Popular Practice Of Mis-sold Mortgages

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Problems of the homeowners regarding mis-sold mortgages are now going to light more than ever because of various reasons.  More and more people who have home financing and were told that was the best mortgage for them cannot make the mortgage repayments any longer due to mis-sold mortgages and unemployment.

If you’ve been advised to have a home loan on your home which you think might not have been suitable to you, you might be also mis-sold mortgages victim.

These professionals included in the sale, that is the banks and financial advisors would’ve mis-sold you the mortgage you applied.  Massive commissions and huge incentives were made available to anyone involved with the sale of these products, and widespread mis-sold mortgages product became quite common.

However the potential fraud and mis-sold mortgages exist with every type of regulated mortgage, even people with the best reputable of high-street lenders, the potential for claims is extremely small here as the control mechanisms in place make it hard for breaches to happen.

Many mortgage brokers and firms didn’t adhere to Mortgage Conduct of Business (MCOB) when placing their customers into mortgage deals which are entirely unsuitable for their circumstances and in most cases would inevitably lead to repossession because of mis-sold mortgages that happen.

Adverse credit mortgages are those mortgages aimed at sub prime clients who by now had arrears and CCJ’s on their files.  Many of these mortgages were prompted by broker agents as a method of stopping legal proceedings to customers who were already in financial difficulty.  This form of mortgage provided far higher commission than standard products to credit worthy borrowers.

Mis-sold mortgages could happen using this type of mortgages since these products had high early repayment charges to lock clients into costly deals which they couldn’t really afford and had a great chance of losing their homes.

Self certification mortgages can even be mis-sold mortgages and these are being offered to clients who didn’t have to prove their income.  Same as adverse credit mortgages, these products also have a very high commission and high early repayment charges.

Mortgages with extremely high loan to value are those mortgages offered to customers who could not place down deposit or remortgaged their homes to a very high percentage and these can also be mis-sold mortgages as it can put the client immediately into negative equity.

Churning is a common practice by mortgage brokers or firms looking to chase commission and arrangement fees.  The clients may have mis-sold mortgages because of this as they is going to be placed into the lowest rate product for a short moment which becomes impossible to pay when the interest rate resets higher following the promotional period that could be just for a year.

The mortgage broker then remortgages the customer onto a new low rate product and the customer may be charged an early repayment penalty by the lender along with a new arrangement fee and because of this, the agent also gets another inflated commission rate.

 

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