Mis-sold Mortgage Claims > Mortgage News
Mortgage lenders urged to commit to sensible lending to avoid arrears
Tue, 15 Mar 2011
An analysis by Shelter has revealed that 17,000 homeowners could have avoided repossession if the Financial Services Authority (FSA) had "enforced" the proposals contained in the mortgage market review (MMR) over the last 5 years. Shelter has urged the lending sector to commit to sensible lending practices to avoid further suffering to vulnerable homeowners.

Parts of the MMR were used by Shelter in its analysis to highlight such issues as affordability and high loan to value lending (LTV) stating that "huge sums of money were lent that could never be paid back," referring to income multiples of up to 7 times annual salary. This it said, had led to borrowers paying more than 20 million pounds in arrears fees.

Shelter’s Chief Executive Campbell Robb commented: "This research shows just how much the mortgage market has failed to protect people. Every day our advice services help struggling homeowners pick up the pieces after being irresponsibly lent money they had no hope of paying back in the first place.

"Reckless lending over the last few years, which saw some lenders giving out loans of more than 100 per cent of the value of the property and up to seven times people’s salaries, helped to fuel the rise in arrears and repossessions, not to mention an unsustainable house price bubble."

Campbell Robb continued: "With tough times ahead it is vital the Government and lenders make a genuine commitment to sensible lending which will prevent any more needless repossessions in the future."
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