Darling commends efforts to ease borrower pain

Chancellor Alistair Darling is commending lender efforts to ease borrower pain as a result of the credit crisis, after a summit with lenders.

Darling insisted, however, that mortgage lenders should continue to take their responsibilities seriously.

Darling and Caroline Flint, minister of housing, met with Michael Coogan, deputy-general of the Council of Mortgage Lenders, and leading industry figures yesterday at 11 Downing Street.

They discussed ways of minimising the credit crunch’s impact on borrowers.

Lenders have committed to reviewing existing processes for dealing with borrowers having difficulties with repaying their mortgages.

They also say they will dedicate time and resources to forging stronger links with debt advisers and identifying buyers who are at risk of facing repossession.

Darling says: “The mortgage market is facing challenges as a result of the US sub-prime crisis.

“The government is taking coordinated action internationally on regulation, in the London markets through the action of the Bank of England, and with the CML and the Finance and Leasing Association, to ensure a fair and well-functioning UK mortgage market.”

He adds: “I welcome the arrangements that the industry has in place, and will continue to build upon, to address the concerns of borrowers in difficulty. I hope that lenders continue to take their responsibilities towards customers seriously.”

The CML says its members are committed to upholding the principles of Treating Customers Fairly and meeting voluntary arrangements, avoiding repossession wherever possible.

Coogan says: “The Bank of England’s actions should ease funding conditions for mortgage lenders over time to help to ensure the continued availability of a wide range of mortgages for potential borrowers at competitive prices.

‘We welcomed the chance to discuss the steps that the industry is taking to support borrowers in the market, and look forward to continuing to work closely with the government over the coming months, to ensure that as few borrowers as possible face the threat of repossession.”

He adds: “Early contact with the lender before a payment is missed should ensure the widest range of options is available so customers can help themselves to avoid payment shock.”