New Law on Repossessions: Hope for homeowners

Mortgage lenders in Britain will have to abide by new laws according to the Prime Minister, under the new rules the lenders will have to prove that home repossession is only used as a last resort.

The new rules to be introduced are to stop lenders rushing in to repossess homes to allow them to get a better price for the property when homeowners are unable to meet their monthly mortgage payments.

As unemployment and mortgage rates continue to rise, repossession are expected to increase further, already this year it’s thought that repossession have risen 50 percent and about 45,000 homes have been repossessed.

Northern Rock came under fire recently being accused of being “inflexible” with borrower who fell into arrears and repossessing homes to fast according to debt charity Credit Action.

Under the new law, lenders will be pushed to allow borrowers to take repayment holidays of up to three months. Or they lenders are to be encouraged to change the monthly payment plan by either switching to interest only or extending the mortgage term.

Source: timesonline