the mortgage claims bureau and you a guide to managing mis sold mortgage claims n.
Download
Skip this Video
Loading SlideShow in 5 Seconds..
THE MORTGAGE CLAIMS BUREAU AND YOU A guide to managing mis-sold mortgage claims PowerPoint Presentation
Download Presentation
THE MORTGAGE CLAIMS BUREAU AND YOU A guide to managing mis-sold mortgage claims

Loading in 2 Seconds...

play fullscreen
1 / 34

THE MORTGAGE CLAIMS BUREAU AND YOU A guide to managing mis-sold mortgage claims - PowerPoint PPT Presentation


  • 239 Views
  • Uploaded on

THE MORTGAGE CLAIMS BUREAU AND YOU A guide to managing mis-sold mortgage claims. AIM. To give you the confidence to: Handle and submit claims to TMCB Answer customer questions Have an understanding of why and how mortgage mis-selling occurs. WWW.THEMORTGAGECLAIMSBUREAU.COM. AGENDA.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'THE MORTGAGE CLAIMS BUREAU AND YOU A guide to managing mis-sold mortgage claims' - armine


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
slide2

AIM

  • To give you the confidence to:
  • Handle and submit claims to TMCB
  • Answer customer questions
  • Have an understanding of why and how mortgage mis-selling occurs

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide3

AGENDA

  • 1. Background
  • 2. Documentation
  • 3. Q & A discussion
  • 4. Practical examples

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide6

WHAT IS A MORTGAGE?

A loan used to purchase a property

The loan is “secured” against a property, so that if repayments are not made the lender can repossess and sell to get their money back

Residential, commercial or Buy to Let

Term: 5-35 years

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide7

WHAT IS A MORTGAGE MIS-SELLING?

Mortgage mis-selling occurs when a sales representative from a mortgage broker or lender advises an inappropriate product to an individual, (the client), which results in that client suffering a financial loss.

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide8

PPI processing vs. mortgage mis-selling processing?

  • Most mortgages were sold correctly
  • The complexity and possible variations of mortgage mis-selling

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide9

What are the prerequisites of a mortgage mis-selling claim?To succeed, a claim must be based upon legal precedence or unequivocal breaches of MCOB regulations backed up by a proven financial loss.

slide10

We have mapped these prerequisites into three questions. If your customer can answer ‘yes’ to just one of them there may be a case of mortgage mis-selling.

slide13

Have you switched mortgage, or re-mortgaged more than oncein any four year period since October 2004?

did you take out a mortgage from any of these lenders before october 2004

Did you take out a mortgage from any of these lenders before October 2004?

  • Amber Home Loans
  • G-Mac
  • Paragon
  • Birmingham Midshires
  • Igroup
  • Pink Home Loans
  • CHL
  • Kensington
  • Edeus
  • Preferred Mortgages
  • Rooftop
  • The Mortgage Business (TMB)
  • London Mortgage Company
  • Mortgage Express
  • SPML (Southern Pacific)
  • First National
  • Mortgage Trust
  • The Mortgage Lender
  • Future Mortgages
  • Mortgage Works
  • GE Money
  • Oakwood Home Loans
slide15

Unless the customer answers ‘Yes’ to one or more of these questions, a claim, however passionate, will almost certainly fail.

slide18

What is a mortgage?

  • 1. A loan used to purchase a property
  • The loan is “secured” against a property, so that if repayments are not made the lender can repossess and sell to get their money back
  • 3. Residential, commercial or Buy to Let
  • 4. Term: 5-35 years
  • 5. The lender will register with Land Registry as an ‘interested party’

WWW.THEMORTGAGECLAIMSBUREAU.COM

types of mortgages

TYPES OF MORTGAGES

REPAYMENTINTEREST ONLY

slide20

KEY DATES

  • 1. Oct 1986 De-regulation
  • 2. Foreign banks enter UK market but sell through brokers and high street banks start to set up sub-prime brands – anything goes approach till Nov 2004
  • 3. The Financial Services Authority (FSA) took over mortgage regulation on 31/10/2004
  • 4. The Mortgage Conduct Of Business (MCOBs) took over from The Mortgage Code at the same time.
  • 5. 2nd and 3rd charges and Commercial Mortgages i.e.Secured Loans and Buy to Lets are not regulated by the FSA

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide21

SUB PRIME MORTGAGES

  • Sub-prime mortgages are those provided by lenders who, in general, do not have a high-street presence
  • A subprime mortgage is often the financing of choice for borrowers who do not fit the conventional guidelines of mortgage financing

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide22

SUB PRIME MORTGAGES

  • Edeus
  • Mortgage Express
  • SPML (Southern Pacific)
  • First National
  • Mortgage Trust
  • The Mortgage Lender
  • Future Mortgages
  • Mortgage Works
  • The Mortgage Business (TMB)
  • GE Money
  • Amber Home Loans
  • G-Mac
  • Paragon
  • Birmingham Midshires
  • Igroup
  • Pink Home Loans
  • Northern Rock (NRAM)
  • Kensington
  • Preferred Mortgages
  • London Mortgage Company
  • Rooftop

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide23

Brokers actively sold sub-prime interest only mortgages because the commissions were greater than their high street counterparts

  • and were usually quicker
  • To Complete
slide25

THE USUAL SUSPECTSExamples of mis-sold mortgage scenarios that can be used to support a claimBUT NOT BE THE BASIS OF THE CLAIM

slide26

THE USUAL SUSPECTS

  • 1. Mortgaged into retirement
  • 2. Debt consolidation
  • 3. Top-upmortgage loans
  • 4. Interest only mortgages without a repayment vehicle
  • 5. Self Cert
  • 6. Right to Buy schemes

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide27

1 . Mortgaged INTO RETIREMENT

The term of your mortgage will run past your retirement age and the sales person will not have ensured that a suitable method of mortgage repayment such as apension is in place

Alternatively they may have asked if you have a pension but not confirmed that the income it provides will cover the total mortgage repayment

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide28

2 . Debt Consolidation

  • On the surface, debt consolidation looks like a positive thing. If you are paying a higher rate of interest on a car loan or credit card than your mortgage then why not consolidate?
  • The problem arises when the Finance Agreement that’s being consolidated is set up over a greater term than it was originally sold on. If you have a 5 year car loan that’s consolidated onto a 25 year mortgage then you are paying interest on that finance for 20 years longer than you would have done originally
  • This puts you in a worse position than if you had a higher interest rate initially and is classed as bad advice

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide29

3. TOP-UP LOANS

  • 125% loan to equity
  • Top-uploan second mortgage so unregulated and not coveredby FSA
  • Lenders used extra borrowing to loadcharges and conditions

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide30

4. INTEREST ONLY MORTGAGES WITHOUT A REPAYMENT VEHICLE

  • The sales person should ensure that a suitable repayment vehicle e.g. an endowment, pension or ISA is in place to pay off the mortgage capital at the end of the mortgage term
  • Some sales people recommended interest only mortgages with no repayment vehicles so monthly repayments remain low
  • It isn’t acceptable to state you can sell your home to repay the capital as house prices may stagnate as in the current housing market
  • A huge time-bomb. 1.5 million ‘Interest Only’ mortgages, sold without any form of savings policy in place, will come to the end of their terms in the next ten years!

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide31

5. Self certification

  • Self cert mortgages are offered to a client when they cannot show proof of their regular monthly income, i.e. when they are self employed
  • The interest rate charged is usually higher due to the risks involved. Often if they could have proved their income and therefore could have gone with a cheaper lender

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide32

6. Right to buy schemes

  • Right to buy schemes were used when a client wanted to purchase the council house they were residing in.
  • Some mortgage brokers upon seeing the discounted selling prices would add on excessive fees for setting up the mortgage. This would then leave a huge and unnecessary bill to pay.

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide33

brokers

  • Some very good, some very bad
  • Created the market place
  • Were paid very high commissions
  • Didn’t always act in the customer’s best interest
  • Most have gone out of business

WWW.THEMORTGAGECLAIMSBUREAU.COM

slide34

Why were sub-prime mortgages sold in such large numbers?

  • Credibility of brokers was established by word of mouth
  • They were the favoured product by brokers
  • The cost – they were perceived as cheaper
  • They were quicker to complete than standard High Street Mortagages

WWW.THEMORTGAGECLAIMSBUREAU.COM