consider changing their lending criteria in order to held about 47,000 borrowers in the European nation whose debts had been sold to inactive lenders and are therefore barred from benefiting from better mortgage deals. According to the regulator, despite the fact that banks are able to offer better home loans to borrowers than the ones they are currently paying, there has been low demand from customers and even lower supply from lenders.
“We hope that more mortgage prisoners will be able to switch their mortgage,” the FCA said. “We encourage lenders to consider if they can amend their lending criteria to lend to mortgage prisoners who are close to their risk appetite.”
The review, which analysed the position of borrowers whose home loans were sold to new lenders after the financial crisis, found that a significant number of them had borrowed from banks like Bradford & Bingley and Northern Rock, which failed during the crisis. They were moved to new lenders after the crash but were not offered new deals or given the opportunity to move to lower rates.
“Everyone is extremely on edge about the rate rise,” says Rachel Neale of the campaign group UK Mortgage Prisoners. “These people are already struggling. Some are using food banks, some are facing repossession.”
