Lenders have recently been slated by a senior judge, who has accused them of using bullying tactics in order to get borrowers to repay their mortgage arrears with greater speed. The President of the Association of District judges, Michael Tennant has stated that too many lenders try and get borrowers to repay mortgage arrears within an unreasonable and often unachievable length of time by using bully and scare tactics. He added that borrowers can actually secure a far greater length of time within which to pay their arrears by going to court.
According to the Council of Mortgage Lenders this pressure often results in borrowers agreeing to make payments that they cannot afford on their arrears, with other simply overestimating the amount that they will be able to pay or how quickly they will be able to clear their arrears. Lenders are able to apply for a court hearing if the mortgage account falls over two months into arrears, and at the hearing the judge will determine a reasonable and affordable amount for the borrower to repay in order to clear the arrears.
Judge Michael Tennant stated that lenders should not be bullying borrowers into making payments that they cannot afford, and borrowers should not let themselves be bullied. He said: “It’s important for debtors to realise that in negotiating with lenders there is no reason for them to feel bullied into agreeing an unrealistic repayment schedule. Very often debtors will reach agreements with the lender which are hopelessly unrealistic just in order to make the problem go away.”
The Citizen’s Advice Bureau stated: “We see people who sort of cycle down remortgage after remortgage. If lenders are in a position to help people see what they can afford and they don’t do that, it drives people to much worse options.”
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