Disastrous Consequences of Mortgage Arrears

Many people in the UK face the disaster of repossession, though the Government takes poor efforts of supporting the population. The released data shows us the following: the number of repossessions in the fourth quarter of 2007 was 6,900 compared to 11,100 seen in the third quarter of 2008 and 10,400 seen in the fourth quarter of 2008. All in all the number of unpaid mortgage bills three or more months in arrears grew from 1.10% in the fourth quarter of 2007 to 1.88% the fourth quarter of 2008.  The main reason of arrears is the absence of income, which comes as a result of unemployment, stuff reduction or business bankruptcy. As a solution, some lenders suggest that their borrowers consult the Citizens Advice or other online guides. Mutual communication and negotiation are considered a vital tool against increased arrears. Lloyds TSB provides on-line advice for those who are getting into arrears. Moreover, Northern Rock has commented that they have been seeing an increase in cases of voluntary abandonment of properties since the summer of 2008, though the data can not show us the statistics since no court order is issued during the process. To support homeowners, the Government has launched “The Homeowner Mortgage Support Scheme”. However this is not a universal panacea, since the borrower has to set off the loan with accumulated interest at a longer period of time. One thing is clear: the challenging economic situation should be solved in collaboration with three parties: lenders, borrowers, and the Government.