Does this sound legal?

hairypigeon

In 2008 Bank gave my dad a joint mortgage over 40 years with a friend both are in their 50's.

They precondition the loan by saying that the two guys needed to have life policies to be assessed for loans, the lads refused given extortionate cost and the bank varied their credit risk terms and gave them the money over 40 year with no cover or medical?

Basically they assumed they live to 90 odd and didnt provide for any protection

Are there not laws around preconditions on loan being there to protect both sides and more importantly lending codes preventing this type of long term lending to older people?

NoQuarter

It sounds legal in that they negotiated a contract and signed it.

Anyone

It appears legal from what you say. In 2008 I'm sure the bank felt it was secured against the property.

Quick question though, why would two people in their 50's agree to borrow over 40 years?

hairypigeon

you're asking me!

bank still is secured but no-one in my family has lived past 80 i thought the bank had to act responsibly with the terms it offers.

we shall not mention negative equity

they effectively gave out a multi generation mortgage though

Nonoperational

Why on earth did your Dad take a 40 year mortgage at that age? Crazy.

Anyone

hairypigeon wrote: »

you're asking me!

bank still is secured but no-one in my family has lived past 80 i thought the bank had to act responsibly with the terms it offers.

we shall not mention negative equity

they effectively gave out a multi generation mortgage though

Does your dad have not to act reponsibly? Did he not realise he was signing a multi generation loan? Did he not think the property might drop in value?

I'm guessing your dad wasnt buying the family home. Was this some sort of investment property?

hairypigeon

Anyone wrote: »

Does your dad have not to act reponsibly? Did he not realise he was signing a multi generation loan? Did he not think the property might drop in value?

I'm guessing your dad wasnt buying the family home. Was this some sort of investment property?

Guys agreed and sentiments echoed, in actual fact it was his house not an investment. Obviously can't get into exact ins and outs

But my initial question stands surely a bank has to have some restriction from lending beyond actuarial life expectancy of an individual.

Dad is not the smartest tool in the shed in this regard but surely a bank has to have a higher duty of care to a consumer

Corkbah

hairypigeon wrote: »

Guys agreed and sentiments echoed, in actual fact it was his house not an investment. Obviously can't get into exact ins and outs

But my initial question stands surely a bank has to have some restriction from lending beyond actuarial life expectancy of an individual.

Dad is not the smartest tool in the shed in this regard but surely a bank has to have a higher duty of care to a consumer

both have a responsibility ... so if you (your dad) blames the bank... the bank can blame him .... and I doubt that the bank initiated the sequence of events .... so ultimately... you (your dad) started the chain of events so needs to accept responsibility for his actions.

chris85

In fairness the bank attempted to act responsibly by requesting life cover be taken. Your dad refused to do this, of course it would be expensive for this given the age profile. Effectively the bank considered that the security of the property would be enough to have when the customer may pass away at some point.

Does your dad have savings/investments apart from this? The bank may also have considered that if he had these the risk would be less due to more money to your dad's name upon passing which would help to discharge the mortgage owing.

daheff

Possibly your dad may have some conplaint against his solicitor for not advising against the excessive duration of the loan contract in respect to his age.

P. Breathnach

So long as the borrowers can service the loan, they have no problem.

It might be a bit tricky if one died and the other could not keep up the repayments.

Why should either of the borrowers worry if there was a balance outstanding on the loan after their deaths? I presume they didn't borrow to create an inheritance fund, but in order to have a place in which to live.

the groutch

can't see anything illegal about it, sounds like your dad is just trying to find loopholes to wriggle out of his obligations now that things aren't so rosy.

killers1

The term of the mortgage doesn't make sense.. Bank's wouldn't have given people in their 50's a 40 yr term. Was anyone else party to the mortgage? Under the Consumer Credit Act people over the age of 50 are entitled to waive the requirement to have life cover in certain circumstances one of which is if the premium is overly expensive. It sounds as though they fell into this category and decided to waive life cover but I'd still question the term. It could well have been a bank error to issue it over that length of time because at no stage we banks lending up to age 90+!

The_Morrigan

I recall from my days in the branches that retirement age was the limit on any given loan, so 60-65 years of age.

However, I also remember years ago one of the banks had a product for late life mortgages/remortgages that passed onto one/all of the children on the death of the parent. I wonder if this was one of those?