Citizen’s Advice and Mortgage Industry Lock Horns

Recently the Citizen’s Advice Bureau (CAB) has criticized the Mortgage lending industry for increasing the arrears problems for borrowers due to their arrears management processes. This was backed up by a string of case studies that the CAB had drawn up totalling over 1,200 people’s stories.

The report stated that mortgage lenders are too quick to seek court possession orders against borrowers and that they should negotiate with borrowers as this is a dangerous situation for them as many borrowers when backed into a corner are resorting to the upsurge of leaseback schemes that have resulted in borrowers becoming homeless due to this process.

Between repossession orders and the leaseback sharks circling them, borrowers seem set up for a fall and the CAB says that the Mortgage lenders are doing little to combat this result. Meanwhile the Council of Mortgage Lenders has dismissed the report claiming that it was too simplistic in its criticisms.

The CML pointed out that the types of people who reach out to Citizen’s advice are normally earning lower than the national average and are by definition, those who have not managed to reach a satisfactory arrears management plan with their lender.

With both parties making claims the blame for a lot of the problems that borrowers have has been placed upon brokers not acting properly, in some cases people with large mortgage repayments, as well as other debts from credit cards, are being recommended to re-mortgage where they’d be forced to pay even more on their repayments.

The CAB has called for a list of changes including; asking the FSA and fair-trading to make sure borrowers are treated fairly and not mis-sold mortgages, as well as getting the Ministry of Justice to ensure that repossession is a last chance effort not the norm for borrowers who are struggling to meet payments.

Whether these changes are brought to pass will remain to be seen but for now at least borrowers who are struggling have had their plight made public and hopefully action will be taken so that they’re not mis-sold mortgages and that they get adequate support



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