Secured Loan Repossessions Increase
There have been great concerns and many reports on the number of properties which are being repossessed due to arrears and defaults on homeowner loans and mortgages over recent months and the situation does not appear to be getting any easier for struggling homeowners.
But in addition to this, a new report from the Finance and Leasing Association (FLA) has shown that there has also been an increase in the number of people losing their homes through a build up of arrears on their secured loans, or second charge mortgages.
The FLA, whose members account for somewhere in the region of 85 per cent of the secured loan and second charge market, has reported that the second three months of this year has seen an increase in repossessions on secured loans of 1.7 per cent above the same period for last year.
During the first three months of this year, the number of repossession cases grew by around 7.1 per cent, but despite this the FLA have predicted that they expect to see arrears problems with secured loans fall by around 3.2 per cent overall for the full year, compared with last year. The FLA claim that this is to do with good practice guidelines which have been introduced for lenders specialising in secured loans, in order to provide help and assistance to those borrowers who are struggling with their loans.
Those lenders who offer secured loans or second charge mortgages to customers are forced to comply with regulation from the Consumer Credit Act and the Office of Fair Trading (OFT), as well as the guidelines for arrears handling which have been laid down by the FLA, who say that the figures show that the recent guidelines are clearly working, as secured loan companies are doing more to help those borrowers in financial difficulty.
