In the letter, the campaigners wrote: “…we do not want to be left behind with this prime minister’s hope for our nation. We didn’t deserve this and should not continue to suffer.
“We ask that our people’s government demonstrate and provide a solution and reflect it in the chancellor’s Budget speech on 11 March 2020.”
Lead campaigner Rachel Neale met with the economic secretary to the Treasury John Glen yesterday morning to ask for more help to free borrowers trapped on costly mortgages arranged before the financial crisis when lending rules were less strict.
Many of these mortgages were then sold on to unregulated companies that do not offer new loans.
‘Batted everything back’
Later in a press conference at Canary Wharf in London, Neale described her meeting with Glen as “frustrating”.
She said: “We’ve been to see John Glen this morning who batted everything [we asked for] back to the FCA [Financial Conduct Authority] and the FOS [Financial Ombudsman Service]. He didn’t particularly want to engage with us and was probably more interested in the legal battle we have started which he obviously did not want to comment on.”
She added: “It was quite a frustrating meeting, and probably one he won’t want to do again.”
After the meeting, Glen tweeted: “This morning I met with #mortgageprisoners to hear directly about their situations. We know how difficult this can be, which is why we’ve worked to change the rules and I’ll continue to work with the FCA and banks on this important matter.”
And, earlier this week, in a letter to UK Finance CEO Stephen Jones, Glen said he was open to considering the extension of regulation to help mortgage prisoners.
Affordability changes ‘not far enough’
Relaxed affordability rules to help mortgage prisoners switch away from non-banking companies and inactive lenders were put in place in October.
Under the rules, lenders can choose to carry out a modified affordability assessment if the borrower is remortgaging the same loan amount, their current mortgage is up to date and they have paid it for the last 12 months, and the new deal has a lower interest rate.
But analysis of the mortgage prisoner group by the FCA, however, found only 14,000 borrowers were likely to be eligible and would benefit by remortgaging under the changes.
And as Mortgage Solutions exclusively revealed, the FCA did not conduct any analysis of those borrowers who were trapped by being presently or recently in arrears.
Neale said the FCA’s recent change to affordability rules for mortgage prisoners did not “go anywhere near far enough” and if Glen was unwilling to work with them it was time for more senior government action.
Another of the group’s demands is for the interest rates of those suffering from severe mental health problems to be reduced, but Neale said so far this been refused.