A RETIRED serviceman from near Yeovil is hopeful that a major new group court case for ‘mortgage prisoners’ will bring him much-needed financial compensation.
 
David Riley, 76, who is recovering from bowel cancer, found himself stuck as a mortgage prisoner in a ‘black hole’ of unaffordable payments. 

Mr Riley had bought a five-bedroom townhouse in Martock, near Yeovil, with a £200,000 mortgage from Northern Rock in 2006.
 
He began to struggle when, following the 2008 global financial crash, the Government took over Northern Rock Bank and sold the mortgages of an estimated 200,000 homeowners to inactive lenders, who are accused of exploiting customers by charging unfairly high interest rates. 

While most people had low interest rate payments on their home loans of below two per cent, so-called ‘mortgage prisoners’, like Mr Riley, were paying well over the market rate.

Reasons including stricter lending criteria meant these homeowners, including Mr Riley, could not switch to a better deal and became trapped with their lender, causing many of them financial misery.

Mr Riley's repayments rose from £850 a month to £1,200 in the months before he sold the house, and the former Royal Navy aircraft electrician spoke of the stress of coping with the costs after a bowel cancer diagnosis that required surgery six years ago.
 
He said: "It was really tough at times. Being in this mortgage black hole placed a strain on me at the time. I try to look on the positive side of things, but it wears you down.

"I had good days and bad days, but then I lost my dog and that was a setback because she was one of the reasons I was getting out and about and meeting people. You go into your shell then."

When Northern Rock Bank collapsed, Mr Riley's mortgage was eventually transferred by the Government to TSB Whistletree at the end of 2015, and he became trapped paying above the market rate for his mortgage.
 
Mr Riley is one of 2,500 TSB Whistletree mortgage holders being represented by law firm Harcus Parker during a four-day High Court trial this week.

Harcus Parker says these mortgage prisoners have been unfairly exploited since 2016 by being forced to pay an additional 2.29% compared to the bank’s standard variable mortgage rate.
 
If the no win, no fee group legal claim is successful, Harcus Parker expects the average compensation claim will be between £20,000 and £30,000. Mr Riley is calculated to receive about £27,000.
 
Mr Riley struggled to keep up with his mortgage repayments as lending costs soared and he found himself in negative equity of more than £3,000 when he finally sold the house earlier this year.

He now lives in a nearby one-bedroom rented flat and says he "got nothing" for the money he paid.

Mr Riley divorced in 2012 but kept the same mortgage, he said: “The cost got higher and higher and higher, and I could not really afford it by myself. Here and there I just kept falling short of paying it, and the debt got bigger and bigger.
 
"In the last few months I just didn’t have enough money as the interest kept going up.

"I could not really afford to do any painting or maintenance, and it was in quite a bad state when I sold it."

Speaking about the court case, Mr Riley said: "The money would make quite a lot of difference to me. It would make things more comfortable."
 
Matthew Patching, partner at Harcus Parker, said: "This trial represents the first significant step towards compensation for our clients, who have paid very high interest rates on mortgages for a significant period of time.

"It’s not just about the money; our clients feel very strongly that there should be recognition that they’ve suffered a terrible injustice.

"Anyone who, is or has been, a mortgage prisoner is still able to join our no win, no fee group legal claim."

The law firm has set up a dedicated website for those wishing to make a claim: harcusparker.co.uk/campaigns/mortgage-prisoner-litigation

Harcus Parker represents a total of 15,000 mortgage prisoners who had their loans sold to various lenders by the Government.