Compensation firms to offer new services in regards to mis-sold mortgages

Claims firms are beginning to offer new services on a no win new fee basis which sees them attempting to claim compensation for individuals who have been mis-sold mortgages. The move by compensation companies has arisen after the Financial Services Authority has begun to investigate mortgage providers and irresponsible lending. One claims company, Brunel Franklin has stated that they have reclaimed £150million in compensation for customers who had been mis-sold endowments and payment protection policies. The Citizens Advice bureau has stated that the move by compensation claims to offer such services was inevitable, as major signs of irresponsible lending had become visible. They have also warned that many people may be able to complete their own claims and therefore the use of claims firm will not be necessary in all cases. Mortgage providers will be expected to pay the compensation in full if they are found to have been providing money to customers in a irresponsible manner. This news has come at a time when interest payments on mortgages are expected to rise significantly which may leave many households struggling to pay their monthly mortgage payment. The Financial Services Authority has stated that they will investigate any claims which are brought to their attention; if any claims are proven to be successful, the lender will not only be responsible for compensation payments but may also be open to further sanctions. Lenders which are found to have consistently broken rules in regards to sensible lending may face being struck off by the financial authorities. Compensation claims firms are now offering a no win no fee service, people who feel they have a case for compensation but do not feel they have the resources to complete their claim themselves should contact one of these firms. The amount of compensation which will be paid out will be determined on a case by case basis; the evidence which has been provided to prove they have been mis-sold a mortgage will contribute to this. Substantial claims are expected from people who have been mis-sold ‘tracker’ mortgages, such financial packages are based on the interest rate and therefore the monthly payments can fluctuate. Whilst at the moment payments may be low, these will significantly rise in the next months that may leave even more people realising they have been mis-sold their mortgage.