Repossessions higher than official figures show say Shelter

Permalink: Repossessions higher than official figures show say Shelter
by Kay Murchie

According to housing charity, Shelter, repossessions could be 20% higher than official figures from the Council of Mortgage Lenders (CML) show, due to actions taken by ‘second charge‘ lenders.

Figures show that tens of thousands of people have taken out a second charge home loan on their property and are could face repossession if they default on their mortgage payments. The second charge market is worth over £11 billion.

The figures from CML do not include any actions taken by second charge lenders, say Shelter.

According to the CML, last year there were 27,100 repossessions. However, the housing charity said the figure could be nearer the 32,000 mark, once second-charge actions were taken into account.

The CML recently warned that repossessions would increase by 50% to 45,000 during 2008 but Shelter believes the increase could be much higher, predicting that an additional 9,000 borrowers will be repossessed due to second-charge lenders.

As a result of rising repossessions, the Financial Services Authority (FSA) is warning that mortgage firms should treat customers fairly and said a flexible approach was needed from lenders when recovering arrears.

Lesley Titcomb, FSA Director responsible for the Mortgage Sector, said many homeowners are struggling to pay their mortgage payments and it is crucial that they are treated fairly which means paying attention to their individual circumstances and repossession must be the last resort.