Many Lenders Still Not Delivering on Repossessions

Thu, 20 May 2010

Many mortgage lenders have not totally signed up to government initiatives which aim to prevent individuals having their homes repossessed, so say debt advice organisations.

Given that mainstream mortgage lenders have improved the way in which they treat struggling homeowners in the last few months, those in the subprime and "second charge" lending sectors are not upto scratch.

Several of the governmental schemes have proved unsuccessful and the government's mortgage rescue scheme had only helped a handful of people.

The government did also provide guidance to ensure that lenders take all reasonable steps to avoid repossession .

Shelter, Citizens Advice, AdviceUK and the Money Advice Trust charity surveyed their experts find out whether this guidance has been put into practice.

They found that half the advisers had considered an improvement in the procedures of mainstream mortgage lenders after the new guidance which was introduced in November 2009.

However, just 20 per cent of advisers had reported that the arrears collection practices of subprime and second charge lenders had improved.

These results highlight that higher-profile lenders are doing a lot more to help struggling homeowners than their subprime and second charge counterparts.

Of course, it would be ideal should all lenders be doing all that is possible to ensure that people do not lose their homes. This equates to sharing the customer response and working out the best way in which the customer can stay in the property .

Repossessions number approximately 800 a week, with citizens advice bureaux in England and Wales experiencing a 49% increase in new inquiries regarding mortgage and secured loan arrears in 2009.

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