I paid £91,000 more on my mortgage after being told I ‘can’t afford’ a CHEAPER mortgage

A MOTHER-OF-FOUR has had to pay more than £91,000 extra on her mortgage since the collapse of Northern Rock.

Mortgage prisoner Rebecca Wendel, a self-employed hairdresser, describes how she is stuck paying 9.79% interest on her mortgage loan.

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It means her mortgage bill is a whopping £2,150 a month – up from £1,049 in August 2022, when she was paying an interest rate of 6.75% above market.

Rebecca has been paying the costs on her mortgage since 2008, when Northern Rock, which held her mortgage, went bankrupt and her loan was sold to Heliodor Mortgages, part of Topaz Finance.

She is among more than 200,000 homeowners who have had their mortgages sold to financing companies, which still charge above-market rates for the loans.

These people have become known as mortgage prisoners because tighter credit restrictions mean they cannot pass affordability checks, which would give them access to lower interest rates.

Rebecca said: ‘It makes me angry that I paid so much extra money.

“My children didn’t have a childhood, they didn’t get to do things with their mother that they would normally do.”

Rebecca, 42, from Leeds

However, law firm Harcus Parker, which represents more than 10,000 mortgage captives, has secured its first High Court action against TSB to determine whether the bank financially exploited its Whistletree mortgage customers.

The law firm, which is pursuing a no-win, no-fee class action claim, believes that if the lawsuit is successful, it could set a precedent for all mortgage defendants, giving homeowners, including Rebecca, new hope.

Rebecca and her now ex-husband took out a £284,000 mortgage with Northern Rock in 2007.

But she still owes the full amount 17 years later, after being persuaded to switch to an interest-only deal nine months after the bank collapsed.

Their loan was sold to Heliodor Mortgages, but Rebecca has since been unable to switch to a more favorable mortgage agreement due to stricter credit criteria.

She has been struggling to pay the mortgage herself since 2016 and says the constant interest rate increases since December 2021 have brought her to a breaking point.

“It’s a constant, daily struggle to get up and get on with the day, knowing that at the end there’s nothing left but me to keep the roof over my head,” she said.

“I’ve been taking it for a month at a time now because it’s killing me. I’m working all the time, it’s just ridiculous.

“I don’t have a family life at all and we don’t do the things other families do because I’m not home.”

Harcus Parker hopes his latest claim against TSB and its subsidiary Whistletree will help mortgage captives at other companies recoup the difference between the high interest they paid on their mortgages and the interest they would have paid if their lender had charged the interest on a had set a lower rate. fair” level.

In response, Rebecca said: ‘If I can get the money back it would go straight out of my mortgage and I would be able to access a normal mortgage.

‘I would be about £1,000 better off every month, which is life-changing for someone like me.

‘The money would also allow me to stay where I am.

“Right now, I’m still 50/50 about putting the house up for sale. Part of me feels like that’s giving up.

‘But I also can’t afford to keep doing what I’m doing.

Damon Parker, senior partner at Harcus Parker, said: “Tens of thousands of mortgage holders are still stuck with these high interest rates through no fault of their own.

“We are hopeful that the trial in July this year will finally show that these people have been victims of abhorrent financial injustice and that they should be able to recover the excess money they have paid.”

The class action lawsuit represents both current and former mortgage detainees.

While Harcus Parker’s initial trial focuses on getting compensation for TSB’s Whistletree customers, customers at Helior, Landmark and NRAM are expected to be affected further down the line.

You can register your interest in the claim by visiting https://mortgageprisonersclaims.com/.

“Whistletree customers are not mortgage prisoners.”

TSB

Although Harcus Parker claims Whistletree customers are mortgage prisoners, TSB disagrees.

A spokesman for the bank said: “Since we took over the management of these mortgages, more than two-thirds of Whistletree customers have switched to a new mortgage or taken out their mortgage with Whistletree.

“We remind customers at least annually that they can switch, and this is prominently displayed on Whistletree’s website.”

However, the Whistletree mortgages were initially managed by Northern Rock (Asset Management) (NRAM) before July 2016.

At the time, there was no product transfer option within NRAM, allowing customers to move to better rates.

Because Harcus Parker’s claim involves current and former customers, they still claim that thousands of Whistletree customers could have once been considered mortgage prisoners.

This implies that they could still be entitled to compensation during the period when NRAM managed the book, and where customers were denied the opportunity to change providers or mortgages.

A report published last year found that the government had made as much as £2.4 billion from mortgage loans for prisoners.

After the crash, state-owned UK Asset Resolution (UKAR) took control of the mortgages and later sold them.

But in doing so, they had to maximize profits for taxpayers.

In 2009, the government recognized that the sale of these mortgages to inactive lenders could seriously harm consumers, but took no action to prevent this.