In Britain, it is important that we do not forget the plight of the mortgage prisoners, who are still paying a terrible price for the greed and folly that led to the financial crash.
They are devoted parents, loyal employees and honest taxpayers who have scrimped and saved to provide shelter for their loved ones.
Mortgage prisoners are trapped into paying higher rates of interest to their borrower because they cannot meet affordability tests, brought in after the financial crisis, despite making payments on their current, higher interest rate mortgage.
This has caused particular problems for borrowers who have found their debt sold on to unregulated private equity firms - the so-called vulture funds - that do not offer new mortgages or more affordable rates.
Last year, the All Party Parliamentary Group on Fair Business Banking and Finance estimated that there were up to 200,000 mortgage prisoners in the UK.
Earlier this week, I was contacted by Rachel Neale, the UK Mortgage Prisoners’ lead campaigner, who told me that customers of Northern Rock, whose homes were originally sold by Government-owned UKAR, have received a letter telling them that their homes have been sold “yet again”.
Ms Neale said: “The fact that this has been allowed to happen in the middle of a global pandemic is incomprehensible.
“We are calling on the Government and FCA to act now to stop this unfair practice towards mortgage prisoners. The complex trail of offshore and subsidiaries of book holders means that we do not even know who really owns our homes.
“The emotional, psychological, and financial impact that this is having on our members is unbearable. This discrimination and financial exploitation of vulnerable mortgage prisoners must stop now."
A Treasury spokesman said: “We know that being unable to switch your mortgage can be stressful. That’s why we’ve introduced rules that make it easier for some customers to change provider.
"We now want to see more people offered these new deals and have been working closely with the sector to achieve that. In March we introduced a three-month mortgage holiday for those struggling with their finances as a result of coronavirus, and 1.7 million borrowers have already benefited.”
UK Asset Resolution sold a portion of its mortgage book in 2014. The Government is not involved in the latest sale, which has so alarmed Ms Neale.
In the 2014 sale, the Government included non-negotiable customer protections, which included requirements that the loans must be administered in accordance with the Mortgages and Home Finance: Conduct of Business (MCOB) rules. All mortgages must be administered by an FCA regulated firm, according to these protections.
Earlier this year, the Economic Secretary wrote to UK Finance to urge the industry to do more to help those mortgage prisoners who are eligible to switch to a new deal.
The FCA said its work to support mortgage prisoners has continued during the disruption caused by coronavirus. So far, this action has resulted in reductions in mortgage payments for the vast majority of mortgage prisoners, by ensuring base rate cuts are passed on where possible, the FCA said.
The statement added: “These actions are in addition to the changes we made in October 2019 to make it easier for mortgage prisoners to switch to new lenders. However, the success of these changes depends on lenders offering new switching options to these customers.
“As a result of coronavirus, and particularly due to the difficulty in establishing property values and the Government’s advice to delay house moves where possible, we have seen significant changes to the mortgage market.”
Lenders have removed a large number of products from the market for all consumers since the beginning of March. Lenders have also faced challenges serving existing customers and have granted 1.6m payment holidays.
Realistically, the current economic conditions mean that lenders are not yet in a position to offer new options for borrowers, according to the FCA
The FCA’s rules, based on pre-coronavirus conditions, require firms to write to those who may be eligible letting them know they may be able switch their mortgage.
“However, given lenders’ inability to offer new switching options to mortgage prisoners it would be wrong to require letters to be sent to consumers at this time,’’ the FCA said. “We are extending the window during which we expect firms to contact consumers about switching options by three months.”
"We do not want mortgage prisoners to receive communications encouraging them to switch, when there are no suitable products available for them.
"We will keep this under review alongside other measures to support mortgage borrowers and are committed to working with industry to see this product development happen as soon as practicable.
"We recognise that our work to remove regulatory barriers to switching will not help all mortgage prisoners and that worsening market conditions will have implications for product solutions."
These are troubling times for the UK's mortgage prisoners. MPs can show they are in their corner by demanding the end of all sales of British homes to inactive, unregulated firms, particularly as the country heads into another recession.
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