Coping with a sudden endowment shortfall

The Financial Ombudsman Service is bracing itself for a rise in complaints about with-profits mortgage endowment policies over the next couple of years.

In 2012, it will be a quarter of a century since banks and building societies really started pushing endowment mortgages on the back of a (then) soaring housing market. As the typical mortgage lasts for 25 years, there will be possibly hundreds of thousands of endowments maturing.

Unless the fortunes of the stock market are totally transformed in the next year or two, the majority are likely to leave their holders disappointed, at best with a much smaller surplus over their mortgage than they were originally led to believe and at worst with the policy proceeds proving woefully inadequate to meet the mortgage debt.



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Corp Bond Sales,Fed Meeting Keep Investors Busy

A bevy of corporate bond sales, Berkshire Hathaway Inc.'s (BRKA, BRKB) takeover of railroad operator Burlington Northern Santa Fe Corp. (BNI) and the start of the Federal Reserve monetary policy meeting kept credit markets busy Tuesday.

The Fed is due to release a statement Wednesday afternoon on the latest outlook on inflation and the economy. The focus is likely to be on any change in wording on the Fed's exit strategy to unwind the massive stimulus as the economy heals.

Many portfolio managers, worried about the impact of the Federal Reserve's removal of its market props, already are turning their ...



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