Lenders set to crack down on suspended possession orders
News Category: Industry News
Published: 21-Jul-2010
A housing market recovery may lead to an increase in the number of repossessions as lenders enforce suspended possession orders after previous leniency.
The warning comes from the Consumer Credit Counselling Service, a debt charity which offers mortgage arrears and repossessions counselling to anyone who is two or more months behind with their mortgage payments.
It says it is counselling a “large number” of clients with suspended repossession orders on their homes which lenders have chosen not to enforce despite clients failing to meet payments stipulated by courts.
The CCCS says more arrears can be expected in October when Support for Mortgage Interest payments for those who have lost their jobs are halved from 6.08% to 3.09%, to match the Bank of England’s average mortgage rate.
Delroy Corinaldi, CCCS’s director of external affairs, said: “There is no doubt that lenders have shown leniency towards debtors during the recession by not enforcing suspended possession orders. However, this leniency may have been partly determined by the markets.
“In addition, some lenders are increasingly showing reluctance in allowing struggling debtors to switch to interest-only mortgages as a short-term solution, giving people the necessary breathing space to find other more sustainable options.”
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