Mortgage prisoners campaign group aims for charitable status

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.

Jill Hulme, a spokesman for the UK Mortgage Prisoners group said: “We are crowdfunding to cover the legal costs needed to set up as a charity.

“The group members are contributing what they can and sharing among family and friends but we really need to highlight the campaign to a wider audience and try and get as much support as possible.”

Ms Hulme said she planned to sit on the board of the charity’s trustees with lead campaigner Rachel Neale along with other supporters. Ms Hulme said the money being raised would cover the fees required to set up the legal arm of the charity for the application to the Charities’ Commission.

She added: “The Mortgage Prisoners’ Facebook group, with nearly 4,000 members has reached the stage where we need to move to the next level and become a registered charity.”

In June, a group of MPs called for a probe into the alleged exploitation of hundreds of thousands of mortgage prisoners by unregulated funds.

The All Party Parliamentary Group on Mortgage Prisoners has written to the Financial Conduct Authority and the CMA to call for an immediate investigation into “price gouging” by unregulated funds and inactive lenders.

The APPG is calling for a market wide margin cap of 2 per cent above the Bank of England base rate on all mortgage standard variable rates to be introduced “in order to provide immediate and effective relief to hundreds of thousands of homeowners that have been trapped on crippling interest rates for over a decade”.

The APPG on Mortgage Prisoners said that a survey by UK Mortgage Prisoners highlighted the “catastrophic consequences “ for key workers who are trapped on high SVRs. Many of these workers have been risking their lives during the pandemic, the MPs said.

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