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‘A good number of interest-only mortgages were arguably mis-sold’ – Star Letter 06/04/2018

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  • 06/04/2018
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‘A good number of interest-only mortgages were arguably mis-sold’ – Star Letter 06/04/2018
Mortgage Solutions and its sister title Specialist Lending Solutions select the most thoughtful or thought-provoking comment as Star Letter.

This week the accolade goes to Andy Wilson for his response to the post: Interest-only mortgages are the next mis-selling scandal, legal tech firm claims – analysis.

 

He said: “I would agree that a good number of interest-only mortgages were arguably mis-sold, and I have seen many cases where I would support a complaint. An example is an 80-year-old widow I saw last month who has a £34,000 mortgage coming to the end of its term in three years’ time.

 

“She had never worked and was already drawing a meagre pension when the loan was arranged. She had no way of paying off the mortgage when the term ended and the property value means downsizing is unrealistic.

 

“I can’t help her to complain of course because the lender could easily strike me off its panel, damaging my mortgage brokerage.

 

“However, among the genuine claims will be thousands of frivolous ‘chance your arm’ claims, mainly from the ambulance chasing claims companies. Facebook is carrying adverts with messages such as ‘Did you take out an interest only mortgage since 2004? You may be able to claim’.

 

“When combined with our litigious culture, and a claims process that costs complainants nothing whether they win or lose, it positively encourages people to make a claim just to see if there is any mileage in it. Stand by for the same templated letters from militant consumer websites that we saw during the endowment mis-selling era.

 

“In a previous life I was involved in dealing with such complaints and we had many letters produced from one particular website that had the same typing and formatting errors on everyone.

 

“The letters had a pick and mix selection of possible reasons why someone might feel they had a complaint. If in doubt, the suggestion was to tick them all and hope that at least one sticks.

 

“I know full well there is no way of stopping this gravy train because we need to preserve the right to complain free of charge. It just rankles that the industry will end up paying millions for increased claim costs when it seems up to 80% of complaints (based on claims to date) may be rejected.”

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The 10 biggest mortgage broker stories this week – 06/04/18

Interest-only mortgages have been one of the hottest topics this week, with predictions of both an increase in mis-selling cases,...

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