Mis-sold Mortgage Claims > Mortgage News
Mortgage claims limits are not sufficient for many borrowers
Mon, 21 Mar 2011
The mortgage industry continues to debate the issue and consequences of irresponsible lending practices and poor mortgage advice. Many believe that it should be accepted that borrowers who have suffered loss or who are experiencing financial hardship as a result of being mis-sold a mortgage are entitled to help and compensation, however, the limits set by the Financial Ombudsman Service (FOS) are now being questioned.

Borrowers can complain to FOS or go to a specialist who understands the market offering expert mediation services, ensuring they are compensated correctly; often the FOS limit set for mortgage claims at £100,000 is not sufficient. The Financial Services Compensation Scheme (FSCS) is set up to provide cover to consumers who may have been mis-sold a product by companies who have "gone bust" or ceased trading, however, in many cases the £50,000 limit for mortgages will not be sufficient to cover the compensation due.

Heavy fines are being levied on culprits, most recently DB Mortgages, more are expected. One industry commentator said. "The ‘good guys’ should not carry the cost for those who have caused the problem. This is something that must be addressed as matter of urgency."

Experts have argued, the perception that sub-prime or specialist lending was at the heart of the problem is wrong. Many of these lenders and brokers have also ceased trading. It is widely believed that larger mainstream lenders representing a significant percentage of lending were guilty of irresponsible lending. There are thousands of borrowers left on standard variable rate (SVR), past retirement age, who have no way out and are struggling to make repayments.
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