MP PLEDGES TO ACT AFTER BIG ISSUE SOUTH WEST DEBT INVESTIGATION
EXCLUSIVE by Matthew Baker
A Labour MP has promised to table a Commons debate on the mortgage lenders who target breadline Britain after an investigation by The Big Issue South West. A leaked document shown to a court currently considering 150 loans made by the finance firm Ocwen, reveals that loan brokers did not tell vulnerable borrowers that they were not offering independent advice and stood to make hundreds of pounds in commission. The borrowers were then locked into high-interest loans with huge financial penalties for defaulting. If the court case is successful then 50,000 Ocwen loans could become void. The company could lose £1 billion. The court reconvenes in June. Ocwen is a ‘sub prime lender’, dealing with people who have bad credit rating and are considered high risk. The campaign against the firm has been led by Carol Riley who fought off another mortgage company when it tried to repossess her home. Her support group, the National Association of Mortgage Victims, has had 1,500 people trapped in a spiral of debt contact it for help. "There are thousands of people who are absolutely panic-stricken and desperate because of these loan companies," she said. MP Barry Gardiner called for an investigation into Ocwen in a House of Commons adjournment debate last October. He said he has yet to receive a written answer from the Consumer Minister Melanie Johnson about his concerns but as a result of The Big Issue South West’s investigation will demand another debate. "We’re dealing with some of the most financially vulnerable people in our community who often have very insecure work and are struggling to make ends meet," he said. "Naturally when lenders are incurring a greater risk they’ll want to see a greater return. But it must be commensurable. "Some brokers push people into contracts that are going to cause a lot of damage. "It’s calculated and it’s deliberate," he added. Ocwen has refused to comment because the trial is still in progress but has pleaded in court that borrowers should be made to honour agreements they signed. National Association of Mortgage Victims: 01889 507394
Reproduced courtesy of the Big Issue.
6 May 2002
