Repossession should be a “last resort”
The number of homeowners who are facing mortgage arrears and repossession is on the rise, and the Financial Services Authority (FSA) are urging mortgage lenders to be fairer to their cash-strapped customers so that repossession is only a “last resort”.
The FSA accuse many specialist lenders of ignoring the personal circumstances of an individual, with many lenders turning to the courts far too quickly. 9,152 homes were repossessed in the first three months of this year, up from 6,471 over the same period last year.
Many lenders fell foul of adding extra charges and penalties to customers who are facing high levels of debt and struggle to meet their mortgage payment. Figures released show that more than 300,000 people are dealing with mortgage arrears, doubling last years figures. This rise is being blamed on the credit crunch, as soaring living costs are outstripping the average income.
Lesley Titcomb, FSA director for mortgages, said “More people are struggling to meet their mortgage payments and it is vital that firms treat them fairly. This means paying attention to their individual circumstances and not repossessing their homes when there may be an alternative solution. Repossession has to be the last resort.”