Mortgage lenders new scheme to curb repossession trend
September 21, 2009 by admin · Leave a Comment
Summary
The UK Government have put pressure on mortgage lenders to minimise the levels of repossessions and debt management plans due to payment defaults. This article looks at how the lenders are replying.
As they brace themselves for a rise in defaults, mortgage lenders have published plans to reduce the number of familys who have their homes repossessed. The Council of Mortgage Lenders (CML) said that while mortgage arrears and repossessions were expected to remain depressed, the UK’s poor economic outlook may cause more homeowners finding themselves in difficulties.
The CML’s initiative aims to ensure that familys who might not be able to keep up their mortgage repayments will only lose their home after all other options have failed. Mortgage lenders are already required by the Financial Services Authority (FSA) to have policies for arrears administration which aim to avert repossessions, except where there is no alternative. But there is no standard policy, and repossession policies differ between suppliers.
In a brief to Alistair Darling the Chancellor, the The Council of Mortgage Lender’s said its members had signed up to four measures to help keep repossessions minimal.
Lenders have agreed to analyse their current arrears and debt administration plans and refine them to bring them in parallel with new industry guidelines that have been relased by the CML’s. Borrowers who fall behind with repayments will also be provided with information explaining their lenders’ arrears administration plan, so that they can be clear on what to anticipate and how they will be treated.
Lenders will also adopt what is called the “pre-action protocol” which lays out the distinct points the lender must proceed through before pursuing an arrears case to court inorder to ensure court action is a last resort.
Finally, building societies and banks also have to be enterprising in assisting people to plan for possible high mortgage repayments when their present deal terminates. The Council wants lenders to talk with borrowers towards the end of their discounted deal or fixed rate early and persuade them to get in touch with the lender if they suspect they may have difficulty meeting the higher repayments.
The Director General at the The Council of Mortgage Lenders said: ‘We continue to anticipate that the level of mortgage debt and possessions will remain low, as originally forecasted. We continue to work closely with Government Ministers we look forward to a clear statement of the Government’s own position on a safety net for borrowers. With the economy worsening and an incomplete safety net for mortgage borrowers, the The Council of Mortgage Lenders cannot be complacent about the outlook and the challenges facing lenders, borrowers and public policy makers alike.’
Sickness And Debt Go Hand In Hand
September 16, 2009 by admin · Leave a Comment
Debt from sickness is one of the most commonplace reasons for people seeking debt advice.
As in people are unfit to earn or are dependant on social security, cash shortages can magnify debt issues in multiple ways. Strain caused by financial issues is a primary contributing factor to health issues.
The sort of help topics people are asking enquiring about includes: Free Debt Management Schemes , Protected Trust Deeds, Individual Voluntary Arrangements (IVA’s), bankruptcy advice, administration orders, general money advice and Bankruptcy advice, Protected Trust Deeds, Individual Voluntary Arrangements (IVA’s), administration orders, general money management and budgeting, Free Debt Management Schemes
Debt consultants usually spend more time with people burdened with debt from ill health because they appreciate the particularly difficult times they are experiencing. There aim is to free clients from the strain of debt issues.
The reasons for financial issues during illness are many and varied. The most common situations that lead to finance problems for those burdened by ill health are listed below:-
• The rate at which their income has dropped.
• When you are ill people tend to neglect finance issues.
• It can be more difficult to sort out financial problems with clients whose health is deteriorating.
• Some clients get into money difficulties because they have more costs related to their ill health.
• Respite care can be costly
• Debts can be accumulated due to the extra expense of transport for appointments.
• Repaying debts can dramatically reduce the households available funds and the reduction in income due to poor health, makes the circumstances even worse.
• The illness will mean that carers have to be hired.
• The situation can be made all the worse if the income earner’s job is manual. It makes returning to work slower.
•Similarly, problems related to mental health may force people to be off work for particularly long periods.
If you have to acquire a new employer even more difficulties arise. Although there are ridged employment laws in the British Isles, some people with ill health often develop debt issues because they’re unable work normal hours. For those with chronic term health difficulties, dependency on benifits will make their financial issues far more difficult to resolve. The problem is that many people suffering from ill health do not qualify for any benifits.
So what can be done? If you’ve already gotten behind on your bills, your lender will usually suggest methods to pay off your arrears gradually, together with your normal payments. And if you’re unable to pay these additional, you may be able to add them to your loan or delay them for a time. It will generally depend on your credit history. So pay as much as feasible monthly. Keep up regular payments even if you have to stagger them as this demonstrates that you are committed then your creditors are more likely to treat you understandingly and you could maybe minimise the arrears charges as well.
Where To Go For Debt Advice?
September 10, 2009 by admin · Leave a Comment
Summary
Are your debts worrying you? There is help for people attempting to balance their credit cards, loans and mortgage repayments. Don’t worry! It’s confidential, they will have heard it all before.
Where do you go for help with your debt problems? Millions and millions of people are running into problems with debt in the present financial recession. Citizen’s Advice (CA) has seen a unprecedented rise in people asking for their help in correlation with managing their mortgage repayments and other credit problems.
An additional source of free advice when it comes to debt, the Consumer Credit Counselling Service (CCCS) is reporting about 1,499 telephone calls each day, with Debt Advisory Centre saying their calls are up at least 66.66 per cent.
If you have debt concerns, you’re not by yourself. Read on to find out how much help is available.
For head to head contact, The Citizen’s Advice (CAB) has a wide number, well over four thousand, of Citizens Advice Offices spread all around the United Kingdom. Their staff work on unpaid basis, with many of the bureau’s having people who focus on debt.
If you ask them for help, what they will do, first of all, is to ask you to make out a list of the people you owe money to, what income you have and how much money you need to cover home costs. Armed with these figures, you will then be given an appointment to see an adviser. They will discuss everything with you, to see whether there may be a way that your income can be improved.
Whereas you may think you’ve covered everything, it is possible that there are benefits you are not receiving or you may have been supplied with an incorrect tax code and are subsequently paying too much tax.
You will then look together at the figures for outgoings to dind out if there might be any savings made. The Advisers will explain how to prioritize your debts. The main ones will be those concerned with maintaining a roof over your families head,for example rent or mortgage repayments, together with your heating bills,light and power and of course the council tax. Debts like loans, credit cards and store cards which may not be secured on your home come last on the list.
Your adviser will send you ’info pack’ containing letters for you to dispatch to the companies you owe money to.
Together with your advisor, you will assess your disposable income and create a repayment scheme to be negotiated with the companies on your priority list – Landlord, local authority, utility companies and mortgage company
Residual money after these essential costs and the expense will then be spread amongst the non-priority group. The Citizens Advice Bureau will always work with you to ask for the will assist you in asking for the associated charges and interest to be temporarily stopped , however this is not always successful.If the court becomes involved, as long as the offer is deem fair the courts often rule in favour of the defendants .
If there is any risk of repossession or court proceedings to recover debt, the Citizens Advice Offices will be extremely helpful.