In an exclusive in the Financial Times, Harcus Parker is reportedly preparing the case on behalf of 200,000 mortgage borrowers who argue they were kept stuck on rates of about five per cent for over a decade, despite interest rates plunging to record lows after the financial crisis and stayed low until roughly a year ago.
US private equity group Cerberus bought portfolios of home loans from Northern Rock after it was nationalised. It now holds the mortgages through its Landmark brand. Other companies also holding Northern Rock portfolios include Topaz Finance Limited which trades under the name Helidor Mortgages.
The contention from Harcus Parker is that these firms did not reduce the standard variable rate on these loans from five per cent, even though the Bank of England cut the base rate to as low as 0.1 per cent in 2020.
Firm ‘ready to sue’ if claims not settled
Matthew Patching, a senior associate at Harcus Parker, said the firm is readying to sue if claims are not settled before then. The move comes as the Bank of England continues to increase interest rates, forcing the standard variable mortgage rates even higher.
The legal firm has already launched a case against high street bank TSB over similar concerns. The bank bought £3.3bn of Northern Rock mortgages held by 27,000 mortgagors from Cerberus in 2015, and administrating the loans under its Whistletree brand.
The law firm maintains TSB continues to charge Whistletree customers a Standard Variable Rate (SVR) of more than double its charges to other customers in a similar position.
The court date for the group litigation against TSB is set for March.
