Northern Rock collapsed in 2008 Together mortgages were offered by Northern Rock from 1999 to customers who wished to take an unsecured loan of up to £30,000 alongside their mortgage, and repay the “top-up” loan at the same rate. More than 150,000 smaller borrowers were told in 2012 they were in line for £270m worth of compensation for blunders in the loan paperwork, even if they had not suffered losses as a result. However, those with top-up loans above £25,000 were excluded from the scheme. NRAM forms part of UK Asset Resolution, the taxpayer-owned body that controls the state-owned financial assets including shares in RBS and Lloyds. Any compensation would have been paid out of the public purse. Last year, NRAM brought a test case against an employee who held such a mortgage, to try and establish that it had no obligation to pay compensation to those with loans of more than £25,000. The High Court disagreed, and ruled in December that 41,000 borrowers should be paid an average of £6,300 each. NRAM lodged an appeal in early 2015. Follow the Telegraph on LinkedIn. Share this article with your network.
The Court of Appeal has reversed a decision that would have led to £258mn of compensation being paid to 43,000 borrowers with the former bank Northern Rock by the UK government. The case related to Northern Rock's "Together Mortgage", and questioned the wording in past loan documents.