Home repossessions in the UK are at a 12 year high. Reports from Wales suggest that the number of repossession orders going through the courts there are up by 39% this year. Further news has emerged that the recently privatised Northern Rock Bank is repossessing 50% more homes than the mortgage industry average. Ouch! We the taxpayers are now shareholders in the Northern Rock Bank. We are partly responsible for the actions of the Bank as they evict fellow taxpayers from their homes before repossessing their properties. Latest news today is that Gordon Brown the Prime Minister has asked the banks to be more lenient with borrowers that they want to repossess. This will be interesting to see how this works out?
So what are the circumstances that lead most families to having their homes repossessed?
In order to avoid repossession you need to talk to your mortgage lender as soon as you realise that you cannot afford your mortgage payments. The reason most people find themselves in these life changing circumstances is often due to the high level of credit card debts, loan debts and mortgages.
The public have been allowed to keep accumulating debts which have been poorly monitored and controlled by the lenders. Surely the lending institutes should have stricter affordability tests to see that their clients can afford the new debt along with their other existing financial commitments. (Please note the emphases is on “new debts, along with their other existing financial commitments” – makes sense doesn’t it)
This high level of borrowing often requires both partners to work full-time in order to maintain their monthly financial commitments. This high level of financial commitment by families does not allow for anything unexpected to happen like an unplanned pregnancy or an accident or a long term of sickness, unemployment or redundancy to occur. Families struggling to pay their existing debts before a crisis are now thrown into total melt-down; when one of the family income earners find themselves off work without pay for a long period of time caused by one of the above unforeseen situations occurring.
From here on the spiral of debt builds up and soon it becomes a torrent of missed credit card, loan and mortgage payments that needs to be brought up to date with your lenders. You now struggle to play catch-up on your outstanding debts and your normal monthly debt commitments. Soon you discover yourselves falling further and further behind each month. Now that nice lender who was willing to lend you as much money as you wanted starts calling you constantly throughout the day.
It’s the starts a campaign of harassment by your lender to retrieve the money you owe them. The lenders phone calls start to sound threatening and nasty to you with the lender making all sorts of demands and threats daily. Now stress, arguments and bickering between partners become a regular occurrence and the feelings of despair set in. Eventually people are so worn down by their debt problems that they sometimes see repossession as a way of getting rid of the debt problem. Be aware that your mortgage lender can and will hound you for all the costs they incur selling your home for the next 12 years. So your problems don’t end at your home being repossessed by your lender.
Debt is not a disease of the lower or middle classes, it has no boundaries. Just look around and you will see lots of expensive cars parked outside Aldi, Lidl’s and the Pound shops. Recently this was put into perspective for me when I was told about a private school where three parents were taking their children out at half term and not at the end of term. What problems are these parents facing if they are prepared to disrupt and pull their children out of a privileged education mid-term? I shudder to think!
What ever you do don’t stop paying your mortgage and don’t bury your head in the sand pit in the hope that your problem will go away. Contact a Debt Management Charity and ask for help advice and assistance. Your thoughts and comments are welcome. Just CLICK on the green coloured COMMENT bar and Leave your thoughts or experiences today!