The Government has recently announced it is selling off 66,000 mortgages and unsecured loans originally held the failed bank Northern Rock worth almost £5 billion to the investment bank Citi.
Whilst this may seem a good deal for the British tax payer with the proceeds helping to reduce the National Debt, it could trap thousands of customers as “Mortgage Prisoner” as some customers will be trapped in their current mortgage deal and not be able to pass affordability checks to move to other lenders. Citi has confirmed it will not be offering any new mortgage deals to these customers.
There is some potential good news in that the FCA is looking at whether it could relax affordability checks for those looking for a cheaper mortgage, releasing them of their “mortgage prisoner” status however such relaxation policies will not help customers in arrears who have missed repayments.
If you had a mortgage or unsecured loan with Northern Rock and are impacted by the latest sale you do not need to take any immediate action and carry on with your current repayment schedule and you will be written to in due course with any changes.
If you believe that you are a “mortgage prisoner” get in touch with us today to see if we can help.