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RAC: Lenders must do more to avoid repossessions
7 April 2008 11:30
Lenders could do more to help troubled borrowers keep their homes, the Repossessions Advice Centre (RAC) has claimed, but instead fail to offer them workable solutions.
Council of Mortgage Lenders data shows that repossessions rose by 21 per cent in 2007 to 27,100 and while this was 9.7 per cent lower than predicted, the Royal Institution of Chartered Surveyors has forecast that around 45,000 homes will be repossessed this year.
RAC director David Warnes explained that repossessions were fewer than expected last year because borrowers in arrears still had the option of remortgaging to another lender and recognised the efforts of Britain's courts in helping people to remain in their homes.
Yet he argued that lenders' efforts to help troubled homeowners to re-budget were insufficient, while reflecting on cases in which borrowers lost their homes when they could have instead been converted to a more affordable interest-gaining deal.
Mr Warnes also asserted that homeowners with equity in their property and who have kept to their arrangement with their lender should have their arrears simply added to their mortgage balance, rather than being moved to a costlier standard variable rate.
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