Mutual Advice - BSA and Shelter's guide to mortgage arrears reveals that in a recent MORI survey, 91 per cent of those who have a mortgage claimed that if they had problems paying their mortgage they would contact their lender. However, worryingly the experience of building societies shows that in reality the majority of customers do not follow this course of action. Shelter and BSA are highlighting the importance of facing up to mortgage arrears straight away, as often it will make the process easier, and in the long run will help customers keep their home.
The free report includes the ten key steps 'On the path to keeping your home' and a flowchart of the five main stages of the mortgage arrears process. It aims to help consumers feel comfortable approaching building societies and Shelter if they are experiencing mortgage arrears by taking the mystery out of the process. Mutual Advice encourages those who are currently experiencing mortgage arrears or those who foresee problems to "act now, contact your building society or Shelter". The longer a problem goes untackled, the harder it is to sort out, so those in trouble should pick up the phone straightaway.
Despite a 53 per cent fall in mortgage arrears over the last five years, there are still nearly 110,000 homeowners experiencing difficulty in paying for their mortgage. Shelter and BSA stress that although this reduction in arrears is reassuring for homeowners there are still a considerable number of households in arrears. Last year Shelter helped over 1,300 people who had problems with mortgage arrears.
Welcoming the joint BSA/Shelter guide, Adrian Coles, Director General of the BSA said: "The BSA is very pleased to be launching Mutual Advice with Shelter. Building societies do not want to repossess people's homes, and will do everything they can to reschedule payments and help someone organise their finances. During that first call to their building society, it is important for the mortgage arrears process to be two-way, with the customer being totally honest about their financial situation. I hope this report goes some way to reassuring people that admitting there is a problem will not automatically result in the loss of their home."
Ben Jackson, Director of External Affairs at Shelter, said: "There is a worrying contradiction between what people think they will do and what they actually do when faced with mortgage arrears. I hope the information given in this guide encourages people to ask for help quickly and make that all important first step on the path to keeping their home."
"The dramatic fall in mortgage arrears and repossessions is enormously reassuring for home owners, but the 110,000 mortgages currently in arrears is likely to cause serious anxiety for those involved. Having difficulty paying for your home is a particularly stressful and traumatic experience - there is a real fear that it could ultimately lead to the devastating outcome of homelessness."
