THOUSANDS of mortgage borrowers could get a share of £150 million compensation if a legal battle succeeds.
Law firm Harcus Parker is taking group action on behalf of customers of former lender Northern Rock.
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Thousands of people were left trapped on expensive standard variable rates (SVRs) when the firm went bust during the financial crisis.
Harcus Parker says that in some cases people have been trapped paying over 5% interest on their mortgages for more than a decade.
Harcus Parker is representing 5,000 customers, but it believes there are around 200,000 potentially eligible claimants.
Matthew Patching, a senior associate at Harcus Parker, said the firm is preparing to sue if the claim isn’t settled.
He said: “We are being instructed by more and more people who, after taking out mortgages with Northern Rock before the financial crisis, have been stuck paying very high standard variable interest rates at times when most of the market has enjoyed access to unusually cheap lending.
“It is difficult to overstate the effect this has had on our clients, who have often found it tremendously difficult to hear that they ‘cannot afford to pay less’.”
If it is necessary to sue, then a group action claim will be launched.
It will be similar to one launched for EasyJet customers who were targeted in a cyber attack and had personal details stolen.
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There’s no guarantee the Harcus Parker lawsuit will be successful, as it depends on the High Court’s decision.
And usually in suits such as this, the law firm will take a cut of the compensation if the claim is successful.
Anybody who has ever had a mortgage administered Landmark Mortgage Limited, NRAM Limited, or Topaz Finance Limited can join the claim by visiting www.mortgageprisonersclaim.com
It comes after Harcus Parker issued proceedings against high street bank TSB.
TSB bought £3.3bn worth of mortgages from Northern Rock, which collapsed following the 2008 financial crisis.
The mortgages were administered under TSB’s “Whistletree” brand.
What is a mortgage prisoner?
A mortgage prisoner is a borrower who is trapped on an expensive mortgage deal and unable to switch to a cheaper one because they don’t pass affordability tests.
An affordability test assesses whether a borrower can afford monthly payments on a mortgage or re-mortgage and whether they should be offered a loan.
Having a large mortgage or being on a standard variable rate (SVR) mortgage, which will change depending on your lender, can make it hard to pass an affordability test.
If you think you might be eligible for a payment under Harcus Parkers’ suit, it’s worth speaking to a free mortgage broker to see what your options might be.
Some options could include London and Country or Trussle.
Any customers who bought one of Whistletree loans is eligible for a claim.
And those who took out a “Together Mortgage” may be able to seek additional compensation.
To join the claim, you can go online. You could be in line for £50,000 in compensation or more.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected]
