined as one that was not sold in accordance with the regulators rules which are intended to protect consumers of financial products and services from being misled or inadequately advised. The rules regulating the insurance industry are complex and a professional negligence solicitor can help by assessing whether the selling went against these regulations. The root of this problem lies in the fact that these insurance policies depend on the investment of monthly premiums by the life companies creating a sufficiently large fund to pay off the mortgage at the end of the term, however because of the underperforming Stock Market the majority of policies have failed to achieve this and as a result many homeowners have been left with little financial stability.
There are four main grounds which can result in a successful claim for mortgage mis-selling as briefly explained below:-
Was the insurance product suitable for you?
Your adviser should have made sure that this method of repaying the loan on the property was the best method for you depending on:
Your financial circumstances at the time
Your attitude to risk.
Listed below are some of the reasons why the mortgage may not have been suitable for you:
The financial advisor wrongly said that this method was guaranteed to pay off the mortgage.
Other options for repaying the mortgage were not discussed fully with you.
The advisor didn’t explain how your endowment would be invested and explain the risks involved.
The advisor didn’t explain that this method of repayment is a long-term commitment that gives a poor return if you cash it in early.
The advisor didn’t check you were comfortable with the risks of stock market investment.
The advisor should have explained that the amount you would get back depended on the performance of the stock market.
The sale didn’t follow the statutory rules
These are some of the reasons why the policy sale may not have followed the financial regulators rules
The adviser didn’t explain any fees and charges and how they affect the return you get on your savings.
You should have been given detailed product particulars including charges and cash-in values.
You should have been given detailed information regarding fees and charges and their effect over the longer term.
The advisor didn’t complete a full fact-find during the sales process.
Payments into retirement.
If your endowment mortgage and re-payment arrangements were set up to continue past your expected retirement age, your advisor should have checked that you would have enough income in retirement to continue to pay the mortgage and the premiums. If this wasn’t discussed or you were told not to worry because the insurance would pay off the mortgage before retirement, you have grounds to claim compensation.
Any endowment policy you held at the time your mortgage was recommended to you should have been used to back your loan. Any advisor who told you to cash it in, and then sold you another one to replace it, was guilty of ‘churning’. Not only is this appalling advice, it’s also against the rules and gives you grounds to claim compensation.
Professional Negligence Solicitors
Most endowment policies intended to be used to pay off mortgages have been mis-sold. Individuals who have lost out financially may be able to recover their losses by making a miss sold endowment mortgage claim against the seller if they are able to prove that they have suffered financially as a direct result. If you were not properly informed that your policy might be unable to pay off your mortgage at the time of sale, then you are justified in making a miss sold endowment mortgage claim. There are other potential grounds upon which compensation can be based and if you are in any doubt about your right to claim a professional negligence solicitor will usually give you free initial advice without further obligation. Most lawyers deal with endowment mortgage compensation claims on a risk free no win n o fee basis. You should not have to fund or pay for any expenses during the claim.
Mortgage fraud takes on a number of guises however the technique that most often defrauds members of the public and ultimately the lender relies on at least one dishonest professional person and frequently two or more to ensure that the mortgage fraud is long running and maximizes benefits for the criminal perpetrators. It is not unusual to see a solicitor or an estate agent or a professionally qualified value put behind bars for frauds amounting to millions of pounds. These scams are often not isolated events and may be in relation to large numbers of properties on estates or substantial blocks of flats providing a regular dishonest income for the mortgage fraud team.
The most common scenario that cheats the buyer of a property, most often a family home, relies upon an estate agent offering a property for sale at an inflated value which eventually attracts a naïve or inexperienced purchaser who relies on an over-valuation provided by a dishonest valuer who inflates the value of the property for mortgage purposes. The lender which is often a bank or a building society relies on the valuation and provides a mortgage loan for more than the property is worth which is then used to pay the dishonest seller who splits the profits with the estate agent, the valuer and the solicitor, who facilitates the transaction in the full knowledge that something isn’t right but who chooses to close his eyes for the sake of regular uninterrupted legal fees emanating from the scam.
All is usually well in a rising market as inflation takes account of the shortfall however in a falling or stagnant market matters come to the attention of the buyer when the property is subsequently put on the market for sale at a lesser value than anticipated. Generally speaking the new estate agent will advise the purchaser that they overpaid, or the lender will make enquiries about the shortfall when the loan is only partially paid off. If the cheated buyer defaults on the outstanding part of the loan, then the lender is also put at risk.