LiveMore has rallied for industry support for mortgage prisoners in response to a parliamentary report about the regulator failing consumers.
This week, an All Party Parliamentary Group (APPG) released a 358-page report criticising the Financial Conduct Authority (FCA) for its treatment of customers.
The report comprised testimonies from 175 people who had dealt with the regulator, including mortgage prisoners.
It concluded that consumers felt the regulator was “incompetent” and was reluctant to act against the interests of financial services firms as it was culturally aligned with them.
The FCA rejected the claims and said it had learned from past problems.
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Lenders must support mortgage prisoners
Leon Diamond, CEO of LiveMore, said the report was a “stern reminder” to the industry of how serious the issue was to mortgage prisoners.
He added: “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.”
Diamond said: “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.”
Diamond said the main problem for mortgage prisoners, particularly older ones, was that they did not meet lenders’ affordability criteria.
He added: “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.”
In 2019, the FCA amended affordability rules to make it easier for mortgage prisoners to switch onto a new rate.
Diamond said the over-50s had been “let down” by lenders and it was the sector’s responsibility to help.
He added: “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.”
