A powerful all-party group of MPs, the Treasury Select Committee, today released a damning report on the widespread mis-selling of mortgage endowments. (These MPs are really getting their teeth into financial services companies; they savaged credit and store card issuers last December!)
MPs revealed that four out of five endowments (80%) will mature with values short of what is needed to pay off the associated mortgages. The average shortfall for failing policies is predicted to be around £5,500 each. What's more, MPs reckon that a staggering three out of five policies (60%) have been mis-sold.
Full story: http://www.fool.co.uk/news/foolseyeview/2004/fev040311c.htm
The scale of the endowment mis-selling problem has been seriously underestimated, parliamentary watchdogs at the Treasury Select Committee were told last week. According to figures given to the committee by the chief city watchdogs, the Financial Services Authority, around 3.5 million homeowners will be unable to repay their mortgages on maturity. They will typically face a £5500 home loan shortfall, leaving Britain looking at a £30 billion black hole over the next five or 10 years.
Full story: http://www.sundayherald.com/39611
Four of the biggest life insurers have been warned to speed up their handling of mortgage endowment mis-selling complaints or face massive fines from the City regulator. The financial giants have until the end of April to remedy the situation.
Full story: http://www.thisismoney.com/20040201/nm73691.htm
The shortfall on endowment mortgages could reach £30bn, according to the UK's main financial watchdog.
Full story: http://news.bbc.co.uk/1/hi/business/3433121.stm
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