Lenders don't do enough to prevent repossession
Published On 3 April 2008
Mortgage lenders do not make enough of an effort to prevent their customers' homes from being repossessed.That is according to the Repossessions Advice Centre (RAC), which has asserted that banks and building societies should let customers who are struggling with their repayments switch to an interest-only loan to avoid repossession.
David Warnes, director of the RAC, said that the level of repossession was lower in 2007 because house prices were going up and customers were able to remortgage their property with another lender.
However, he warned that remortgaging may not be an option for as many people now and that lenders should step in to help those who are facing repossession.
He explained: "I don't think [lenders] go anywhere near far enough. Clients have been repossessed when they're still on a re-payment mortgage, which means that if they had converted the mortgage to an interest-earning mortgage then they might have been able to afford it and there might not have been a reason to repossess it."
In February this year, the Ministry of Justice released a report which revealed that 35,662 mortgage possession claims were issued in the last three month of 2007.
