The new service, completely free to those in debt, will focus specialist support for customers who are struggling to honour their mortgage payments due to unsecured debts.
Around 3 million fixed-rate and discounted mortgage deals end in 2008 and 2009, and borrowers will move into higher mortgage payments. Payplan says that due to the recession and other debt commitments, borrowers are not financially prepared for this rise, leading to increased mortgage arrears.
The firm says its clients in mortgage arrears owe on average £42,500 in unsecured debt, and often haven’t told their mortgage lender this.
The new service enables lenders to see the ‘whole picture’ of a customer’s indebtedness, and then works out the best course of action to reduce the chance of arrears reoccurring.
Phil Bushell, arrears manager at Payplan, says: “Against this back drop of rising arrears, the benefits of the scheme for lenders are clear: improve your clients’ finances, clear their arrears and enable them to make regular mortgage payments once again.
“Without an intermediary service like Payplan’s to manage the entirety of a customer’s debt, traditional solutions such as payment breaks and capitalisation of arrears only serve to delay an inevitable decline into further arrears.”