Home repossessions should be a last resort

Fri, 28 Oct 2011

Home repossessions should only be viewed as a last resort with regard to individuals who find themselves in deep mortgage arrears.

This is one of the findings of a Treasury select committee, which suggested the option is a route that must only be used when all other possible avenues are closed, the Financial Times Adviser reports.

The Arrears and Access to Finance Key Points report noted the Financial Services Authority (FSA) needs to stringently monitor the forbearance policies of all lenders, who are required to give an itemised breakdown of any extra costs covered by arrears charges.

It is hoped such a move will help to ensure these sums are not overly excessive, while the FSA and the Office of Fair Trading - a non-ministerial government department operating as the UK's consumer and competition authority since 1973 - could be required to review all the charges made by home loan providers in a bid to make sure the costs are appropriate.

The new measures could result in a decrease in repossession numbers across the UK and make mortgage arrears easier to manage for homeowners.

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