Reducing home repossessions

Helping those who might be hardest hit in tougher times
Mortgage lenders will have to prove they have tried to help struggling homeowners avoid losing their property, under new rules brought in by the government on Wednesday 22 October 2008 aimed at reducing repossessions.

Under the new rules, lenders seeking a repossession court order will be expected to show that they have tried to find alternatives when borrowers get into trouble with their mortgage repayments, the Treasury said.

’We need to make sure we help those who might be hardest hit in the tougher times ahead, ensuring repossession is the last resort, not the first,’ said the Chief Secretary to the Treasury.

’We also want to make sure that vulnerable homeowners are protected from exploitation and dodgy deals.’

The government also wants the Financial Services Authority to regulate firms that buy property cheaply from those struggling to keep up with their mortgages and then rent it back.

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