Thursday 11 March 2004

Bosses behind the mortgage crisis

If you're looking for "terrorists" in society then look no further, these guys are worse than the nutters with bombs strapped to them because they cause people to feel so desperate they kill themselves! I was actually sold one of these endownment thingies when I bought my house, but after a couple of months of thinking (and worrying) about the fact that my mortgage was tied to the stockmarket I switched the policy to a regular (rip-off) policy. So now intead of not being able to cover the mortgage I have to pay for three houses instead of one, some choice. When the chairman of Britain's biggest credit card issuer tells you that he doesn't have one because they're too expensive then you just know you're being shafted. Especially when it comes at the same time as the banks (who issue the plastic) are making profits so big that they could have paid to solve world hunger, and still had change from the 6billion!!!! There is no better testament to the fucked up nature of this world we live in than that. The whole convoluted system of Fractional Reserve Banking is a complete con, and all of us are getting shagged up the arse by balding, fat, ugly, greedy men in £6000 suits. Feels good doesn't it?

Click the image to see who designed it... The "fat cat" bosses of Britain's biggest insurance companies are condemned today in a devastating report on the £40 billion endowment-mortgage crisis.

The industry's key players stand accused of a "lamentably slow" response to the unfolding endowment-mortgage crisis, which has left millions unable to pay off their home loans.

The report, by MPs on the Treasury select committee, says confidence in Britain's financial services has collapsed as a result of endowment "mis-selling".

Around eight million endowments - long-term investment policies issued by life insurers - are still outstanding in Britain. Most were sold as a way of paying off interestonly mortgages - with a tax-free lump sum on maturity if the endowment ended up being worth more than the loan.

They were aggressively pushed at house buyers during the Eighties as sales teams earned commission on every policy sold. The majority were told the endowments were " guaranteed" to pay off their mortgages.

By the peak of the market in 1988 and 1989 more than four out of five mortgages sold in Britain were backed by endowments.

However, with lower interest rates and falling stock markets, more than 80 per cent of endowments are now projected to fall short of the mortgages they were taken out to pay off. The average shortfall is £5,500.

The chief executives of the five biggest sellers of endowments were hauled before the committee, chaired by Labour MP John McFall, in January.

The bosses, three of whom earn more than £1 million a year and who have enjoyed pay rises of up to 70 per cent since 1999, were told their salaries were "way out of line" by Mr McFall.

Today Mr McFall said the committee would return to investigate boardroom rewards in the insurance industry.

He added: "This is an industry still dominated by a commissiondriven culture that focuses on short-term sales with insufficient appreciation of its long-term care to its customers."

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