RBS announces six-month repossession gap

A six-month grace period for customers who fall behind on their mortgage payments has been announced by RBS, owners of NatWest.

The bank''s chief executive said that it was going to be "even more helpful" in saving homeowners from repossession – after the government asked for a three-month waiting period to be observed by banks looking to repossess a property.

Many mortgage holders have been coming under increasing financial pressure, thanks to the credit crunch and subsequent economic downturn – and lenders predict that repossessions will rise by 70 per cent over 2007 this year.

Writing in the Financial Times, Stephen Hester commented: "The government has called on banks to wait at least three months before moving to repossess the house of a customer who cannot make mortgage payments.

"Today, RBS Group is announcing that we can be even more helpful."
Commenting on the announcement to the BBC, Jonathan Charley at consultants EDS suggested that financial concerns at RBS could have been a factor in its decision.

"At a time when house prices are falling, banks don''t really want to do repossessions because all they end up with is no money coming in from the mortgage loan and they end up with a stock of houses, which they probably can''t sell," he said.

"So, for most banks they''d rather avoid having repossessions and actually just get some form of money coming in from people."