Most creative of mortgages went wrong

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Endowment mortgages have long been feted as the one of the most creative mortgage arrangements ever created. Endowment mortgages are mortgages where only the interest on the principle of the mortgage loan is due. The principle of the loan is then covered by a type of insurance known as an endowment insurance policy. The endowment policy ensures the mortgage holder will be able to pay off the loan when it comes due. In the UK, endowment policies are known as endowments.

In recent years many mortgage holders have ended up selling off heir endowment policy at ridiculously low prices that do not cover the mortgage principal. The UK government ahs been forced to pass legislation and to encourage people to sell off their endowments by selling through endowment selling services.