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sarahbell

here it comes tsunami - interest only mortgage

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https://www.mortgage-claim.co.uk/landingpage/twitter/variant2/

What’s happening?.. 
 1.9 Million people have been led into an interest only mortgage 
• Lenders and brokers may have mis-sold mortgages to thousands of customers 
• Many of the people affected by this have no idea they could be due compensation                                  • Nearly 2 Million have been left repaying a mortgage that was inappropriate and unaffordable                • Interest only mortgages holders are being refunded thousands of pounds  

Am I Affected?

If you have taken out an interest only mortgage, after 31 October 2004, then there is a possibility that the mortgage was mis-sold, and you could be due a refund.

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Inappropriate, Unaffordable kerching! compensation.

The only people I know with IO, and I gave mentioned it before, were fully aware that it was a bad thing but they couldn't afford a standard repayment mortgage.

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Just now, Frank Hovis said:

Inappropriate, Unaffordable kerching! compensation.

The only people I know with IO, and I gave mentioned it before, were fully aware that it was a bad thing but they couldn't afford a standard repayment mortgage.

Compensation, goody. Perhaps I'll give one of those no win no fee outfits a go.

Might be tricky to win a claim because I can read and knew exactly what they are when I used one to buy my house.

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Just now, sleepwello'nights said:

Compensation, goody. Perhaps I'll give one of those no win no fee outfits a go.

Might be tricky to win a claim because I can read and knew exactly what they are when I used one to buy rent my house.

FTFY

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1 minute ago, sleepwello'nights said:

Compensation, goody. Perhaps I'll give one of those no win no fee outfits a go.

Might be tricky to win a claim because I can read and knew exactly what they are when I used one to buy my house.

This was the thing with PPI as well , never had it and when offered it I laughed at the mortgage sales person and explained I wasn’t that daft 

For everyone who did take it out I view it as a stupid tax , compensating them doesn’t make them less stupid 

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Posted (edited)
8 minutes ago, Malthus said:

This was the thing with PPI as well , never had it and when offered it I laughed at the mortgage sales person and explained I wasn’t that daft 

For everyone who did take it out I view it as a stupid tax , compensating them doesn’t make them less stupid 

Yes, but it makes us the fools.

Oh hang on, I have an IO mortgage so I can't claim financial integrity on that.

I did have PPI insurance once, it was given as a no charge option on a mortgage we took out. We even claimed on it once when my wife had been made redundant. It paid out a few pounds for a very short period until my wife found new employment. I even had a shot at compensation after we had been plagued with calls from those no win no fee outfits. I wrote to the lender, spent a couple of hours filling out the interminable forms they sent, a few more letters giving them details they requested, which I'd already given on the original form until they finally told me to fuck off. On balance it wasn't worth spending the time on the forms as the policy hadn't been mis-sold, it had even paid out. Hey it could have been a gift horse, and I never look one in the mouth.

Edited by sleepwello'nights

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2 minutes ago, sleepwello'nights said:

Compensation, goody. Perhaps I'll give one of those no win no fee outfits a go.

Might be tricky to win a claim because I can read and knew exactly what they are when I used one to buy my house.

Play it up!

There were several inappropriate financing products sold to the public sector late 90s early 00s such as interest rate swaps and LOBO loans and to be eligible to cancel the product you had to be able to demonstrate that you had been unable to understand what you were entering into at the time.

Or lots of still in place FDs would have had to stand up and say "I was an incompetent idiot".

I didn't actually hear of any doing this; professional pride.

Though this was the exact defence of most LMX underwriters at Lloyd's after the late 80s collapse: "I did not understand what I was writing.".

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18 minutes ago, Frank Hovis said:

Inappropriate, Unaffordable kerching! compensation.

The only people I know with IO, and I gave mentioned it before, were fully aware that it was a bad thing but they couldn't afford a standard repayment mortgage.

Well they will be able to now and be able to thank you personally for paying your tax so that they can.  xDo.O

12 minutes ago, Malthus said:

This was the thing with PPI as well , never had it and when offered it I laughed at the mortgage sales person and explained I wasn’t that daft 

For everyone who did take it out I view it as a stupid tax , compensating them doesn’t make them less stupid 

Eggsackerly. I did the same. 

Guess in hindsight, we were incredibly stupid and it was the idiots who played a blinder on this. xD

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It really does annoy me that people's stupidity or naivity is rewarded with these sums from nowhere.

I had an endowment mortgage, misold in so far as the loan plus bonus never had any chance of materialising. Shortfall of about £9,000 or around 25%. I managed to pay some of it down, so the hit wasn't so bad if a little painful. I was as responsible for that decision. Fortunately house prices were reasonable back then.

PPI, never took it...

I struggled while many others were getting nice little windfalls :CryBaby: Who is the idiot?

There should be no excuse for IO Mortgages, they were clearly a bad idea from the start. Just more spivvery.

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Compensation is really counter to Darwninian natural selection

It would be akin to rewarding songbirds that encourage a cuckoo to lay in their nest.

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I was relatively financially illeterate when I took a mortgage out in 2004* and even then I knew that an Interest Only mortgage wasn't a great idea in the long run. Those who took out IO mortgages had to prove that they had an investment vehicle in place to pay off the capital so imo they should not be compensated. Easier to understand than PPI imo.

* sold up in 2010 after a shit run of awful temp and perm jobs. Financially illiterate as my jaw hit the floor when I discovered that the total amount I would owe the Abbey would be £114k in 25 years on a £57k mortgage. Then in 2008 I found ToS and there began my journey of better financial literacy.

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Important word, 'Could' -- I don't believe that they can do anything to resolve the IO 'end of term' problem with a few £k compensation here and there.  The numbers are absolutely massive compared with PPI (say).    I also find the '31st Oct 2004' interesting -- this is the point at which stringent new rules about paperwork came into place, and I'd note that in 2004 the banks were well aware of paperwork requirements following the endowment misselling scandal.

IMO we're almost certainly going to have some legislative changes to help before the problem really starts showing.  This is starting about now, but they've got about 5 years before the rush really hits.  I'd suggest they'll:

  • Mandate that those at end-of-term must be offered a continued loan on the same terms (relative to base rate), even if they wouldn't satisfy lending criteria
  • Mandate offering equity draw-down on available equity on a 'costs incurred' rate (ie, little (no) profit to be made on the draw-down)
  • Offer tax relief on all mortgage interest up to the tax base rate threshold (IMO they'll have to do this anyway to reduce the sting of interest rate rises)

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Posted (edited)
30 minutes ago, dgul said:

Important word, 'Could' -- I don't believe that they can do anything to resolve the IO 'end of term' problem with a few £k compensation here and there.  The numbers are absolutely massive compared with PPI (say).    I also find the '31st Oct 2004' interesting -- this is the point at which stringent new rules about paperwork came into place, and I'd note that in 2004 the banks were well aware of paperwork requirements following the endowment misselling scandal.

IMO we're almost certainly going to have some legislative changes to help before the problem really starts showing.  This is starting about now, but they've got about 5 years before the rush really hits.  I'd suggest they'll:

  • Mandate that those at end-of-term must be offered a continued loan on the same terms (relative to base rate), even if they wouldn't satisfy lending criteria
  • Mandate offering equity draw-down on available equity on a 'costs incurred' rate (ie, little (no) profit to be made on the draw-down)
  • Offer tax relief on all mortgage interest up to the tax base rate threshold (IMO they'll have to do this anyway to reduce the sting of interest rate rises)

And then, when the life-time renters die and there is no windfall inheritance to the siblings the TPTB will have to think up another wheeze so that people can own a home rent a house.

Meanwhile, private sector renters who see the madness and choose to look after themselves can just either muddle along or scrape by, whichever way you like to look at it

Edited by Hopeful

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26 minutes ago, Hopeful said:

Compensation is really counter to Darwninian natural selection

It would be akin to rewarding songbirds that encourage a cuckoo to lay in their nest.

Nobody seems to give a shit about moral hazard anymore.

I remember telling a friend of mine that we'd all be better off if the government stopped guaranteeing bank deposits. He was outraged. Then after 5 minutes explaination he agreed with me 100%.

Reward stupidity, and you'll get more of it.

Punish prudence, and you'll get less of it.

Remove the consequences of failure, and eventually the whole house of cards comes tumbling down.

:Old:

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58 minutes ago, Malthus said:

This was the thing with PPI as well , never had it and when offered it I laughed at the mortgage sales person and explained I wasn’t that daft 

For everyone who did take it out I view it as a stupid tax , compensating them doesn’t make them less stupid 

I took it on my mortgage, I was young at the time (18), naive.

Did get all the forms for claiming comp from Woolwich but tbh it looked like a real faff.

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Just now, sarahbell said:

Nearly a quarter of all mortgages from major banks are interest-only

A bit disingenious.

OO have not been able to get an IO mortgages for 4-5 years.

 

Londin SE is IO ooo ground zero - most mortgages from 2004 to 2012ish.

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1 hour ago, Frank Hovis said:

Inappropriate, Unaffordable kerching! compensation.

The only people I know with IO, and I gave mentioned it before, were fully aware that it was a bad thing but they couldn't afford a standard repayment mortgage.

I have mentioned the same but it`s the other end of the spectrum 

They said yeah it`s interest only but they are/were convinced it works the same way as a repayment mortgage ,i explain to them what an IO mortgage is and left it at that as the conversation was starting to feel intrusive as the guy is severely dyslexic and the wife looks after every thing financial   

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58 minutes ago, Long time lurking said:

I have mentioned the same but it`s the other end of the spectrum 

They said yeah it`s interest only but they are/were convinced it works the same way as a repayment mortgage ,i explain to them what an IO mortgage is and left it at that as the conversation was starting to feel intrusive as the guy is severely dyslexic and the wife looks after every thing financial   

Maybe tgey need to sit people down and make them sit a basic elementry maths tests - percentages etc before allowing people to borrow money?

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