British banks will act to support British homeowners who are struggling to afford their monthly mortgage payments, the British Bankers Association (BBA) has said.
The announcement is in response to a report from the Financial Services Authority, which has warned mortgage providers not to act too hastily in repossessing the homes of people who have fallen into arrears on their mortgage
The BBA said that in contrast to other mortgage providers, which have seen an increase in repossessions of more than 40 per cent, banks have only seen their repossession figures rise by a comparatively small 6.6 per cent in the same period.
"Home repossession is absolutely the last resort for banks" defended BBA chief executive Angela Knight. "Our high street lenders are actively helping more people stay in their homes in these difficult times.
"We recognise that, with rising food and fuel costs, people may be finding money more difficult to manage and we urge anyone who is worried about meeting monthly mortgage payments to get in touch with their lender as quickly as possible. The problem won't go away on it's own but banks are well placed to help customers plan their finances to keep the whole show on the road."
The Council of Mortgage Lenders has also responded to the FSA's report, saying in a statement that "The mortgage lending industry is making strenuous efforts to ensure that repossession is only taken as a last resort when other realistic alternatives cannot be found that balance the interests of the borrower and the lender."
The CML outlined some of the actions it is taking to improve conditions in the mortgage market for homeowners, such as more training for staff on arrears and possessions, increasing the dialogue between the consumer and government departments to provide a safety net for mortgage customers, and developing industry guidance on arrears management policy.
Additionally, the CML is encouraging mortgage lenders
to contact borrowers in good time when they are about to come to the end of introductory deals that will result in increased mortgage payments. They should provide sufficient information to customers on their arrears management process, and how they will be treated fairly by their mortgage provider, the CML said.
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