UK Mortgage Prisoners

Reflecting On A Week Of Change 2019

The week of change was a series of social media posts that the group shared on Twitter. We all made a concerted effort to share and like these key subjects. Over the next few weeks, we will revisit the points raised and look a little bit closer at the rationale behind each one.

UK Mortgage Prisoners hit day 1 with a clear objective.

It should not be permitted for existing mortgages to be sold onto vulture funds/vampire funds/inactive lenders. If this highly dubious practice continues it will only add to the already high number of UK Mortgage prisoners”.

What is a Vulture Fund?

Generally speaking, a vulture/vampire fund, is a private equity organisation that buys up books of existing loans. Many of the Northern Rock customers that were signed up to the “Together” mortgage were sold off to NRAM & subsequently Landmark. NRAM and Landmark are private equity funds, and neither have a lending licence. 

For those of us who have been affected by the ridiculous situations conjured up by these vulture funds, banning such sales is a logical starting point.

Why is being acquired by a vulture fund bad for the customer?

The main reasons are as follows:

  • There is often very little warning which does not allow a customer time to consider alternative arrangements.
  • In the case of both NRAM and Landmark, the communications ahead of the transfer implied that there was to be no change to the conditions of the mortgage and that in fact, it was a rebrand. This was simply not true.
  • The new arrangement is often with an organisation that has no lending license and no ability to renegotiate a deal at the end of the fixed term. Counter-intuitively, a vulture fund will stick rigidly to the rate increases the end of the contracted term. In many cases, this has meant mortgages becoming unaffordable and hugely uncompetitive against market rates.
  • Once trapped into your new deal, you are either unable to afford repayments or squeezed hard to meet them. This has a deeply negative effect on your financial well being and has led to physical or mental health issues.

Many of us find the morality of this position to be deeply flawed. It has to stop.

Please share if you agree. Follow #ukmortgageprisoners for other conversations relating to this subject and more!