The figures, which showed a 41% rise in repossessions, demonstrate that some lenders don’t have the depth of experience in managing arrears and repossessions, according to the company.
With the CML reporting households in arrears of three months or more up 20% since the end of last year at 155,600, it is not surprising that many lenders are feeling under pressure. However, managing arrears is not a question of finding the quickest way to repossession. Not only is it contrary to the now well established principles of Treating Customers Fairly but also it is often the worst outcome for the lender financially as it crystallizes the debt and they are often left with monies outstanding. Likewise a borrower, who may be in negative equity, may seek desperate measures to get something out of the property including selling fixtures and fittings or, worse, trashing the property out of sheer frustration.
Paul Walshe, head of lender services, Moore Blatch, said: “Repossession is the last resort and every possible alternative should be investigated first. Such a dramatic increase in repossessions suggests that some lenders are approaching the problem too rigidly and that staff who are inexperienced in handling an increasing arrears portfolio are seeing repossession as the only solution. Our advice would be to seek expert arrears handling support and as and when necessary look to employ lawyers who have no vested interest in taking possession of a property.”
