New Protection For Homeowners Facing Repossession
Due to the recent concerns over the increasing level of arrears and possession proceedings which have been brought against UK home owners who have been struggling to keep up with the repayments on their mortgage or homeowner loan, the Government has introduced new measures to help individuals remain in their homes and also maintain ownership, by making changes to the way court proceedings for repossession are dealt with and also proposing the regulation of sale and rent back schemes.
New protocols have been introduced for court hearings for repossession cases to help to protect struggling home owners. The onus will now be on the provider of the mortgage to demonstrate that they have done everything they possibly can to help the borrower avoid repossession, including discussions with the customer on alternative solutions to their problems, thus ensuring that repossession is only considered as an absolute last resort. Once a case does make it as far as the courtroom, the lender will have to produce documentary evidence to support its case that it has done all it can to save the customer from losing their home.
The other course of action being proposed is to introduce regulation by the Financial Services Authority (FSA) for those companies operating sale and rent back schemes, following the recent report from the Office of Fair Trading (OFT) on this sector, which highlighted the need for regulation and increased consumer awareness of a product which can cause “severe detriment” to home owners struggling with their loan repayments.
Other Government assistance is likely to be in the form of new guidance for local councils and home owners on housing benefit eligibility, increased levels of free legal assistance for those facing a repossession hearing over their homeowner loan, more free debt counselling and advice, along with literature produced in association with the National Homeless Advice Service entitled “worried about your mortgage, get advice now”, which will be available from local councils and Citizens Advice Bureau offices.
