The Endowment Diary

The Endowment Diary

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The Endowment Mis-selling Debacle - one of the UK's worst financial scandals

Friday, August 21, 2009

Reality Dawns

Reality Dawns

As I have noted many times on this site, at some stage the hapless millions who were conned into buying useless, underperforming endowment mortgages will have to cover the shortfall when the policy matures.

The penny may finally be dropping, wrt paying off uncovered debt, as The Times reports that people are waking up to the problems of paying off interest only deals (an offshoot of endowments).

"Figures from the Financial Services Authority, which has regulated mortgages since 2004, show that 38 per cent of Britain's 11.1 million mortgage borrowers — or more than one in three — may have made inadequate provision to pay off their capital sum.

Many are in negative equity and the savings products taken out to cover the capital repayments have fallen short. That 38 per cent figure does not include those with endowments or buy-to-let investors who took out interest-only mortgages to keep the cost down
."

These policies are beginning ot mature at the very time the property market/economy is struggling to pull itself out of the mire.

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