Mortgage Lenders Refuse to Negotiate Loan Terms

The latest report by the Sunday Times suggests that more evidence, proving that lenders are unwilling to help their redundant borrowers, is appearing. A large number of cases, where mortgage lenders refused to assist their long-standing clients, who have been made redundant, have already been reported. It should be noted, that the situation is in strong controversy with the statement of the FSA (Financial Services Authority) consumer panel, made last Thursday. The statement said that the Authority will take severe actions against companies that levying arrear charges without a proper reason. FSA regulations suggest that companies have to consider the individual circumstances of each and every borrower, but this does not seem to be happening. Moreover, the Authority is doing nothing to force lenders to assist struggling homeowners. One of the outstanding cases reported to the Sunday Times is that of Mr. Ian Sanders from Loughborough, who got redundant from his £60,000 position in law firm in May. The solicitor turned to his lender, HSBC, for help. As Mr. Sanders has been the bank’s client for more than 13 years and has never before defaulted on a payment, he believed he could easily negotiate a payment holiday or an interest-only repayment scheme for his £149,500 mortgage loan taken out in April 2007. However, the specialist mortgage advice centre at HSBC, to which Mr. Sanders was referred to, claimed that the bank can arrange neither a payment holiday nor an interest-only scheme for the solicitor as he might not find another job. In addition, the bank representatives told Mr. Sanders that repossession procedures will be launched in case he defaults on 2-3 payments. It is interesting to note that HSBC representatives still claim that the bank does switch its borrowers to sparing payment schemes and that all cases are being reviewed on an individual basis. However, they refuse to comment on individual cases.