JSMedia – Mortgage prisoners are challenging lenders in a group legal action in the UK. This is an unprecedented move by a group of borrowers. The UK mortgage prisoners group, which represents around 4,000 individuals, says many members are paying far more than the market standard variable rate – which is the default rate on fixed-term mortgages. The UKMPAG says the government should back the claim and encourage more people to join the campaign.
The UK Treasury has warned the industry not to fail to review mortgage rates and has written to firms with rate setting power to ensure borrowers are treated fairly. The FCA has said that these firms should make sure they do not impose unjustified burdens on mortgage borrowers. It also said the FCA would take action against those that fail to do this. These new rules have a major impact on the UK housing market.
The government is trying to address the concerns of mortgage prisoners. The Financial Conduct Authority and UK Finance have listened to the concerns of these people. The company Northern Rock Together Mortgages has interest rates of up to 15% and the group is calling for overpayment compensation. The Co-operative Bank has not responded to the demands of the group, but it is still working to address the situation. A new consultation on the issue will open in January 2019.
Mortgage Prisoners Challenge Lenders in Group Legal Action
There are a number of different ways to go about the challenge. The APPG on Fair Banking is taking the lead and has secured a backbench business debate. MPs arguing for fairness, redress and a public inquiry are watching from the gallery. The group has been backed by industry, the media, and many experts. You can see why this campaign is important. If you’re a victim of a high-interest loan, take action now to challenge the lender and receive fair compensation.
The mortgage prisoners are fighting to gain their rights. Re-mortgaging is the only way to reduce monthly outgoings. In this case, you’d be able to remortgage your mortgage with lower interest rates. It is the best option for those who cannot afford to pay high interest rates. A remortgaging would help them to free themselves from their debt. So, it’s worth fighting for this right.
Several years ago, the government rescued Northern Rock, but this bank went bust. Thousands of people were left on expensive SVRs, and they are trapped in a cycle of high interest mortgages. These loans were not affordable and it’s almost impossible for people to change the lender. However, the Government stepped in to bail out Northern Rock and forced the lenders to offer new deals to these customers.
The FCA’s report in May 2018 showed that there are more than 150,000 mortgage prisoners in the UK. The FCA thanked MSE for its research and facilitated the help of 30,000 mortgage prisoners. These figures mean that a quarter of a million people are currently stuck in their mortgages. As a result of this, a quarter of a million people have been suffering from a high-interest rate since the 2008 financial crisis.
The FCA has changed the rules to help these individuals. The new mortgage lending rules will help mortgage prisoners to avoid the problem of being stuck in a home for a long time. The FCA has already introduced a group legal action to help these individuals. It is hoped that this will force these lenders to lower their SVRs. Despite the new rules, the British government will not intervene directly in these cases.
The new law was designed to help people in this position. The FCA is the watchdog agency and is currently in charge of overseeing the mortgage lending sector. The MPAG has the power to take action if they’re not treated fairly. The amendments will prevent the creation of new mortgage prisoners. In the meantime, the British government can use the existing laws to lower interest rates and help mortgage prisoners move away from their current loans.