As a mortgage prisoner myself, (one who cannot remortgage to a cheaper one because of stringent new criteria brought in after the financial crisis of 2007/8, and the collapse of Northern Rock and therefore stuck on mortgage of 4.9%) I have been following the various campaigns seeking to support the hundreds of thousands of mortgage prisoners.
Amendment clause No 25 of the Finance Bill, to cap the standard variable rate payable by borrowers who can’t switch to a different lender was opposed by John Glen economic secretary to the treasury and City minister on 13 January, who stated “I’m afraid that these amendments risk a number of unintended consequences and would be disproportionate to support a small number of borrowers.”
My mortgage was with Northern Rock, and the high interest rate I am paying has caused great difficulty, with my being on benefits, the rate paid for mortgage interest by the DWP being significantly lower than what I am paying, and having faced three sets of repossession proceedings to date.
I thought I would look into how it came about that my mortgage is now with an inactive lender (in fact a company that never did lend). Heliodor Mortgages is a trading name of Topaz Finance, a company ultimately owned by Computershare Ltd, a company registered in Australia. In November 2019 a tranche of UKAR (UK Asset Resolution) NRAM (Northern Rock Asset Management) mortgages were sold to Heliodor Mortgages.
NRAM and UKAR are government owned companies, set up to deal with the “bad’ debts of lenders Northern Rock and Bradford & Bingley, the “good” debts going to Branson’s Virgin Money (the ex Chair of whom, David Clementi, is currently the Chair of the BBC).
Let’s look at Richard Banks. He is a career banker and was Chief Executive of the merged Bradford & Bingley and Northern Rock, at which time he was one of the highest paid government employees, on £815,000 per annum. In July 2010 Banks was appointed director of UKAR, and in June 2015 was appointed a director of NRAM. Banks therefore had responsibility for state owned mortgages held by these companies. Banks resigned from both companies in June 2016.
In October 2016 Banks joined Topaz Finance as a director. Therefore he was doubtless involved in the negotiations for the sale of government owned mortgage assets to Heliodor Mortgages (Topaz Finance) of which he had intimate inside knowledge. The mortgage book will have been sold for a considerable discount, possibly as little as 10/20% of the true value, so Topaz Finance will be raking in profits based on the original mortgage value at the high interest rates paid by mortgage prisoners. Something stinks. Clearly bankers have done well out of mortgage prisoners, but you have to wonder what John Glen’s incentive is to maintain the status quo, and not upset the bankers.