Today I found out we have be ripped off to the tune of thousands of pounds. Let me explain.
In March of this year we decided to remortgage our home. We needed to bring our spending down, which we did, plus by re-mortgaging we could save a few hundred pounds by getting rid of an existing loan and some credit card debt. We studiously worked out what we could afford and used the services of an FSA approved mortgage broker. The latter is probably the worst decision we could have made.
The mortgage went through and the appointed solicitor duly paid our new mortgage provider. I was paid some money to pay off the loan, but was advised by the mortgage broker that they would act on our behalf to get a lower settlement figure on the loan. The solicitor also paid the mortgage broker over £10K, which was to cover the credit card bills. More than enough in fact. Here is where we went wrong. We should have checked with the FSA that they were licenced to act on our behalf. It turns out they were not and they have since gone into liquidation. I am now preparing a legal case against the solicitor as I did not authorise them to hand over my money to the mortgage broker. This is only half of the story.
The money paid to me has dwindled because we have not only had to pay more for the mortgage but we have had to pay an additional £650-700 a month to cover the other debt, the debt that would have been paid off if the solicitor had paid all the money to me. I am not covered by the government compensation scheme and my only hope is taking action against the solicitor, something I wish I had done immediately. I also wish I had rejected the offer to reduce the settlement figures too, but when you are presented with an opportunity to save some money, you tend to take it and everything seemed legal and above board.
My advice to you: Check with the FSA that any company you use is licenced to offer you that service. We knew they were licenced to offer mortgage advice and broker a deal for us. We wrongly assumed they were licenced to offer other services too. I knew if the company went bust we would be covered by the compensation scheme, but of course if they are not licenced in a particular area, you are not covered. This is something we are now living to regret.
3 comments:
I don't purport to understand the half of this, Andrew and have never remortgaged and consolidated. It sounds a nightmare and is a commentary on the near impossibility of living a normal life with home, car and wife in Britain today.
It's not going to help you but this is the wage/price disconnect which comes back again and again to the banks, esp the CBs. We just have to get off this spiral and I'm trying to over here.
Thinking about you today.
Andrew I think the moral of this story is don't get in debt in the first place, and manage your money. Incredible how many people who earn top dollar can't actually pay their mortgage. It makes me annoyed when I'm sat here scrimping and saving, while other people are just having the time of their life all on tick!
Thank you, James.
Baz: I haven't been living it up. The credit card debts have been built up very slowly over many years. This was a chance to get rid of them and put a home improvement loan onto the mortgage and lower the interest and therefore the total amount needing to be repaid.
I am currently taking action against the solicitor who undertook the conveyancing. This is the best hope we have of getting our cash back and use it for the purpose it was intended.
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