Endowment Mortgage

strongbow2

I have an endowment mortgage due to mature at end of this year, there will be a considerable shortfall in the policy that was to cover the mortgage, I was thinking of going down the legal route regarding the shortfall in the policy but have been informed that this is not possible now due to (Hall V ACC Irish Supreme Court 2012) judgement.
Does anyone know what this judgement was.

killers1

strongbow2 wrote: »

I have an endowment mortgage due to mature at end of this year, there will be a considerable shortfall in the policy that was to cover the mortgage, I was thinking of going down the legal route regarding the shortfall in the policy but have been informed that this is not possible now due to (Hall V ACC Irish Supreme Court 2012) judgement.
Does anyone know what this judgement was.

Have a look through courts.ie and you should be able to find the judgement details.

The J Stands for Jay

Who are you thinking of taking to court?

strongbow2

Thinking of taking the company that sold me the policy to court, for poor performance of the policy.

Scortho

strongbow2 wrote: »

Thinking of taking the company that sold me the policy to court, for poor performance of the policy.

Does it mention past performance not being a guarantee of future performance?

strongbow2

No it does not.

It says that:-

''Irish Life have two safeguards in place for repayment of the mortgage capital at the end of the term. Irish Life uses a conservative growth rate assumption in setting premium rates - 7% per annum for the indexed premium payment plan (Homeloan Account) and 7.5% for the level payment plan (Level Homeloan Account). The average performance of Irish Life's managed fund over the period 1974 - 1992 has been 13.4% per annum. Whilst this was achieved in times of unusual economic circumstances Irish Life expects an average growth rate of 9.25% per annum based on the company's assumption of a future low inflation environment. This provides a considerable margin over 7.0% and 7.5% assumed in setting premium rates for repayment of the loan and so provides security for the endowment mortgage holder''.

I also have a Select 5 Homeloan Quotation that was given to me setting out the repayment plan. It shows a surplus of £13179 at the end and growth rate of 9.25%.

The J Stands for Jay

Poor performance wouldn't be likely grounds for a wining case. Poor advice at the point of sale would be much more likely to win.

Did the person selling the mortgage to you warn you of the risks associated with an endowmwnt mortgage? Did they tell you it would guarantee to pay off your mortgage?

strongbow2

They did but I am statute barred from bringing a case re. sale of policy because it was more than 6 years ago.

Liam D Ferguson

I know that some years ago, when similar cases starting coming to light, the life companies began sending out "reviews" of these endowment policies warning people of potential shortfalls and what they should do about them (i.e. lower your expectations or increase your contributions). Did you receive any such warnings along the way?

Scortho

You could look into this:
http://www.askaboutmoney.com/showthread.php?t=140170
Even though they were sold the product in the 90s, they were still compensated.
Was it with an uk or irish company?

tony81

9.25% was far too optimistic and wouldn't be quoted nowadays. At the time however it was probably valid and had the financial crisis not occurred you would have been sitting pretty right now.

Another problem is it's possible Irish Life did not sell you the plan, but rather a third-party broker.