Mortgage Prisoners - Let Battle Commence!

The banks were saying "You can't afford to pay less"!!!

THIS WAS WRITTEN 31 JULY 2018, before Panorama exposed the Cerburus scandal - but ANYONE who feels they were unfairly put on SVR and denied a better rate should put pressure on the banks and regulators.

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So, after dragging their heels for years, with the FCA (the cornerstone of 'Fairness' purportedly) having proved themselves utterly toothless, the banks are finally going to be writing to mortgage borrowers stuck on high interest rates (typically SVR) before the end of the year to offer them a better deal ... still in no hurry, then ...
 
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 / Whistletree, who are likely to slip through the net again because they were companies formed specifically to take over NRAM's loan book, are unregulated and failed 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!

Please feel free to comment below - comments are moderated prior to being posted.

Beefing Up the Price of Meat

When the horse meat scandal first broke, my immediate thought was "If the price of meat goes up now, it would suggest that the supermarkets had been implicit all along and knew what they were buying", because the deception and profiteering would have been occurring further down the chain if they'd been paying normal market prices for their raw ingredients.

Well, prices are going up - and some of the explanations we're being offered don't sit well with me because, as with the finance industry, we're again being asked to stump up to meet the costs of ensuring that others will now act with the honesty and integrity we'd previously expected to take for granted (remember the Financial Services Authority's edict that banks should now adhere to the principle of 'Treating Customers Fairly'? ... duh!).

And, drawing further stark parallels with it's identically-acronymed (FSA) and equally ineffective financial watchdog counterpart, the toothless Food Standards Agency has abysmally failed to exercise even the most fundamental duty of care to the consumer.  Surely one of its first functions should have been to, erm, monitor that food was up to a certain standard. Caught napping, it will probably now put out a radical new directive like "The description on food packaging should be accurately representative of its contents or else we may, in the unlikely event of actually holding anyone to account, fine them and pocket the proceeds so that we can continue to fund our valuable work".

So now the cost of DNA testing is being held up as one of the reasons we'll pay more for meat.  Another, based on consumer behaviour in the immediate aftermath of Horse-Gate (a significant drop in processed food sales), is that market forces will come into play as a result of the increasing demand for fresh meat produce.  I can see this, but again we're paying the penalty for a change in consumer behaviour brought about as a direct consequence of the actions of the unscrupulous.

Dr Pamela Robinson, a former Tesco executive and now a lecturer in international food chains, warns that it's inevitable that supermarkets will have to put up prices to guarantee quality.

So they didn't care before?