Newspaper Article

The key to surviving mortgage debt Repossession is not just about the loss of your home, says Jennie Hawthorne

Hawthorne, Jennie

2001

Overview

AN unpleasant feature of today's buoyant housing market is that more than 96,000 people start the year 2001 with three months' arrears on their mortgage repayments. A further 47,000 are six to 12 months behind and 22,000 more than a year in arrears. In 1999, against a background of rising property prices, some 30,000 people had their homes repossessed. The Citizens' Advice Bureau is the first port of call for many stricken homeowners. One such couple with four children bought, in 1990, a property valued at 40,000 with a mortgage of 32,000. Two years later the property was repossessed and sold at auction for 15,000. In 1999, the couple were contacted by the lender and told they owed 28,000, with accrued interest. Most mortgage difficulties, however, are not easy to solve. They arise as the consequence of divorce, redundancy, unemployment, illness or the death of the main earner, all of which can lead to a reduction in income or a change of credit rating. The Council of Mortgage Lenders produces a useful leaflet for borrowers. It emphasises that taking out a loan at a higher rate of interest to pay regular mortgage payments worsens the problem and advises borrowers not to abandon a property or send the keys to the lender without first obtaining the lender's agreement.

• Publisher: Evening Standard Limited
• Subject: Hawthorne, Jennie