MSM - What You Need To Know About Mis-Sold Mortgages

MSM - What You Need To Know About Mis-Sold Mortgages

Mis sold mortgages are mortgages that require the borrower to pay more than necessary. There are ways to identify mortgage mis selling and get mortgage compensation

Watch out for bad information

The FSA fines firms that fail to follow the guidelines regardless of their reasons. The main reason why mortgage mis selling is so common is because lenders keep getting bad information about the clients so they don't properly assess the individual. Another reason why firms start dishing out loans without any regard for the guidelines is to ensure they manage to hit target goals even during low season. Compensation settlements from mis sold mortgage claims come from all types of financiers including banks, mortgage networks, building societies and individual brokers.

How they work

In case you are wondering if you were sold one of these mortgages, consider how the mortgage was issued. Were you sold a sub-prime mortgage? A sub-prime mortgage is designed to accommodate a specific kind of borrower, specifically one with bad credit. Individuals who do not qualify for a high street mortgage usually end up purchasing a sub-prime, which usually comes with higher interest rates and larger commission for the mortgage broker. Situations where the borrower has some sort of bad credit do in fact warrant a sub-prime mortgage, but if an individual qualifies for a regular mortgage and is anything less, then that could be considered a mis-sold mortgage.

So what are some of the factors that make up mis sold mortgages?

  • Cost: the mortgage was clearly unaffordable to the client when it was issued.
  • Unsuitable: this was the wrong type of mortgage for the client.
  • Wrong repayment plan: repayment method chosen was clearly the wrong type- eg, you don't want to risk your home but found out that you got an endowment, which happens to be linked to stock market performance.
  • Retirement lending: your retirement income does not allow you to clear the mortgage.
  • Sub-prime lending: you got a bad-credit mortgage even though you qualify for a 'high street' mortgage.
  • Interest only: you can only pay the interest and have no way to clear the actual mortgage.
  • Unreasonable fees: you were paying unreasonable fees and penalties on the mortgage then decided to switch lenders.
  • Overstated income: sometimes the broker advises clients to overstate their monthly income, but that only complicates the repayment plan.
  • Unfair treatment: quite a number of such mortgage claims are about unfair treatment so you can also pursue compensation if you feel you weren't treated well.

Take time to verify what the broker says

There are many more reasons why people get a bad mortgage so there is a possibility that yours warrants a claim. If you feel the broker gave you a hard sell on the mortgage plan, then take time to go through all the details just to make sure you got a good deal. The best move is to hire a Claims Management Company that specializes on mis sold mortgage claims because they know all the angles and can help expedite the process.

After an audit has been done and mismanagement has been unearthed, a claim can then be made for mortgage compensation. The rules exist to protect the interests of both the borrower and the lender, and borrowers need to know that the information they receive from the broker is accurate and that they can claim compensation if they feel they got bad information. It is highly recommended that borrowers not rush into buying a mortgage without properly evacuating the payment structure because a lot of such claims are a result of inappropriate advice about what they could or couldn't afford.