Mortgages Uncovered

Both HBOS and Barclays bank are now facing the prospect of expensive court action which has been taken by thousands of older homeowners who are said to be financial hard up after taking out a shared appreciation mortgage product in late 1990.

The go ahead was given to solicitors for them to proceed with suing the banks on the behalf of 8,000 homeowners who still held the mortgage deals. The court actions is set to cost the baks hundreds of millions.

Those mortgage products that were sold between 1997- 1998 allowed elderly borrowers the time to release their cash from their property’s equity whilst deferring their loan or interest payments until they sold their property. The mortgage deal included a clause that borrowers must typically re-pay the bank up to 75% of any future rise in their properties value.

Hilary Messer at RWP Solicitors said “Many homeowners who took out these deals are now unable to sell their properties as they will not have enough left to buy a replacement home.”

The solicitors claim that the mortgage products were “unfair” and the marketing information that was made available at the time was “misleading”.

Legal action is being taken on the grounds of “extortionate credit bargains” named in the Consumer Credit Act and solicitors are expected to press the banks to either lower or cap their portion of any property value rises.

Barclays, sold 2,000 of these mortgage products, and said it was “comfortable that it did everything to make sure that customers understood the nature of the product”. But there was one thing that none of us could have predicted – the unprecedented increase in house prices,” said Barclays.

More mortgage information:
Cleaning Products here!!!