From The Daily Mail:
A couple in their 40s became unusual victims of common sense after their bank rejected an interest only £250,000 mortgage equity withdrawal application because it deemed the husband to be too old.
HSBC was ordered to pay them compensation after the banking industry watchdog found it ‘relied on sensible assumptions and were acting in the couple's best interests' in the case.
The banking giant was criticised for refusing to hand over £250,000 secured on unrealised and unearned capital gains on a home on which the purchase mortgage had not even been paid off yet because the husband would have been over 65 when the 18-year-deal finished, according to The Sunday Times.
A grim document
4 hours ago
3 comments:
Madness. You wouldn't have got a repayment mortgage in the 80s that ended after you were 65, maybe even after you were 60.
This interest only thing is a nightmare waiting to happen. I knew a guy who took one out in the early-mid 2000s because "inflation will sort it out". Wonder how that's going...
Welcome to the parallel - and bonkers - universe of financial regulationism. (N.B. the FOS is about as mad as mad person living on mad street could get). The FCA set new rules for lenders under the MMR, which HSBC then apply. The FOS then finds HSBC 'guilty' of applying said rules.
HSBC: But we were only applying the FCA's rules.
FOS: The FCA only make those sort of rules so they can be seen to be "doing something". You're not supposed to apply them FFS, you might stop house prices going up and where would the government's chances of re-election be then, eh?
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