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UK Mortgage Prisoners call for ‘urgent and sweeping’ reform
The UK Mortgage Prisoner Action Group has called for “urgent and sweeping” legislative reform to help current mortgage prisoners and prevent similar situations from occurring again.
Mortgage prisoners are mortgage holders who are stuck on high standard variable rates with inactive lenders as books from failed banks were sold on following the financial crisis and remain unable to switch to a better deal due to stricter lending criteria.
There are estimated 200,000 mortgage prisoners overall and the government has made £2.4bn in surplus from selling mortgage prisoner portfolios.
The campaign group is calling for the mortgage prisoner cycle to be stopped by preventing homeowners being “ensnared by SVRs”, which it said can lead to loss of homes and life savings.
Other demands include guaranteed access to fixed rates, so that the “silent epidemic of financial stress-induced mental health issues” can be prevented by “restoring equitable lending practices”.
The group also said that non-lender mortgage holding should be prohibited so residential mortgages cannot be “pawns in a profit-driven game” and lending reforms should prevent them being transferred to “non-lending entities” as this leads to “economic injustice and social instability”.
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Mortgage ownership transparency should be improved so that borrowers can switch rates within financial groups “without opaque barriers”.
Affordability criteria should also be adapted with a “Grandfather policy” implemented to “avert a wave of homelessness” especially among the ageing population.
The UK Mortgage Prisoner Action Group finally called for a compensation scheme to be established to “address the financial haemorrhaging of those overcharged for years”.
Jill Hulme of the UK Mortgage Prisoner Action Group said: “This situation has now reached a crisis point. The UK Mortgage Prisoner Action Group demands bold legislative reform to dismantle the mechanisms of financial oppression.
“Without it, we face a national emergency of homeowner displacement and the consequent impact on community stability and mental wellbeing. The mortgage prisoner issue is a national scandal. Government knew detriment would ensue from how our high street mortgages were handled and sold. Securitisation has been a vehicle for profiteering. Ask any mortgage prisoner their story, we have all suffered immensely.
“Each mortgage is a home, a person, a family, years of suffering. The stories are harrowing. We have been made repeated promises by those in power that we are a priority. Empty words. Change must come now.”