Government home reposession move
Updated on 13 November 2009
The Government has warned sub-prime lenders that it is turning the spotlight on to them to ensure they only repossess people's homes as a last resort.
Housing minister John Healey said he was determined to see "tougher standards" on the treatment that all borrowers received from lenders when they got into repayment difficulties.
Speaking at the Council of Mortgage Lenders' (CML) annual conference, he said: "Most mainstream lenders - and most of your CML members - are balancing their own interests with those of their customers fairly.
"Others are not. Specialist lenders accounted for two-thirds of repossession orders in the last quarter. That's why we're turning the spotlight more fiercely on the sub-prime sector, and why we're determined to see clearer, tougher standards on the treatment that all borrowers can expect from their lender."
He said these standards would be set out in new Financial Services Authority regulations and would be backed by stronger enforcement action.
Last month, the FSA fined specialist lender GMAC £2.8 million and told it to repay more than £8 million to customers after it was found to have levied "excessive and unfair charges" on people who were in arrears or whose homes were being repossessed.
Mr Healey said: "Next year, people will be entitled to minimum standards of tolerance and understanding from lenders if they miss mortgage payments and they won't face unfair charges when they try to make repayments. These tougher rules will mean that lenders will have to look at every other option before looking to repossess."
His speech comes the day after figures from the CML showed that 11,700 people had their homes repossessed during the third quarter, only slightly up on the previous three months.
The CML also slashed its forecast for total repossessions for 2009 by a third to 48,000, due to a combination of low interest rates, Government schemes and lender forbearance helping people struggling with their mortgages to stay in their homes.
Mr Healey also called on lenders to make a pledge to customers to do more to help them get a mortgage and avoid having their home repossessed, both now and as the market improves and interest rates rise again.
These news feeds are provided by an independent third party and Channel 4 is not responsible or liable to you for the same.
