Deferment plan could lead to a bonkers situation

The Royal Bank of Scotland\'s announcement that it is delaying repossession orders by six months is akin to putting a plaster on a wound and ignoring the source of infection.

As arrears management specialists our experience shows that by the time there are problems with mortgage repayments, 98% of customers will have accumulated horrendous debts elsewhere, notably on credit cards or loans.

Delaying lenders chasing debts will exacerbate the problem as the same rules won’t apply to other credit providers. As a result we are faced with the ridiculous prospect of customers being harassed to clear unsecured debts. This will have a knock-on effect on secured loan repayments, making repossessions more likely.

The government should put the same restrictions on all lenders and stipulate that unsecured loans cannot be chased while customers are in mortgage arrears.

Julien Holmes

Managing director

Crown Mortgage Management

By email