Government takes steps to help homeowners

The government has recently taken steps to try and help homeowners by changing court protocols in order to make it more difficult for lenders to take court action without taking other steps first in cases where homeowners have fallen behind with mortgage repayments.

It is hoped that this will help to reduce repossession levels, and lenders will be expected to follow guidelines and take a number of other steps before taking court action. The lenders will need to demonstrate that they have taken the necessary steps if the case does end up in the courts.

The government is also looking at placing sale and rent back schemes under FSA regulation in order to protect homeowners from unscrupulous firms that pay way below market value or break agreements with regards to renting back the property.

Treasury official Yvette Cooper said: “We need to make sure we help those who might be hardest hit in the tougher times ahead, ensuring repossession is the last resort not the first. We also want to make sure that vulnerable homeowners are protected from exploitation and dodgy deals.”

The Justice Minister stated: “The new Civil Justice Council protocol forms part of a wider package of measures which demonstrate this Government’s commitment to provide the best possible support to debtors and vulnerable borrowers. The protocol sets out all the steps that a lender should take before issuing mortgage possession proceedings. Lenders will be expected to consider ways of resolving problems outside the court system so that mortgage possession claims are only brought to court after all other suitable options have been exhausted.”

Margaret Beckett, the Housing Minister, added: “We must ensure that every avenue has been explored before lenders seek to repossess homes. These new measures will further protect the most vulnerable households in the current economic climate. We have expanded free legal representation in county courts for households at risk of repossession, we have provided more free debt advice and will continue to work closely with lenders through this difficult time. It is important that households who have concerns over their mortgage seek advice at the earliest opportunity, starting by speaking to their lender.”