Problems with endowment payment and paying mortgage off

[Migsy]

My brother has encountered a problem that 10 weeks down the line, is still no further forward. If anyone can advise/help, it would be much appreciated. It's a bit of an odd one!

His endowment policy completed back in July and was such that the money released goes straight to his mortgage company to pay off his mortgage (no issues with values as part was changed to repayment 20 years ago).

The issue is that the endowment company say they've done everything in their power to send the money to the mortgage company, but the mortgage company aren't doing anything in response.

27 phone calls in total later (to both parties), no-one at either company is taking responsibility to try and tie up the two, bro is still paying interest on his mortgage that he shouldn't be and he is at the point of writing to FCA or whoever...which will delay sorting it by more months I should imagine.

So, what does he do next?

I've told him to write to all the directors of both companies at their home addresses - someone should at least pick it up from that?

The mortgage company's latest is they can't find the endowment policy....err, that's because my brother has it. Apparently mortgage company won't do anything until bro receives the letter they sent yesterday saying they don't have the policy! He has asked both companies to talk to each other - they say they will then they don't.

The endowment company's latest is they're waiting to hear back from the mortgage provider (having heard nothing at all directly from them over the 10 weeks).

Suggestions anyone?

[Simpo Two]

I'd certainly stop sending the mortgage company any more money.

Other than that it sounds like the usual corporate foul-up caused by too many computer systems and not enough empowered/interested staff.

Do they have a branch he can visit?

[davepoth]

Start the complaint process with both companies - you need to exhaust that before going to the Ombudsman. I wouldn't stop paying the mortgage company - "your home is at risk..." etc. etc., he'll get the money back in the end if the account's in credit.

[Migsy]

Thanks guys.

He is continuing to pay the mortgage interest amount - he doesn't want non-payment markers on his credit record and he'll pursue the overpaid amounts once his mortgage is closed.

There is an update - postman has just delivered a cheque from the endowment provider for £75 in relation to his complaint letter some weeks ago. He's not planning to cash that until the endowment company have paid the mortgage company and its against his account. Sorry, forgot to say he's already gone down the complaint route with both. He's not heard back regarding the complaint from the mortgage provider.

He's just left a message on a local radio consumer programme to see if they'll take his case on. That might kick some backsides into action.

I'll suggest a branch visit, I don't know if he's done that or not.

[Rick101]

So where does the money sit now, or do neither party know?

Can you get the endowment company to make payment direct to you? Its your policy after all.

[ghamer]

I don't get it what's the bank got to do with it?The mortgage is long gone its a repayment now.The cheque surely should go in his name to his home address.I,m in the same situation so this is what I,m expecting to happen anyway.

[Migsy]

The money still sits with the endowment provider and no, they won't pay it to my brother direct, he's asked. I found that bizarre too, but apparently it was a standard with endowment policies back then.

What's not clear? Endowment policy matures and proceeds need to go to pay off the interest only mortgage. He changed part of his mortgage to repayment to cover projected shortfalls a few years later. So the endowment policy and money is still needed to pay off the interest only bit (the bigger bit). What is left over after mortgage is closed should be given to him by the mortgage provider.

The problem is simply getting the mortgage provider to sort out receiving the money from the endowment provider - the former say they cannot write to the latter requesting it because of data protection, so the latter has to do the running. The latter does the running to no response from the former.

See the problem?! It's going around in circles!

[Migsy]

ghamer said:

I don't get it what's the bank got to do with it?The mortgage is long gone its a repayment now.The cheque surely should go in his name to his home address.I,m in the same situation so this is what I,m expecting to happen anyway.

That's a different position to my bro. He's got (or had!) part interest only and part repayment. If you change all to repayment then the endowment policy I'd have thought would go to you. Its odd his won't pay out direct to him, I agree.

[ghamer]

Migsy said:

That's a different position to my bro. He's got (or had!) part interest only and part repayment. If you change all to repayment then the endowment policy I'd have thought would go to you. Its odd his won't pay out direct to him, I agree.

I,m with you now.No wonder the country hates financial institutions at the moment.As mentioned he has to exhaust the complaints procedure first.bds

[skeeterm5]

ghamer said:

I,m with you now.No wonder the country hates financial institutions at the moment.As mentioned he has to exhaust the complaints procedure first.bds

I suspect the issue is that in the past the mortgage company took an assignment over the endowment policy in order to secure the mortgage. Hence the inability of the endowment provider to send the money to the individual.

Surely the simple solution is to provide the endowment provider with the mortgage account details and get them to just make a payment by BACs directly to the mortgage account. This will either reduce the balance or put the account into credit. Either way issue sorted.

S