Mortgage Payment Protection Insurance (MPPI), Mortgage Payment Protection Plan (MPPP), Mortgage Protection Plan (MPP), Mortgage Protection Insurance (MPI), Payment Protection Plan (PPP), Payment Insurance (PI), Mortgage Insurance Plan (MIP), Mortgage Plan (MP) etc etc has been sold alongside Mortgages for over a decade. Borrowers paid for an insurance policy to make sure their Mortgage payments would be covered if they were unable to work.
It seems a great idea, especially when you consider the financial upheavals we have faced with over the last five years. Unfortunately, many thousands of these policies were mis-sold in the same way PPI was mis-sold on Loans and credit cards.
Selling Mortgage Payment Protection Insurance was not only profitable for Banks & Building Societies but for sales staff and Brokers who often received massive commission for selling the policies. A problem with paying high bonuses on sales of any product is that rules are often ignored. When the sales become about volume, rather than the client, suitability and criteria tend to be forgotten.
If your case is successful the Lenders must repay all of the Mortgage PPI payments you made plus the interest and, in some cases, potentially 8% interest for each year you had PPI on top.
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