Dad’s bid to end home loans hell for thousands
HUNDREDS of thousands of householders have become HMP prisoners – in their own homes.
That stands for High Mortgage Payments that they should not be forking out.
Yet they’re trapped on punishing interest rate deals and unable to switch to cheaper ones – all because of home loan affordability rules that came into force after they took out their deal.
But today, one crusading householder reveals how he is determined to change all that – and lead a ‘prison’ breakout.
It was the Financial Conduct Authority which put so many families behind bars of insurmountable debt – by trying to do some good.
FCA rules were introduced in 2014 to ensure bad lending practices were stopped by enforcing strict checks on loan applications.
But the rigid regulations left many pre-financial crisis homeowners on interest-only deals unable to switch to a better option even if they could meet the payments.
So they’re stuck paying extortionate rates for their loan and unable to clear the debt, leaving them at risk of being homeless in older age.
The FCA is now aware of this and has plans to work with financial firms to ensure they can switch to the best loans – but it’s not happening fast.
And, meanwhile, families continue to struggle to meet rates up to 6% when there are deals as low as 1.39%.
Many of those trapped got mortgages with financial firms no longer active in the mortgage lending market – such as Northern Rock – so there are no alternative products available to them. Others are with firms outside the FCA’s control.
Dad-of-three Lester Schiffman is one of those trapped in high cost hell with an interest-only mortgage costing almost 5%. And he’s determined to do something about it
He took out his original loan on the family home near Ilford in Essex with Northern Rock. Since it went bust his debt was sold to a third party firm.
The problem is they aren’t active in the mortgage market, and he can’t move to a cheaper, more affordable deal elsewhere as he doesn’t meet the stricter lending criteria in which