According to a report in the Guardian, 93-year-old Clifford Taylor has seen his initial amount to repay grow by £99,000 to £116,000, a consequence of soaring house prices and how Sams were designed to work.
Sams were introduced to allow homeowners to unlock some of the money tied up in their property by borrowing 25 per cent of its value and agreeing to repay this amount, plus a proportion of the cost of the property when sold.
The newspaper reports that Mr Taylor’s bungalow, which was worth £68,000 when he took out his Sam, was sold for £200,000, leaving him with a £116,000 debt to Barclays due to the Sam tying him to repaying 75 per cent of the sale value to the bank.
Sandra McGee, Mr Clifford’s 55-year-old daughter, now looks after him after a stroke paralysed him down his left side has said that her father needs the money for his care.
Barclays told the paper: “The Sams have been correctly sold. The Financial Ombudsman has confirmed that in previous cases. The situation is that no-one could have predicted house price escalation in the recent years.”
Recently Citizens Advice criticised the rising number of house repossessions noted by the Council of Mortgage Lenders, claiming that lenders are tending to go to court rather than exhaust other routes for those with debt management problems.