|The banks were saying "You can't afford to pay less"!!!|
I've previously blogged here (with links to earlier posts) about their appalling exploitation of borrowers who were already struggling and more recently I've contributed to the Facebook group 'Mortgage Prisoners UK' - people trapped in unfair deals for any number of reasons.
There are all sorts of excuses the banks have used to try to justify applying higher rates but, given that FCA was usually way behind the ball or at best woolly in its guidance, they got away with it by hiding behind the biggest smokescreen of all - that they couldn't disclose the reasons for their lending decisions because they were "commercially sensitive" - which gave borrowers seeking to complain to the Ombudsman (FOS) no grounds to contest. In the meantime they continued to conveniently misinterpret, ignore or straight out disregard the spirit of the guidance provided and the plight of those they knew they had over a barrel.
Well at last, and largely due to Money Saving Expert's relentless efforts to raise the profile of this issue, we have some sort of tenet admission by the industry that things need to change, but the battle's not even half won. Many of those in the Facebook group - possibly the majority - had their Northern Rock loans taken over by the likes of Landmark, who are likely to slip through the net again because they were companies formed specifically to take over NRAM's loan book and are hence unable to offer new products. Can you imagine having been a Northern Rock borrower and having the decision about who your new provider would be taken away from you, therefore leaving you exposed to being held to ransom?
And that's still not where it ends - people were put on SVR for many other reasons, including arrears resulting from a change in income. Suddenly they were a higher risk, so they were put on a higher rate at the next anniversary of their loan - despite the guidance saying that affordability checks shouldn't be applied to existing loans. And, when they were back in the black, banks like Santander KEPT them on the higher rate for an additional year, to prove they could afford to go back to a lower one!
This is in my view the biggest scandal since PPI mis-selling ... and it's gonna run and run a while yet because nothing has been done to address retrospective complaints made to FOS, who are refusing to re-open those cases because they were ruled on at the time. Well, if PPI claims could be backdated, and we're receiving clear signals from this most recent announcement that the banks are trying to address their impropriety, affected borrowers should be reimbursed for the difference between what they were asked to pay and any cheaper options that should have been made available to them at the time.
I urge any mortgage prisoners to make as much noise as you can to be compensated for the financial and emotional stress you've been subjected to as a result of this issue.
Thanks also to news organisations who have picked up on this - several of whom who have representatives posting on the Facebook page seeking personal stories to feature in articles. Get yours heard!
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