Take action to reduce risk of repossession

EXPERTS have attacked new Government plans to cut repossessions as useless, and say hundreds of thousands of families risk losing their homes.

RISK Some homeowners are at risk of repossession RISK: Some homeowners are at risk of repossession

In his Pre-Budget report on Monday Chancellor Alistair Darling announced that banks would be forced to give homeowners more time when struggling to meet mortgage repayments.

A Daily Express crusade is calling on ministers to ensure that no-one is forced out of their home when they cannot honestly make ends meet.

Frances Walker at the Con- sumer Credit Counselling Service said: “Many high- street lenders already wait around three months to take action, so for many this Government intervention will offer no benefit.”

If you are worried about mortgage repayments, seek advice.

Walker said: “Talk to someone — the sooner the better. Our counsellors can go though all outgoings and help with budgeting.

“Homeowners need to prioritise their mortgage and cut back on other spending where necessary. We help many people get back on

track just with some small changes.”

Lenders can extend a loan term, change a mortgage, perhaps to an interest-only deal, or defer payment of interest. These measures can cut the monthly repayments.

They can also restructure a mortgage agreement and add arrears to a loan.

The CCCS’s Mortgage Arrears & Repossession unit advises about 150 people a week.

 

Melanie Bien, director of independent mortgage broker Savills Private Finance, said: “It is important not to wait until the end of the three-month grace period before telling your lender why you are in arrears.

“You must tell them long before that. Keeping your lender in the loop will help you find a solution.”

Income support can cover mortgage interest payments. From April, homeowners can claim the support 13 weeks after losing a job instead of the current 39 weeks.

This aid was extended by Darling to pay interest on mortgages of up to £200,000, up from £100,000.

Borrowers should contact their Jobcentre to apply for financial aid.

Borrowers in arrears who have failed to find a solution can expect their case to be passed to solicitors.

A court date with a district judge will be set.

Steve Wilcox from Citizens Advice said: “Courts’ powers are limited in terms of protecting borrowers, so it’s important to try to sort things without going to court. If it looks like you’ll be repossessed you can get help with legal advice from the CA and Community Legal Advice, where you may get legal aid.

“Many shy away from talking to their lender but it’s worth a try. Especially as lenders have been told by the Government to see repossession as a last  step.

“Get advice but steer clear of commercial debt-advice firms which get paid to sell debt solutions. You need an independent adviser such as a debt charity.”

Homeowners who feel a lender is not duly sympathetic are urged to go to the Financial Ombudsman to try to clear up unfair dealings before any court proceedings.

** Citizens Advice — call local offices or www.citizensadvice.org.uk; CCCS: 0800 138 1111, www.cccs.co.uk; Community Legal Advice: 0845 345 4345, www.communitylegaladvice.org.uk

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