A lender for seniors has called for support to aid ‘mortgage prisoners’ who are trapped in high-cost home loans, calling for others in the industry to offer support.
LiveMore, the mortgage lender for people aged 50 to 90 plus, with CEO Leon Diamond saying it is ‘our responsibility to protect consumers from financial stress’.
The firm’s advocacy of mortgage prisoners follows the 358-page report released earlier this week by the All Party Parliamentary Group (APPG), which criticises the Financial Conduct Authority’s handling of issues affecting mortgage prisoners.
The report suggests that the issue is outstanding for months or years. One respondent raised a grievance that the Financial Services Authority had fined the mortgage provider for previously, but that their situation nevertheless is unresolved by the FCA, and that the regulator ‘cannot keep them informed’.
The report has demonstrated from accounts of those affected by high-cost home loans the impact of being mortgage prisoners included the threat of repossession, losing their home and knock on effects of extreme financial stress.
One respondent told the APPG: ‘I have paid out approx. £70K verses the average mortgage holder’, Another claimed that their mortgage lender is ‘fixated on possession’.
A respondent named Lisa King told the APPG her personal story. King wrote that her late husband had become ill with M.E. [Myalgic encephalomyelitis], was unable to work and made a suicide attempt over arrears, then later died unexpectedly.
She submits that the FCA had failed to provide oversight or guidance to the Financial Ombudsman service and that if the Bank, Lloyds, had placed Mr King on a lower rate, he would have avoided arrears of £51,415.03. As a widow she is still facing the threat of repossession of the family home.
One of the five respondents said that FCA staff were ‘polite and showed empathy’. The other four said there was nothing positive to say about the FCA.
All of the respondents said ‘no’ to the question of whether the FCA has helped them or anyone they know.
Diamond, CEO of LiveMore, commented on the issue, saying:
“As hard-hitting as the APPG report is, it is a stern reminder to the industry of how serious this issue is for thousands of mortgage prisoners across the UK.
“In accordance with our social bond principles to progress social sustainability, we consider it our responsibility to protect consumers from financial stress and support them in what we believe is their fundamental right to live in their own home – especially as they get older.
“It is incomprehensible that more than 200,000 mortgage prisoners in the UK remain in this extremely difficult position. The report refers to financial stress, threat of repossession and goes way beyond financial losses to include physical and emotional health issues and, most tragically, suicide.
“We are here to help the proportion of people in their 50s, 60s and even 90s plus who believe themselves to be mortgage prisoners because they believe that they simply can’t get a mortgage or remortgage after the age of 50 – and so are automatically transferred onto higher standard variable rates.
“The main problem for mortgage prisoners – especially if they’re older – is that they don’t meet lenders’ affordability criteria. It is fundamentally important that consumers understand that there are lenders out there who are willing to be more flexible and carry out a modified affordability assessment.
“For too long, the over-50s have been let down by lenders. Consumer Duty has very firmly shifted the onus of a ‘good outcome’ onto financial services providers. It is our responsibility to help out mortgage prisoners in any way we can. A large percentage of our customers are at term-end, many of whom considered themselves to be mortgage prisoners. We are committed to providing financial solutions that enable older borrowers to access the funding they need so they can achieve their life goals – or even just improve their standard of living.
“We are equally committed to helping brokers support borrowers who have reached the end of their mortgage term and are seemingly stuck on a high SVR. Brokers can use the LiveMore Mortgage Matcher®, our digital tool that works in conjunction with our affordability calculator, to identify suitable products for clients based on their individual circumstances.”
