SAMS mortgage holders to have their day in court
People who took out shared appreciation mortgages (SAMS) in the 1990s are to have their day in court.
The mortgages were sold by Barclays and Bank of Scotland, usually at 0% interest, and were secured against the future equity growth in a property.
Loans were made for up to 25% of a property’s value and only have to be repaid if the borrower dies or the property is sold.
However, the banks typically receive up to 75% of the appreciation in value of the property, as well as repayment of the original loan.
With property price inflation rampant in the years after the loans were taken out, the money accrued by the banks has in some cases equated to 40% in interest on the original loan.
Many SAMS holders have been unable to move as a result and some have suffered hardship, spending latter years in unsuitable accommodation.
However, the High Court has now granted a Group Litigation Order against the banks and the 300 or so homeowners involved in the case will be benefiting from recent changes in the Consumer Credit Act.
These mean that UK Courts now have more freedom to rule on whether the relationship between a creditor and a debtor is “unfair” to the debtor, plus wider powers to vary the terms of the loan agreement.
Visited 2064 times, 1 so far today
Comments (0)
Trackback URL | Comments RSS Feed
There are no comments yet. Why not be the first to speak your mind.