‘I paid my mortgage for 36 years and still lost my home’

Mortgage prisoners tell Ruby Hinchliffe how they were driven to desperation after becoming stuck on interest-only loans while rates soared

Yorkshireman Chris Fleming had been paying the mortgage on his family home since 1987. Despite decades of repayments, his house was repossessed last year and sold at a £100,000 discount by his lender.

The father of three is just one of 200,000 borrowers who have been stuck on interest- only mortgages which were sold off by the Government’s state bank UK Asset Resolution (UKAR) after the financial crash.

The companies servicing the loans have charged customers high standard variable rates ever since – for some, their loans have soared to 10pc following 14 successive Bank Rate rises.

This week, MPs renewed calls for the Government to compensate these borrowers – many of whom are receiving repossession orders. Some can’t even sell, because if they do they will fall into negative equity.

Martin Docherty-Hughes, the SNP MP for West Dunbartonshire, presented a 10- minute rule Bill in the Commons calling for those who have been overcharged interest to be reimbursed. The Bill is backed by a crossparty group of 10 MPs, which also includes Conservative MP Duncan Baker, Labour MP John McDonnell and Green Party MP Caroline Lucas.

Mr Docherty-Hughes said: “It’s a scandal that the Chancellor’s spring Budget has yet again ignored the plight of tens of thousands of families unfairly trapped on crippling mortgage rates.

“Hundreds of thousands of mortgage prisoners face losing their homes through no fault of their own. The Bill I’m introducing aims to finally end the unfair mortgage prisoner cycle and address the failures of successive UK governments.” In Mr Fleming’s case, his interest-only mortgage repayments nearly tripled after his mortgage was sold in 2015 – from £670 a month to as much as £1,760 some months. Life became centred around scraping enough money together to meet his monthly payments.

One Friday in the summer of 2019, he left his home with the sole purpose of ending his life. He had planned to drive his car – with himself in it – off the top of a cliff and into the freezing sea.

“I just wanted to put an end to it all. I thought, ‘ Best if I weren’t here.’ I just wanted to be free of the pain and the shame. We were trapped with whatever they wanted us to pay.”

In the end, Mr Fleming drove just short of the cliff-edge. The grandfather of two, now 68, decided to battle on.

But at least three suicides have been reported in relation to the mortgage prisoner scandal, according to surveys carried out by the charity UK Mortgage Prisoners Group. Many are still suffering. One woman said she was unable to have children for fear of the financial repercussions. Others with children have been forced to forgo family holidays for nearly 15 years. One man has fought 13 repossession attempts to date.

‘LOANS SOLD TO HIGHEST BIDDER’ The Government oversaw the sale of at least four big batches of mortgages after it assumed ownership of loans left behind by the collapse of Northern Rock and Bradford & Bingley. The goal was to repay £44bn of debt to the Treasury as soon as possible and “maximise value for the taxpayer”. The sales took place in October 2014, November 2015, April 2019 and February 2021. In February 2019, Lord Sharkey, a member of the House of Lords, warned the Government not to sell anymore loans to firms that wouldn’t let borrowers remortgage – saying it would just leave more people “trapped” on unaffordable rates. But what followed were more sales of mortgage prisoners to inactive firms worth £10bn.

Dominic Lindley, secretary at the allparty parliamentary group for mortgage prisoners, said: “I spoke to one active lender which said it could have offered these borrowers a much better deal. But because the packages being sold were too large, it made them hard to swallow unless you were a big lender. Active lenders also knew they wouldn’t be able to outbid the vulture funds [ zombie lenders]. The Government was just trying to maximise the sales process.” ‘ THEY TOOK MY HOUSE

AND £60K IN FEES’

After the sale of his mortgage to private equity firm Cerberus in 2015, Mr Fleming’s loan began to be serviced by its subsidiary Landmark.

His mortgage term ended in 2022. Landmark extended it for one more year, but when this ended there was still a £200,000 loan against his home in Bilton, a village in east Yorkshire.

Mr Fleming says if he had been moved to a capital repayment mortgage after this loan was sold, he would have paid £120,000 less in interest, cleared the debts and kept his home.

In June last year, his family home for 36 years was repossessed. “My children are utterly traumatised and still suffering from PTSD after that day,” he said.

Landmark went on to sell the home for £310,000, which was over £100,000 less than a valuation Mr Fleming had got on the house just three years earlier. The company then subtracted £60,000 in legal and bailiff fees, leaving Mr Fleming with just a £50,000 profit.

He and his family are now renting a bungalow, and all he and his wife have to rely on is the state pension.

A spokesman for Landmark said proceeds from the sale “would have been significantly greater” had Mr Fleming “not raised a number of objections, which the courts determined to be without foundation, resulting in significant legal costs”. It added: “These situations are deeply unfortunate but very rare, as the overwhelming majority of customers in difficulty work with us to find mutually agreeable solutions.”

‘ I’M NOT A BAD DEBTOR’ Stockport- based borrower Debbie’s mortgage rate is currently over 9.5pc, with repayments jumping from £600 to £1,400 over the past year.

The 54-year-old, who asked for her surname not to be included, says she could save £700 a month by remortgaging because she is on a very low loan-to-value.

She stopped working last year for six months after the death of her mother, so decided to use the surplus facility she had to cover the excess – making payments of £800 each month, which were agreed with Landmark, rather than £1,300. But when this ran out, nobody at Landmark notified her. Her account fell into the red and her credit file was ruined.

She said: “It’s just so unfair. I’m not a bad debtor. I was trying to deal with my mum’s death, my dad – who is now 91 and needs round-the-clock care – and my own mental health. I got no support from my lender.”

The company wrote down that she had missed seven repayments, but she said she only missed two. Landmark said it had informed Debbie of the impact the new payment arrangement could have on her credit file before she entered into it. She disputes this.

The father of three, below, considered suicide over his mortgage woes ‘I just wanted to be free of the pain and the shame’

‘CALLS FOR REDRESS GO UNANSWERED’

Gina Miller, who has campaigned for financial transparency, said the Government urgently needs to come up with a redress scheme for mortgage prisoners. She added: “They have been morally failed. We don’t want another inquiry. It’s got to be a redress scheme. The Treasury needs to act now. These people have been knocking on the FCA’s door for over a decade”

It has been a year since Money Saving Expert Martin Lewis’s recommendations, which included free comprehensive financial advice for all prisoners, interest-free equity loans to clear unsecured debt and interest-free Government equity loans based on the Help to Buy scheme.

A HM Treasury spokesman said it understands the difficulties faced by these borrowers and that the department was “carefully consider[ing] practical and proportionate solutions put forward” by campaigners.

The Stockport borrower, above, had her credit file ruined ‘I’m not a bad debtor. I was trying to deal with my mum’s death’

DEBBIE