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Repossessions on the RiseThere are more homeowners who must face repossession of their home because they are falling behind on their repayments, according to the Ministry of Justice. There have been a number of orders approved by the courts of England and Wales regarding the repossessions. In fact this number has risen 17 percent since the beginning of 2008. The numbers show that there were 27,530 orders and that is up from 23,438 in 2007. The credit crunch is to blame for the more expensive payments the residents are having to make because there are less mortgages available to refinance to. There is a process to the repossessions that one must deal with before it can actually take place. First there must be a claim made in which the homeowner is notified of action on behalf of the bank. This first process is also increasing in numbers. It seems there have been 38,000 claims since the beginning of the year where there were only 33,000 in 2007 for the same time frame. This is an increase of 16%. To add weight to the increase it was also found the numbers are up 7 percent from the last quarter of 2007. At the claims stage of repossession you may find that the orders don’t progress any further. Most of the time you have the claims stage so the banks can let you know what they are willing to do if you don’t take action. The good thing is that more of these property orders don’t actually go through the entire process of repossession in which the bank ends up owning the home. As the borrower, a person is allowed to present the court with a case for not proceeding with the claim or the borrower can make an arrangement with the lender. The Ministry of Justice shows that the increase in repossession orders is in Wales. In Wales they have increased to 26% in the first three months of the year when you compare it to last year. There was a 23% rise in the North West, a 22% increase in the midlands, and 9% in the South East. The south west showed an increase of 11% and North East 1%. The numbers are showing that lenders are proceeding to the courts a little faster than they did in the past, but most of those court orders are not going to end in repossession. The number of actual repossessions in the UK is normally published twice a year by the Council of Mortgage Lenders. The real numbers will not be published until August 2008, for the first half of 2008. The council is predicting that 45,000 repossessions will occur in that time period, compared to the 27,000 of last year. The council’s research shows there have been 11.8 million outstanding mortgages in the UK to date from the beginning of the credit crunch. Some individuals, like the housing charity shelter, are actually placing the blame on the banks and building societies. The housing charity shelter believes the lenders are not doing enough to help keep individuals in their houses after the 100% mortgage has been removed from the market. The lenders need to share the responsibility as they are part of why the credit crunch began. The lenders are restricting the mortgages and therefore there is no help for those who don’t have savings. Part of the issue is that these individuals have mortgages that they can’t afford and barely could before the issues started. Another area that has a direct affect on the residents being able to afford the house payments is the household bills. Energy, petrol, and the cost of food has risen. This means more and more are finding it difficult for regular expenses let alone their mortgage. The credit has also been cut with the credit card companies and lenders, which makes a tight situation worse. There is a need for help and the government is trying to find a plan that may help the homeowners who are currently struggling. The government is moving to offer more free legal advice to those who are in risk for repossession. They will also have debt advice analysts to help out. The housing minister spoke a few days ago about their plans. They know that they are dealing with a different situation than in the past. In this case the employment rates are high and there are lower interest rates. However, that isn’t going to help those in need. The government needed to help out a little sooner than they are. In fact the housing minister asked that the government step in with greater debt advice when the problem first started, but it still hasn’t stopped the process. The cheaper mortgages that were still on the market are soon to be gone in place of more expensive mortgages. Back To Financial News May 2008 Are air miles credit cards right for you? |
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