Mortgage Double Billing Scandal
In 2014 it was publicly announced in a Belfast Court that Lloyds Banking Group had been unfairly double billing customers who fell behind on their mortgages. This includes Bank of Scotland plc, Birmingham Midshires, Cheltenham & Gloucester, Halifax plc, Lloyds, Intelligent Finance, and The Mortgage Business (TMB).
Basically, the Group had capitalised arrears, but the banks continued to treat such mortgages as in arrears and used that as the basis for bringing legal cases. This perception of borrower affordability was distorted. This resulted in already struggling borrowers being threatened with repossession on account of an "erroneous and fictional arrears balance".
In fact, the NI Attorney General Mr John Larkin QC has accused Halifax and Bank of Scotland of "criminal fraud" in relation to the bank's treatment of customers in arrears. He told the court that the matter has now been drawn to the attention of the police, the outcome of this remains to be seen.
GDP promote mediation and not litigation and share the view of the courts that repossession should always be a last resort and it is more beneficial for all parties to come to an amicable agreement in respect of mortgage debt.
The Financial Conduct Authority (FCA) has identified 750,000 customers are likely to be affected and has ordered the lenders to work out who is affected, and how much they are owed.
Many borrowers lost their homes as a result of this so the Courts placed an embargo preventing further repossession proceedings - this is still in force today. This is likely to be uplifted in the near future once a compensation scheme is agreed so this will affect more customers who have since went into arrears or whose mortgage terms have since ended.
2013 was a particularly problematic year for banks and for borrowers. The reality of the recession had been embedded and both parties were really starting to struggle financially. The effect is still being felt today.
The banks were finding it so tight as a result of the decline in Bank of England base rate that some lenders began hiking their rates on existing customers who were trapped in their Negative Equity Properties.
Unfortunately for them, other lenders had written clauses into mortgage contracts promising to retain a set margin with the base rate meaning they could not freely change their rates so some of these loans have proved costly for the bank and not the borrower. So the banks find themselves in costly contracts throughout the UK, so what do they do?
It appears from recent statements that I have reviewed, during the period 2013-2014, we have identified subsidiaries of Lloyds Banking Group decided to change the way in which they charged their customers.
If you have ever been in arrears, or brought to court by this banking group, please get in touch. Subject to your circumstances you may now be entitled to financial compensation due to their actions.
Without reviewing your documentation we cannot guarantee you have been affected but we encourage everyone in the UK who had a mortgage with Lloyds Banking Group during 2013-2014 to investigate this and if you would like some professional assistance, get in touch with us.
BELFAST 028 92 444 555.