|Posted by Percy A Lowe on March 27, 2013 at 7:30 AM|
Getting a mortgage entails an important decision as it will certainly influence the person's financial situation. Therefore, it is important that brokers must assist their clients in obtaining the appropriate information on the various solutions available. Usually these procedures are disregarded by a few brokers. Consequently the Financial Ombudsman has received many mis sold mortgage complaints filed by the homeowners against their brokers. Brokers don’t fully spend the necessary time on the education part of the mortgage like they should with potential home buyers.
Appropriately the most prevalent case of mis sold mortgage are felt by homeowners that pay on "interest only" mortgage. In other words the payment made each month only goes on the interest while principal amount remains intact only to be paid in full upon the actual maturity of the mortgage. It appears that some homeowners took this approach through the advice of their brokers that rising house prices will eventually pay off the mortgage of their house. Such option will certainly build a problem especially if the homeowner is not given other alternatives on where they can produce this huge fund in the end. This is done to a lot of home owners who has plenty cash flow and very bad credit. They are very uneducated home buyers and when they see something that looks good they just jump right on it.
Additional common fault committed by the broker is their deficiency to make a detailed analysis on the financial capacity of the client. This may be deliberately carried out by the broker in the interest of concluding a deal so they can get a big commission on the sale. Then again, it is the homeowner who suffers in this type of dealing as they become involved with a predicament wherein it is unrealistic for them to settle their particular debt. This is just like those people who are acquiring a mortgage that will go beyond their age of retirement. Preferably, the broker must have talked about with the homeowner the potential retirement income they'll acquire and if they can still find the money to pay the mortgage. All the same, if this was missed out then it's clear that a mis selling of mortgage occurs. There is no law’s that requires loan officers, broker, under writer, are anyone in the business of selling a home to educate the home buyer. That is all up to their business ethics if they have any.
Whenever a homeowner desires to remortgage his property to pay his other loans as well as credit card expenses, the broker is expected to inform the client that the amount of interest that he will be paying will be more because the mortgage will last for a longer period of time. If this information is not presented then it will surely put in an extra financial burden on the homeowner and may at some point lead to a repossession of the property because the mortgage has not been fulfilled.
Obviously mis sold mortgage generally comes about when the broker takes advantage of their particular client by not offering them specific information on the financial responsibility they are about to take. Certainly this is unlawful because the consumer rights of the customer are totally disregarded. Thus it is just appropriate to remedy this negligence by submitting a complaint against the broker so the client can reclaim compensation for all the transaction they have made including the interest accumulated from it.
Categories: Mortgage Advisory