Thousands of so-called mortgage prisoners have been given a ray of hope with a fresh court case that could allow them to recoup punishing repayments.
The victims had mortgages with banks which collapsed following the financial crash of 2008 and were then sold on to other organisations.
Carol and Kevin Belson, of Swindon, are two of the 200,000 people caught up in this predicament after their mortgage with the failed Northern Rock was sold on to TSB Whistletree.
As a result, the couple are currently paying a punishing 9.54 percent interest rate on their home loan, which is more than double the figure of December 2021.
This staggering rise in interest rate translates to the couple having to pay just under £500 more in monthly payments, a total of £1,598.
Carol, aged 57, a customer care coordinator for a tiling contractor, said: “The repayment costs have been going up every month. We’re having to find an extra £500 a month at a time when our energy bills have also increased. We’re struggling to pay for food.
“There’s not much left by the time we’ve paid our mortgage and bills. It’s been a struggle for years. We haven’t had a holiday since 2009 apart from one weekend away.”
The couple are part of a 10,000 strong group who have signed up to law firm Harcus Parker’s group claim against TSB. They are hoping to recoup some of the additional money they have been charged.
Harcus Parker has secured a trial at the High Court against TSB in the week commencing July 22 to determine whether the bank financially exploited its Whistletree mortgage prisoner customers.
Damon Parker, senior partner at Harcus Parker, said: “Tens of thousands of mortgage prisoners are still stuck on these high interest rates through no fault of their own.
“The financial pressure has devastated all affected and has led to families losing their homes, relationship break-ups and suicides. These people have been desperate for help.
“It is our contention that these people have been terribly financially exploited and deserve recompense.
“We are very hopeful that the trial in July, this year, will finally determine that these people are victims of an appalling financial injustice and should be allowed to recover the excess money that they have paid.”
A report by the London School of Economics published last year found the government had made £2.4bn from selling mortgage portfolios yet had not helped those affected.
TSB has denied failing the Whistletree customers, saying they “are not mortgage prisoners”.
It told Mortgage Solutions: “Since we took over the management of these mortgages, over two thirds of Whistletree customers have either moved to a new mortgage or closed their mortgage with Whistletree. We write to every customer, twice a year, to remind them that they can switch.”
It is understood that the firm has invested over £1m and introduced the ability to switch to new Whistletree products and better rates.
Product transfers are available for those that are in arrears and may have negative equity, and customers can move to other lenders if they meet affordability and credit check criteria.
