HOMEOWNERS who have held TSB mortgages could get compensation after a High Court hearing to rule if the bank exploited customers.
Thousands of Brits became ‘mortgage prisoners’ trapped paying high interest rates after the 2008 crash.
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Law firm Harcus Parker say TSB put borrowers on its Whistletree brand paying rates as high as nine per cent.
This came after TSB bought £3.3billion of Northern Rock mortgages when the bank collapsed.
The law firm now wants the High Court to force TSB to write to its 27,000 customers telling them they could have a legal claim.
Damon Parker, senior partner at Harcus Parker, said former and current TSB customers should sign up to the claim fast as legal time limitations could reduce the amount of compensation they receive.
He said: “The fact that we will now have a trial to decide if TSB has breached the terms of my clients’ mortgage contracts is very positive news.
“It means that the whole process can be expedited.
“We are confident in our contention that Whistletree customers were unfairly trapped on high interest rates and that they should be repaid back the extra money TSB unfairly charged them.
“We hope that it will set a legal precedent for all mortgage prisoners who have endured financial misery through no fault of their own.
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“While these people have suffered, large institutions have made hundreds of millions of pounds.”
Mr Parker said “that simply cannot be right”.
He continued: “We do not want mortgage prisoners to wait and see what happens because TSB will argue that every day they delay starting their claim will reduce the final amount of money that they can recoup.
“It’s really important if you think you have a claim to join up as soon as possible.
“We are offering to help people on a no win, no fee basis.”
Homeowners who could not pass affordability tests to get new mortgage providers and leave Whistletree have found they’ve been paying above the market rate for years.
A report by the London School of Economics estimated the government made £2.4bn by selling mortgages from collapsed lenders to investment firms.
NEW ADVENTURE TURNED NIGHTMARE
Upholsterer Paul Parker, 48, bought his first home with his future wife in 2005.
At first it seemed like an exciting new adventure but when the banks crashed three years later their three-bedroom Victorian terrace in Darlington, County Durham, became the bane of his life.
Paul’s Northern Rock mortgage was sold on to new lenders leaving him stuck with years of inflated repayment costs of 5.9 per cent interest on the £75,000 he borrowed plus a £10,000 loan taken out at the same time.
His latest mortgage payment rate with TSB’s Whistletree brand now stands at 7.88 per cent.
Paul later rented out his property and moved elsewhere to try and make ends meet.
He said: “The house in Darlington has had a huge affect on every aspect of my life.
“I’ve had to work extra hours just to keep up with the mortgage payments and make up
“It wasn’t just paying the extra amount to make up the mortgage but paying for all the maintenance costs.
“Having to work all the extra hours meant seeing my kids less and the high mortgage costs meant that there was less money for nice things like holidays and meals out.
“The stress of it all put a strain on my family life.”
Paul added: “I’ve got seven years left and I feel I need to pay off the rest of mortgage just so I get something out of it.
“It’s frightening how much extra money we’ve paid.
“It’s so unfair we’ve been put in this position through no fault of our own.”
There’s a hole in the roof that needs to be fixed but we can’t afford it
Natasha Burrows
Professional dancer Natasha Burrows, 42, says being a mortgage prisoner means she has has been financially left behind compared to her friends and family.
Natasha bought a three bedroom house in Bristol in 2006 but when the financial crisis struck she struggled to afford the high interest rates.
While many of her friends and family were enjoying mortgage interest rates of less than two per cent, she has been paying upwards of 6.3 per cent.
When Northern Rock went bust, Natasha’s mortgage was initially sold to NRAM and then onto TSB’s Whistletree brand.
Natasha said: “For nearly 18 years we’ve been in the house and unable to afford to make home improvements because we have been paying high rates of interest on the mortgage.
“There’s a hole in the roof that needs to be fixed but we haven’t been able to afford it.”
The 42-year-old said it had “been a real struggle”.
She continued: “We can’t go on holiday and do things that other people have because we just don’t have the money.
“If we can get some of the money back that we’ve paid as a lump sum it’ll make a huge difference to us.”
A two-day High Court hearing is expected to begin next year.
TSB said customers can choose to switch their mortgage or leave Whistletree.
A TSB spokesman said: “Whistletree customers are not mortgage prisoners.
“Since we took over the management of these mortgages, over two-thirds of Whistletree customers have either moved to a new mortgage or closed their mortgage with Whistletree.
“We write to every customer, twice a year, to remind them that they can switch.”
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