Lenders' strategies put focus on MPPI

14 June 2010

I have been perusing the online version of Lending Strategy and it makes interesting reading. The latest edition carries a round table debate that features some of the biggest names in mortgage lending, and the table talk centres around arrears and repossessions.

Quite rightly, the agreed position is that the number of individuals finding it difficult to make repayments or being repossessed would be much higher but for the low interest rate environment.

And while few borrowers have taken advantage of the government safety net the fact this exists has encouraged dialogue between lenders and those in arrears.

But a change in tone is signalled by an attack on the government’s policy of forbearance whereby lenders are encouraged to adopt a six-month moratorium before acting on arrears.

The consensus is that this policy only encourages overall debt to rise and places borrowers in a more difficult position, so it’s not treating customers fairly.

One attendee - Mark Dowling, head of risk and planning at Kent Reliance Building Society - reveals that his mutual is encouraging problem borrowers to sell up. I’m sorry but wasn’t the idea of the rescue strategy to keep people in their homes?

This move by lenders is further proof that when it comes to keeping the roof over their heads there’s only one way to give your clients peace of mind - mortgage payment protection insurance.

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