Endowment Policy Never Set Up

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Who is responsible if a mortgage is set up without an endowment policy. My husband arranged a mortgage with Mortgage Trust through a broker. The broker worked out three different schemes and my husband took the paperwork to the Manager of National Westminster Bank for advice. After five years we discovered that the endowment policy had never been set up, by this time my husband was ill and could not get a policy to cover the mortgage. We were left with a mortgage that would never be paid off. The Broker had gone out of business, the bank was saying 'not my fault' so was the solicitor. We handed the keys back. Who should check that all paperwork is in place?

-- Elizabeth Lloyd (e.lloud@rhbnc.ac.uk), March 04, 2000


I spoke to a solicitor-friend about this. The solicitor has a duty to check that there is a sufficient policy to cover the mortgage, but it is not a legal requirement. It is odd that the lender and solicitor did not ask for proof that the policy existed. At the end of the day it is down to the borrower to make sure they have the policy in place. You should check the original paperwork you had from the solicitor and see if a mistake has been made. If you don't have it, then ask the solicitor, they are required to keep purchase files for 12 years.

Rather than hand over the keys you could have asked your lender to convert the mortgage to a capital and interest one.

-- pendle (pendle@amun-ra.demon.co.uk), March 07, 2000.

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