Banks Face 'Unfair' Mortgage Legal Action
Breaking News
11:05am UK, Tuesday October 06, 2009
A group of more than 300 homeowners has won the right to sue Barclays and Bank of Scotland over what it claims were unfair mortgages.
The borrowers have been granted a Group Litigation Order against the banks over Shared Appreciation Mortgages (SAMs) taken out more than 10 years ago.
The schemes, only available from 1997 to 1998 before being withdrawn from the market, allowed borrowers to take out loans secured against their homes, at a zero or reduced fixed rate of interest.
However, on repayment of the loans, they had to pay back an additional charge of up to 75% of the increase in the value of the property during the lifetime of the loan.
Their repayments ended up rocketing because of the sharp rise in house prices in the decade to 2007.
BOS - now part of the part-nationalised Lloyds Banking Group - and Barclays tried to block the move, which allows the homeowners to sue on a group, rather than an individual basis.
More follows...
Breaking News
11:05am UK, Tuesday October 06, 2009
A group of more than 300 homeowners has won the right to sue Barclays and Bank of Scotland over what it claims were unfair mortgages.
The borrowers have been granted a Group Litigation Order against the banks over Shared Appreciation Mortgages (SAMs) taken out more than 10 years ago.
The schemes, only available from 1997 to 1998 before being withdrawn from the market, allowed borrowers to take out loans secured against their homes, at a zero or reduced fixed rate of interest.
However, on repayment of the loans, they had to pay back an additional charge of up to 75% of the increase in the value of the property during the lifetime of the loan.
Their repayments ended up rocketing because of the sharp rise in house prices in the decade to 2007.
BOS - now part of the part-nationalised Lloyds Banking Group - and Barclays tried to block the move, which allows the homeowners to sue on a group, rather than an individual basis.
More follows...
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