Lenders taking tougher stand on arrears

forbearance

Revival Repossession Solutions has claimed that a progressively firmer stance towards forbearance from lenders is cause for “major concern”.

The firm, a not for profit community interest company that provides advice for borrowers facing repossession proceedings, says it is seeing an increasing trend for arrears repayment proposals being rejected by lenders, in particular those who are no longer actively lending and are now acting in an asset management / run-down capacity.

“We’ve helped over 1000 people stay in their homes over the last two years and have dealt with pretty much every lender in the country during that time,” said Luke Memory, chief executive of Revival. “I can say with certainty that lender attitudes towards forbearance for distressed borrowers have hardened in recent months.

“Many lenders are simply not prepared to consider all the remedies available under PAP (Pre Action Protocol). Rejecting proposals from borrowers who have historic arrears but can demonstrate a current ability to pay is, in our opinion, a systematic abuse of process on behalf of lenders and should not be allowed to happen. It is the non-lending lenders who are the worst culprits, which is ironic as a number of these are state owned.”

Whilst his firm focuses on helping borrowers avoid repossession, Memory understands that there are instances where repossession is inevitable. He feels the only sensible option is for the government or local authority to take action in this part of the market.

He said: “We do see cases where the borrower has negative equity, is out of work, and is completely unable to demonstrate affordability. I think that we are approaching a time when there will be new case law on these types of cases where it would be better for the government to step in and turn a mortgaged home into a council house. This is what the Mortgage Rescue Scheme was designed to do but didn’t.

“Otherwise the likely scenario is thousands of people will be made homeless and forced into social housing, which costs the government a significant amount of money.”

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