Mortgages  

More Northern Rock mortgage prisoners could join claim

More Northern Rock mortgage prisoners could join claim
Northern Rock bank collapsed following the financial crisis and was nationalised in 2008

The law firm representing Northern Rock mortgage prisoners has said many more people could join a claim for compensation against the firms that bought the collapsed bank’s mortgage portfolios.

As reported in FTAdviser's sister publication the Financial Times this morning (January 17) Harcus Parker has announced it is seeking compensation of at least £150mn on behalf of thousands of mortgage borrowers who believe they have been unfairly charged high standard variable rates following the collapse of Northern Rock.

More than 200,000 mortgage borrowers are believed to be affected, with Harcus Parker currently representing 5,750 borrowers who argue they were unfairly kept on interest rates above 5 per cent for more than a decade.

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This was despite the fact interest rates across the market were at an all time low in the wake of the financial crisis.

The law firm is set to take action against US private equity group Cerberus, which holds mortgages bought from Northern Rock through its Landmark brand, and against Topaz Finance Limited, which holds former Northern Rock mortgages through Heliodor Mortgages.

Matthew Patching, a senior associate at Harcus Parker, told the Financial Times the firm is preparing to sue if the claims cannot be settled.

Speaking to FTAdviser, Patching said there are many more people who were affected following the sale of Northern Rock’s mortgage book and who could potentially benefit from joining the claim if they believe they were also unfairly charged a high standard variable rate on their mortgage.

The law firm currently has action underway against TSB who also owns former-Northern Rock mortgages under its Whistletree brand. The court hearing for this action is set for March. 

Harcus Parker has set up a website - mortgageprisonersclaims.com - specifically for mortgage holders who believe they may be entitled to make a claim following the sale of the Northern Rock mortgage book.

Patching has encouraged anyone who thinks they may be impacted to reach out.

Rachel Neal, one of the lead campaigners behind UK Mortgage Prisoners was instrumental in instructing Harcus Parker to take action. 

Speaking to FTAdviser, Neal said the group has tried many other routes but was left with no other option than to take legal action.

Neal said there has been “absolutely no movement from the Financial Conduct Authority or the government to help affected borrowers”.

“We find it completely crucifying to our members and horrifically unfair. Many are in complete despair,” she said.

The group has been involved with Harcus Parker since 2019. 

The law firm are investigating claims on behalf of borrowers who hold or held mortgages with Northern Rock, Bradford and Bingley, UCB Home Loans, Engage Credit, Heliodor Mortgages, Landmark Mortgages, Mortgage Agency Services Number Five (MAS No. 5), Mortgage Express, Rosolite Mortgages, The Mortgage Business, UCB Home Loans, or Whistletree.

jane.matthews@ft.com