The UK Mortgage Prisoner Action Group is making an urgent plea for substantial legislative reforms in the mortgage sector.
This call to action comes in response to the dire circumstances faced by individuals trapped in predatory reversionary standard variable rates (SVRs) since the 2008 financial crisis, particularly those affected by the government’s bailout of banks like Northern Rock.
These ‘mortgage prisoners’ have suffered extreme financial hardship, mental stress, and in some cases, homelessness and loss of life.
For over a decade, these homeowners have been burdened with high interest rates, while others have benefited from historically low rates. The situation has been exacerbated by rapidly increasing monthly payments.
The group’s primary demands include an immediate stop to the sale of mortgages to non-lending entities, fair access to fixed-rate mortgages for all, protection for historic interest-only loan customers, and the establishment of a compensation scheme to address years of financial and emotional suffering.
The group stresses the importance of ending the ‘mortgage prisoner’ cycle to prevent further homeowner tragedies.
They emphasise the need for all mortgage holders, especially those currently facing financial duress, to have access to fair fixed rates.
Additionally, they call for an end to the practice of transferring residential mortgages to non-lending entities, which has contributed to widespread economic injustice and social instability.
A crucial aspect of their demands is the need for clarity and transparency in mortgage ownership, allowing borrowers to easily switch rates within financial groups, thereby avoiding unnecessary financial strain.
They also advocate for adapting post-2008 Global Financial Crash affordability criteria to avoid trapping pre-crisis mortgage holders in a regulatory limbo, potentially leading to homelessness.
Lastly, the group insists on establishing a compensation scheme as a form of restitution for those who have been overcharged for years, acknowledging the profound financial and psychological impact this has had on affected individuals and families.
The UK Mortgage Prisoner Action Group underscores that this issue has reached a crisis point and requires immediate, bold legislative action.
Failure to address these concerns, they warn, could lead to a national emergency characterised by widespread homeowner displacement and significant impacts on community stability and mental health.
The group describes their situation as a national scandal, criticising the government’s handling of mortgage securitisation and highlighting the personal, often harrowing stories of those affected.