FCA: No evidence interest-only mortgages were mis-sold
The Financial Conduct Authority has said that there has been no mass evidence collected in relation to the mis-selling of interest-only mortgages to homeowners in the UK.
Since the news that over a million people with interest-only mortgages face a shortfall when it comes to making final payments on their mortgages, many have said they did not fully understand the product they were buying, and now face drastic measures to raise the money required to complete payments on the loan.
This has led to Money Boomerang, a company specialising in Payment Protection Insurance (PPI) claims, launching a television advert aimed at encouraging those with interest-only mortgages who feel they were mis-sold the product to contact them. Many other claims management companies have also jumped on the bandwagon, and this has caused concern over the outbreak of another ‘PPI style’ claims culture.
However the FCA has taken a very clear stance on this, and despite the fact that 2.5pc of people who were sold interest-only mortgages (about 65,000) said they were unaware of the terms and conditions, the regulator has deemed that there is no evidence of mass mis-selling of the product.
“This is not one of those complex products. It is what it says on the tin”, Martin Wheatley, the head of the FCA, told the BBC.
A spokesman for the Financial Ombudsman Service (FOS) reiterated this point: “The FCA review concluded that the vast majority of people were fully aware of the conditions of the mortgage they took out. Even people in the other category might not have a claim for mis-selling. Even if you weren’t aware of the terms of the loan it doesn’t mean you weren’t told about them.”
Those who do feel you have a claim should also avoid claims management companies, who can charge fees of up to 25pc of the final settlement. Instead any claims should be directed to the FOS who will handle them for free.
For any advice and help with your interest-only mortgage, please contact a member of our team of our advisors, who will be happy to help.
Share this..
Related stories
Lloyds to limit mortgage lending
21/05/2014 Lloyds Banking Group has announced it will limit mortgage lending to four times an applicants income for mortgages worth more than £500,000. They said the reason for the cap was a result of “specific inflationary pressures in the London housing market”. House Prices in London have rocketed recently in comparison to the rest of the country, despite the average house in the...
Read MoreLending Figures Up For April But Down Year On Year
Those looking for even the merest snippet of good news in the UK lending market would have been glad to see lending figures from the Council of Mortgage Lenders (CML) which showed an increase of 9% in the number of mortgages approved in April against the previous month. However, the actually year on year figure is down from 80,500 in April last year to 50,700 in April 2008, a substantial fall.
Mortgage lending still under pressure
The Council of Mortgage Lenders (CML) has today revealed that new home loans increased by 7% in May to £11.3 billion. While the 7% increase on the April figure is obviously a move in the right direction it is still only 10% higher than May 2009 which perfectly illustrates the still subdued level of mortgage liquidity and mortgage agreements in the UK. So what next? The CML is growing more and...
Read MoreNational Audit Office reveals startling facts about Northern Rock
It has been revealed that government owned Northern Rock was still issuing 125% mortgages days after the government stepped in to bail out the company. This is the first of what many people expect to be a number of damning reports regarding the actions taken by the UK government in these most difficult of times. It looks as though Northern Rock was allowed to fund over £1.8 billion in mortgages,...
Read MoreHas the negative equity trap caught 4 million people?
A report by GfK NOP this evening makes for the bleakest of reading for UK property investors and homeowners with an indication that nearly 4,000,000 homeowners in the UK are close to or actually in negative equity. The report is by far and away the most depressing so far and while the figure of 4 million has been questioned by many in the industry, with an average figure of around 2 million often...
Read More