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06 June 2008
Struggling homeowners were promised help yesterday when the Council of Mortgage Lenders (CML) wrote to the Chancellor of the Exchequer listing the measures mortgage lenders are taking to combat the repossessions crisis.
Mortgage lenders have commited to:
- stick to new guidelines the CML are preparing on dealing with mortgage arrears cases.
- provide plenty of information to homeowners who find themselves in a mortgage arrears situation, so they understand what’s happening and what to expect.
- take action before the situation reaches court proceedings, so only appropriate cases end up in court.
- inform homeowners in good time when they are moving out of initial deals and into higher monthly repayments, encouraging them to make contact if they don’t think they can afford the new rates.
The CML also asked the Chancellor Alistair Darling MP to outline how the Government plans to improve the safety net for people who can’t afford to pay their mortgage.
In response to the letter, Adam Sampson, chief executive of Shelter, said:
'The CML’s letter to the Chancellor today not only demonstrates the severity of Britain’s repossessions crisis, but also shows mortgage lenders recognise they have a responsibility to protect borrowers.
‘In particular, we welcome CML’s measures to standardise processes such as arrears management policies and to support the introduction of a court action protocol, which if implemented properly and quickly, should ensure people are treated fairly and avoid homeowners being needlessly repossessed.
‘However, while this is welcome news, to make a real difference to struggling homeowners, the Government must now play its part. Crucially it must provide an adequate state safety net for borrowers in difficulty and ensure the FSA regulates second charge lenders and sale and leaseback companies to protect the most vulnerable.’
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