Barclays Offers SAMS Rescue Package
by Gill Montia
Story link: Barclays Offers SAMS Rescue Package
Barclays has launched new measures offering assistance to customers who took out Shared Appreciation Mortgages (SAMs) during 1998, and are now suffering hardship.
The controversial Shared Appreciation Mortgage, which is interest free, allowed homeowners to borrow approximately 25% of the value of their property. However, under the terms of the agreement, they had to pay back 75% of the home’s value if they sold the property. This left many unable to move, particularly in view of recent sharp increases in property prices.
Barclays is now replacing 2,500 SAM mortgages with an interest-free and payment-free loan, which offers borrowers the freedom to buy a more suitable, equal-sized property, or to downsize. The loan must be repaid only when the alternative property is sold or the customer dies.
Barclays has worked with SAFE, a group concerned with financial exploitation, to develop the rescue package, which also includes a one-off additional loan for SAM customers in hardship who do not want to move but need funds for home improvements or adaptations to meet health requirements.
For this group the SAM mortgage will continue to increase with any further increase in house prices. Barclays has pledged to maintain the rescue package until all SAM mortgages are redeemed.
There are approximately 8,000 other SAM holders with Bank of Scotland, which has not yet responded to the hardship suffered by some customers. However, a response to the move by Barclays is expected before very long.
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