Judge states lenders should stop bullying borrowers
December 26, 2007
A senior judge has recently stated that lenders should stop using bullying tactics on borrowers in order to get them to repay their mortgage arrears more quickly.
Judge Michael Tennant is the president of the Association of District Judges. According to Tennant some lenders use bullying tactics on borrowers that have fallen into arrears, and expect them to repay the arrears within an unreasonable amount of time such as within the year. However, borrowers that then go to court can actually be granted a far longer period within which to clear the mortgage arrears.
Lenders are able to apply for a court hearing once a borrower falls over two months behind with their mortgage repayments. According to the Council of Mortgage Lenders there are many cases where a borrower actually overestimates how much they can actually repay and how quickly they can pay, which leads to additional problems. Once the matter goes to court a judge is able to make a decision on how much the borrower can afford to pay and therefore determines a reasonable time within which they should clear the arrears.
Tennant stated that borrowers should never feel bullied into agreeing to make repayments that they cannot possibly afford due to pressure from the lender. He stated: “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.”
A Citizen’s Advice Bureau official agreed, stating: “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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