The UK mortgage prisoner action group has launched its bid to get compensation for the thousands of UK mortgage holders who have been paying unreasonably high mortgage interest rates for the past decade since their mortgage has been either nationalised or transferred to a different lender who won't allow them to switch to a better mortgage deal.
Thousands of people who had taken out a mortgage with Northern Rock before 2008 found themselves locked into variable rate mortgages at as high as five per cent following the bank's collapse and nationalisation.
In other cases, mortgages were sold on to inactive lenders who would not offer their customers any new mortgage products. Some found themselves in dire financial trouble and had their homes repossessed, while others ended up paying up to tens of thousands more than people on better fixed rate deals.
You can join the claimants at the Mortgage Prisoners website if you have or have had a mortgage with Northern Rock, Bradford & Bingley, or Mortgage Agency Services 1-7 and you paid an overly high of interest without being able to switch to a better deal or remortgage with a different lender.
Following an investigation, the FCA (Financial Conduct Authority) have recommended that lenders relax their mortgage lending criteria for the so-called mortgage prisoners, allowing them to remortgage.
However, it remains unclear whether banks and other lenders will agree to take on these mortgage holders. Besides, only people who ended up trapped in a mortgage due to the 2008 financial crash will be eligible for the relaxing of the rules. A plan for transferring mortgage prisoners onto new mortgages is still being worked through by the Treasury and FCA.