Mis sold right to buy mortgage
In the early 1980’s Margret Thatcher introduced what is known as the right to buy scheme. It was a way that council tenants could purchase the property they lived in at a discount depending how long they had lived there.
It was a great way to get people onto the housing ladder and generate income for local councils.
Unfortunately during the early 2000’s a new breed of marketing company appeared with sales forces that knocked door to door to let council tenants know they could buy their homes. They offered to take care of all the paperwork and explained they had people who could arrange the best mortgages for them. The paperwork was a barrier which stopped many people applying to buy their homes so this was very appealing.
To make things even more attractive there was nothing to pay upfront and all fees could either be added to the mortgage or a loan could be arranged to cover them with it being repaid on completion.
The fees ranged from £2000 – £4000 depending on the marketing company. All for something that could be done free.
Once the paperwork from the council was approved and the details of the valuation, discount and price were given to the clients the marketing company would introduce them to a mortgage broker.
The mortgage broker claimed to be acting independently and offer the best possible advice, but often explained getting council tenants mortgages was a difficult process. They would also have to charge upwards of £2000.
In many situations we have already seen that mortgages were arranged with only a handful of lenders who were mainly non high street lenders, such as preferred, spml, ge money, platform, rooftop mortgages, mortgages plc, and gmac to name but a few.
To make sure the clients were covered in the event of losing their jobs they insisted that they took out payment protection insurance(ppi). They usually added this a lump sum to the mortgage normally costing £1500 upwards and only covered the customers for 3 – 5 years. The main reason was they normally received at least 60% of the policy as commission. This is a classic case of mis sold ppi, and we can help you make a ppi claim.
So hopefully it is now easy to see why mis sold right to buy mortgages occurred as the level of commission to the marketing company and mortgage brokers was thousands of pounds.
There were many companies involved in the market such as Regency Mortgage Corporation, Hadenglen, Home and County, Council Home Buyers, Diamond Lifestyle, Black and White Mortgages, Home Owners Advice Centre and Professional Mortgage Services.
Don’t worry if you have a right to buy mortgage with a lender we have not mentioned or through one of the main mortgage brokers as there were many others that mis sold right to buy mortgages.
To make a mortgage claim is simple, just complete our simple form or phone us on our freephone number. Our service is always on a non win no fee basis so you have nothing to lose and everything to gain.
