Should Law Change To Reduce Homeowner Loan Repossessions?
Following the effects of the credit crunch and the recession, a large number of individuals in the UK have been struggling to keep up with the repayments on their home owner loan and as a result of this, the number of properties being repossessed due to high loan arrears and defaults has risen dramatically.
The Council of Mortgage Lenders (CML) predicted at the start of the year that there would be somewhere in the region of 75,000 properties repossessed over the course of this year, but the positive news has been that it has reduced this projection, first to 65,000 in June and just recently down to just 48,000 properties.
Despite this optimism, there were still 11,700 home owner loan repossessions during the three months to the end of September this year and the Liberal Democrats have called for a change in the laws which govern home owner loans and mortgages in order to reduce the number of people losing their homes.
Sarah Teather of the Lib Dems said “Ministers have spent billions of pounds to save the banking system but their efforts to help those facing repossession have been shamefully inadequate. We need to urgently reform mortgage law so that courts have the power to ensure that repossession is only ever a last resort.”
Michael Coogan of the CML disagreed, he said “Low interest rates and lenders’ forbearance policies have helped to cushion many households facing financial problems. Although the economy is not out of the woods yet, we no longer expect a dramatic rise in properties being taken into possession unless interest rates rise form the low levels that most commentators now expect to persist for some time. Borrowers should take heart from the latest findings, as they reinforce the fact that lenders really do want to keep people in their homes and are doing so.”
