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‘Mortgage prisoners’ struggling to pay for food take legal action against TSB | Personal Finance | Finance
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.
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As we look ahead to 2024, many homeowners and prospective buyers are wondering what to expect when it comes to mortgage rates. The landscape of the housing market is constantly changing, so it’s important to stay informed about trends and predictions. In this blog post, we will discuss some factors that could impact mortgage rates in 2024 and what homeowners and buyers can expect.
One factor that could impact mortgage rates in 2024 is the overall state of the economy. If the economy is strong and growing, we may see higher mortgage rates as the Federal Reserve looks to combat inflation. On the other hand, if the economy is stagnant or in a recession, we may see lower mortgage rates as the Fed looks to stimulate growth. It’s important to keep an eye on economic indicators such as GDP growth, unemployment rates, and inflation to get a sense of where mortgage rates may be heading.
Another factor that could impact mortgage rates in 2024 is Federal Reserve policy. The Fed plays a key role in setting interest rates, and their decisions can have a ripple effect on mortgage rates. If the Fed decides to raise interest rates in response to inflation, we may see an increase in mortgage rates. Conversely, if the Fed decides to lower interest rates to stimulate growth, we may see a decrease in mortgage rates. Keeping up with the latest news and announcements from the Fed can give homeowners and buyers a sense of where mortgage rates may be heading.
In terms of specific cities and local mortgage companies, it’s important to note that mortgage rates can vary depending on location and lender. For example, in a city like New York City, where real estate prices are high, mortgage rates may be higher compared to a city like Indianapolis, where real estate prices are lower. Additionally, local mortgage companies may offer competitive rates and terms compared to national lenders. For example, in New York City, local lenders like Quontic Bank and CrossCountry Mortgage may offer specialized products and services tailored to the needs of local buyers.
It’s important for homeowners and buyers to shop around and compare rates from multiple lenders to ensure they are getting the best deal. Websites like Bankrate and LendingTree can be helpful resources for comparing rates and terms from multiple lenders. Homeowners and buyers should also consider working with a mortgage broker who can help them navigate the lending process and find the best mortgage product for their needs.
In conclusion, predicting mortgage rates in 2024 is not an exact science, but there are several factors that could impact rates. By staying informed about economic indicators, Federal Reserve policy, and local market trends, homeowners and buyers can make informed decisions about their mortgage. Shopping around and comparing rates from multiple lenders is key to ensuring you are getting the best deal on your mortgage. Whether you’re looking to refinance your existing mortgage or buy a new home, it’s important to stay informed and be proactive in managing your mortgage.
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