The Debt Advisory Line’s Craig Gedey has stated that current feedback from the housing market proved that “the hard work and close co-operation of borrowers, lenders and debt advice providers is paying off“. Although, according to a recent report on the situation in the third quarter of 2011 by the Council of Mortgage Lenders, there was still a sizable number of households with arrears on their mortgages, the number of repossessions had clearly stabilised. There had been no significant changes on these numbers over the past three months, neither in the overall repossession statistics – which were up by a mere 1% compared to the previous quarter – nor in the number of households in arrears – which fell by two percentage points. The CML has foremost credited this stability to forbearance by lenders, but there is more to the story, as general director Paul Smee was quick to point out.
“The fall in the number of mortgages in arrears, and the stable picture on repossessions, are testament not only to the beneficial effects of low interest rates, but also to effective arrears management, and good communication between lenders, borrowers and debt counselling organisations“, Smee commented. An increasing number of borrowers across the country are taking action by looking for professional help early on in a bid of finding a solution that could satisfy both sides. Smee accordingly emphasised the seminal importance of arriving at compromises: “Against the backdrop of widespread financial uncertainty sweeping both the UK and the wider European economies, it is impossible to be sanguine about the future influences that households may face. But lenders will do their utmost to help borrowers keep their homes, whatever pressures emerge. Anyone worried about their mortgage should seek early advice and talk to their lender: these figures firmly show that repossession does not have to be an inevitable consequence of mortgage arrears.”
His assessment was mirrored by Gedey, who stressed that too many people were blaming the government or harsh financial conditions for debt problems and repossessions: “Really, it is the communication between borrowers and lenders which is crucial. It is here that the decision between a potentially devastating repossession and a conciliatory long-term plan is made. Rather than demonising lenders, we should be thankful for their co-operation and for allowing as many borrowers to stay in their homes as possible. From our own hands-on experience, it is always beneficial to contact creditors in case of serious debt issues to work out something together. The expertise and experience of debt management agencies in securing the success of these negotiations is vital in this regard. “
With 27,300 loans still reported as having arrears of more than 10% of the outstanding balance, there was every reason not to rest on one’s laurels and to keep pursuing this collaborative approach: “The more everyone can see that we’re all in the same boat, the better“, Gedey said.