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Vital to halt wave of repossessions

The publication of the Financial Services Authority’s latest mortgage lending statistics make grim reading on a number of fronts, not least the dramatic rise in mortgage and secured accounts in arrears and the 68% increase in the number of repossessions since 2007.

It seems part of the reason for the difference between the 40,000 repossessions reported in 2008 by the Council of Mortgage Lenders and the FSA’s figures is that secured lenders are far more likely to repossess properties than mainstream first lenders, so account for a disproportionately large percentage of repossessions.

Mainstream lenders have mostly heeded the government’s call to make repossession a last resort but the same cannot be said for many secured or second charge lenders, which appear immune to the message that repossession should be avoided at all costs.

Most of these fringe lenders are not members of either the CML or Finance and Leasing Association, which have done an excellent job in making members aware of their responsibilities.

It is disappointing that some secured lenders are still requesting arrears be repaid over short time periods without any regard to debtors’ means and instigating repossession for low arrears.

The government, FSA and responsible lenders should put pressure on this minority to take a more enlightened approach. If this cannot be achieved quickly, then legislative changes must be made as a matter of urgency to protect consumers.

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