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Response to On the MIG question

from M Amos (idgroms@hotmail.com)
Tracey/Sue,

Some points below from a solicitor which I think will answer your postings above.

1. A borrower dose not 'buy' a MIG - s/he just pays for the lender to buy a MIG

2. As nothing is bought, there is no claim for misselling, but there could be a claim for misrepresentation regarding the terms of the mortgage,i.e. of the effect of a MIG (but this is very difficult to prove).

3. It doesn't matter that there is nothing in documentation stating that a borrower will be liable for a MIG payout - liability comes under subrogation under the old 1865 Act, although it has been described as both an equitable principle and a common law one!!

4. The issue of subrogation in insurance cases is nothing new or unique - it is well estabished.

5. The last point about a person who has paid an insurance premium not being liable to reimburse an insurer may well be correct. But it does not apply to MIGs, as the contract is between the insurer and the lender - the borrower does not have a contract with the insurer and does not pay the premium (although s/he has to reimburse the lender for the premium that it pays, this is not the same thing).

(posted 7717 days ago)

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