Barclays sold Shared Appreciation Mortgages (SAMs) for a short time in 1998 (we no longer offer equity release products such as these).
In return for nil repayments on their loan, customers agreed to repay on sale of their property the original sum borrowed, plus a percentage of the house price increase (equity) up to a maximum of 75%. If house prices had fallen customers would have paid back only the original sum borrowed.
The loan could not be transferred to another property, and as house prices have increased at an unprecedented rate, some of our SAM customers now find themselves in situations of substantial hardship, which is often exacerbated by the terms of the product.
Barclays is unable to vary the terms of the SAM as the product was sold to third party investors back in 1999. As such in June 2007 we took the decision to set up the Barclays Shared Appreciation Mortgage (SAM) Hardship Scheme ("the Scheme"), to assist these customers.
What is the Barclays Shared Appreciation Mortgage (SAM) Hardship Scheme?
The Scheme aims to help customers who are in a situation of substantial hardship, and as a result need either to move to a more suitable property or adapt their existing home to make it suitable to their needs, but are unable to do so due to their SAM.
Although there is no strict definition of 'substantial hardship' and each case is considered individually, eligible customers predominantly fall into the following broad groups:
Customers requiring to move to a more suitable property due to disability/illness/mobility/change of circumstances (the SAM is not portable)
Customers wishing to remain in their current property, but requiring adaptations to make it suitable for their needs (caused by disability/illness/mobility)
The Scheme does not cater for the following:
Non-SAM holders, e.g. beneficiaries of deceased SAM holders
Customers making a general complaint about the fairness of the product or its features (without indicating a resultant situation of hardship)
Customers alleging mis-selling (without indicating a resultant situation of hardship) – these complaints should be directed through the normal complaints channels
The Scheme offers a choice of one of two solutions for these customers:
For eligible customers wishing to move, assistance to purchase a new, more suitable property through provision of an Interest Free Assistance Loan (IFAL)
For eligible customers wishing to stay in their current property, the award of a SAM 'grant' to carry out specific required adaptations to the existing property
The Scheme does not offer:
Cash payouts and/or compensation (this includes releasing part or all of the remaining equity for personal use if applying for an IFAL)
A change in the terms of the SAM
If you would like to find out more about the Barclays shared Appreciation Mortgage (SAM) Hardship Scheme, please call one of our case managers on freephone 0800 023 2981.