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There can be serious financial consequences from a mis-sold mortgage. It could be one which is unsuitable for your circumstances, contains hidden fees and penalties, or perhaps has features which were not properly explained to you and are now having negative effects.
If your mortgage lender or broker has mis-sold you a mortgage, and you have suffered problems as a result, you can claim compensation for the financial harm this has caused you.
You might recognise financial harm as:
- Difficulty in keeping up with your mortgage payments.
- Negative equity – i.e. the value of your house being less than the total you owe on your mortgage.
- Excessive interest rates.
- Having to pay large amounts in fees and/or penalty charges.
Truth Legal’s specialist financial litigation solicitors can help you to claim the compensation you deserve for the financial damage you have suffered. Get in touch with us today and speak to a solicitor about your mis-sold mortgage claim.
What is mortgage mis-selling?
Mortgage mis-selling can occur when a mortgage lender, broker or advisor does not fulfil their legal duties when selling a mortgage to you.
Mortgages can often be confusing. They are complex arrangements, with many detailed terms and conditions involved. At the same time, mortgages are significant debts, which have major effects on people’s lives – both financially and personally.
An unwary borrower is therefore at great risk of taking on large financial liabilities without fully understanding the consequences. As such, there are strict rules about how lenders and brokers should act – and the advice, support and information they should give – when selling mortgages to customers.
If your mortgage lender or broker has failed you in their legal duties, it may mean that your mortgage was mis-sold to you. Some examples of how they might do so include:
- Giving bad or insufficient advice.
- Failing to assess your ability to keep up with repayments and other financial obligations.
- Failing to take into account personal circumstances, such as your retirement age.
- Insufficiently explaining the fees they would be charging you and how these would be paid.
- Charging you excessive fees.
Situations where mortgage mis-selling can occur
Sometimes it can be difficult to judge whether you have been the victim of mortgage mis-selling. The following list gives some examples of particular arrangements which may indicate mis-selling or are higher risk situations:
- Interest-only mortgages – These mortgages are subject to more stringent rules about the advice lenders and brokers have to give. This is because careful planning is needed to avoid the potential dangers involved in only repaying interest on the capital sum and not the sum itself.
- Endowment policies linked to interest-only mortgages – Endowment policies are regular savings plans which can be used to repay mortgage capital at the end of an interest-only mortgage. If an endowment has not been set up to meet properly the requirements for which it is needed, it could also constitute mis-selling.
- ‘Fast track’ or ‘self-certification’ mortgages – Mortgage lenders and brokers are duty-bound to investigate a borrower’s ability to repay the mortgage. These kinds of mortgages can represent a breach of that duty.
- Mortgages extending beyond your retirement age – These require specific advice about how you will be able to keep up with repayments after you have retired.
- Remortgaging for debt consolidation purposes – Consolidating smaller debts into an increased mortgage is not always the best option. Lenders and brokers must assess the circumstances of the borrower and advise them fully on the implications of remortgaging to consolidate debt.
- Hidden or excessive fees and broker commission – How a mortgage is to be paid for is something which lenders and brokers have to discuss with a borrower in detail. Commission for brokers is not against the rules, but excessive commission may indicate a broker is incentivised sell a particular mortgage, and could influence their advice to borrowers about different products.
- Failure to advise of penalties or fees when switching to a different mortgage lender – If a broker has advised you to switch mortgage providers, they must inform you of any penalties and fees which would be incurred before you agree to change.
More information on these different situations can be found in our detailed mis-sold mortgage claims guide.
Claiming compensation for a mis-sold mortgage
To succeed in a claim for mortgage mis-selling, you must prove that your mortgage lender or broker breached their legal obligations regarding the sale of your mortgage and that this breach caused you financial damage.
It may also be possible to make a claim even if the mortgage lender or broker who sold you your mortgage is no longer in business. The Financial Services Compensation Scheme allows victims of mis-sold mortgages to claim from the scheme’s fund instead, provided the lender or broker was regulated by the Financial Conduct Authority or the Prudential Regulation Authority.
Whether your lender or broker is still in business or not, Truth Legal can guide you through the claims process, building your case, gathering the required evidence, and conducting it with expertise and professionalism.
If you would like to know more about claiming compensation for a mis-sold mortgage, or you wish to discuss your situation, please contact us. We would be more than happy to chat about your case in a free consultation, with no obligation to proceed further.
Compensation for a mis-sold mortgage claim is calculated by comparing the situation you are in now against the predicted situation you would have been in had the mis-selling not taken place. In this way, it is intended to compensate you for the harm which your mortgage lender or broker caused.
This means the compensation you might receive cannot be predicted until your unique circumstances have been considered. Additionally, the party you are claiming from will only agree to pay compensation if you have proved that your mortgage was mis-sold to you.
However, with first-class legal support from Truth Legal you will be best-placed to overcome these challenges and to secure the right level of compensation. Our solicitors will always advise you on the levels of compensation you can expect as soon as it is possible to value your case accurately.
In general, mis-sold mortgage claims can only be brought within 6 years of the date upon which your mortgage was sold to you. You must lodge your complaint with the Financial Ombudsman within this time or you will be prevented from making a claim.
However, there are certain situations in which this time limit may be extended. For example, if you are unaware that your mortgage was mis-sold to you, and only realise at a later date, a deadline of 3 years may apply in which to make your claim. This will start running from the date you became aware (or reasonably should have become aware) of the mis-selling.
Mortgages and mis-selling claims can be complicated matters, and it’s in matters like these that professional support can make the greatest difference.
Whilst, you do not have to use a solicitor – or any legal representative – when claiming for a mis-sold mortgage, having your case assessed, formed, and prepared by experienced financial litigation solicitors gives your case its best chances of success.
At Truth Legal we always aim provide our clients with suitable funding arrangements for their claim. Often this is through ‘No Win, No Fee’ agreements, which, in the vast majority of situations, mean that clients do not have to pay our fees if we are unsuccessful in recovering compensation for them.
With a successful outcome, some of our fees will be paid by a portion of the compensation award. This is the normal way in which No Win No Fee agreements operate. It is also usual for most of our fees to be paid by the other party.
We will always explain funding your claim in more detail before your claim begins.