MPs urge unregulated lenders to halt mortgage prisoner repossessions

The APPG says it is "unconscionable that these borrowers are now being forced out of their homes".

Rozi Jones
10th March 2020
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"Even though the FCA cannot compel them to oblige, they should certainly want them to act as responsible funds."

MPs from the APPG on Mortgage Prisoners are urging unregulated lenders to halt repossession proceedings against mortgage prisoners, after finding that a number of firms are taking action within months of acquiring loan books.

Last Friday, the APPG wrote to the CEOs of Heliodor and Computershare with concerns over their treatment of customers. However, the APPG says there are a multitude of other companies and funds involved, including Landmark, Cerberus and Tulip.

In the letter, MPs cited a Financial Reporter interview with Andrew Jones, CEO of Computershare, in 2016 in which he said: "As mortgage administrators we’re often one of the first places that people experiencing issues turn to about their money problems. We do everything we can to help customers avoid and recover from financial difficulty and, after over 25 years in business, we can predict accurately which accounts are likely to fall into arrears. We can see therefore a clear historical correlation between higher interest rates and people falling into debt on their mortgage, and a decrease in rates will obviously make it easier for some customers to make their payments.

"However, the education and outreach work that we do in conjunction with our charity partners emphasises the need for customers to build financial wellbeing that is not dependent on good fortune or variations in government economic policy. It’s all part of our approach that provides support to clients and customers from the day a loan completes to the moment that final instalment is made."

The APPG said the difficulties for mortgage prisoners" who have been paying often two or even three times normal market rates for more than a decade are well documented and it is unconscionable that these borrowers are now being forced out of their homes".

The APPG says it has been in daily contact with former FCA chief executive Andrew Bailey, who will shortly take up his role as Governor of the Bank of England, on this issue and agree that it would be "crass and immoral to force families from their homes at this point".

Rachel Neale, lead campaigner at UK Mortgage Prisoners, said: “The solutions working group cannot find a solution fast enough. Every day I am inundated with heart-breaking stories of people forced to live on the breadline or rely on food banks because they are being exploited by rapacious funds, most of whom are unregulated and do not have a license to lend in the UK. How is it possible this is allowed to happen, it is criminal.”

Seema Malhotra, chair of the APPG on Mortgage Prisoners, commented: “It is entirely within the gift of these funds to give people breathing space whilst we work through solutions. How the unregulated funds react to this will be telling. Even though the FCA cannot compel them to oblige, they should certainly want them to act as responsible funds. Their legacy should not be to extract every last penny from their portfolio whilst leaving a path of destruction in their wake.”

Kevin Hollinrake, vice-chair of the APPG on Mortgage Prisoners, added: “The damage inflicted on both SMEs and mortgage holders has been a total scandal. It is inconceivable and perverse that we require UK lenders to uphold high lending standards and then allow the sale of the loans they have made to UK consumers and businesses that do not have to observe these standards. We need these lenders to do the right thing and show immediate forbearance and respect the full extent of UK regulations and the Government to step in and quickly legislate to close this loophole.”

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