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Mortgage miscalculations

Submitted by Mortgage Broker on Tue, 2006-08-01 13:45.

Believe it or not, mortgage providers can make mistakes. In the past borrowers have been quoted the wrong repayment figures from the start of the mortgage after a change in the interest rate. Mistakes have also seen the term of some mortgages increased, where borrowers find they have many more years of repayments when they thought the mortgage was nearly finished.

The financial ombudsman will act in such cases. If the mortgage provider is entirely to blame for quoting an incorrect repayment figure and the victims raised the matter with them as soon as they became aware of it, the ombudsman will usually instruct the lender to write off the shortfall in capital that has built up as a result. Sometimes notional past savings (not including interest) will be deducted from the capital shortfall if the lender can show that these are retained by the borrowers in the form of identifiable and realisable assets.

Compensation is sometimes awarded in exceptional circumstances, such as for distress and inconvenience. Compensation can also be awarded for increased future payments if, for instance, the borrowers are near retirement age and will find increased future payments difficult, if the borrowers would have decided against the mortgage if they had been aware of the correct repayments.

Useful Contacts

Financial Services Authority
http://www.fsa.gov.uk

Financial Ombudsman
http://www.financial-ombudsman.org.uk

National Association of Citizens Advice Bureaux: 0207 833 2181

Office of Fair Trading: 08457 224499

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