Mortgages....

Halk seeing as you are inside (I believe) one of the lenders can you give some broad ideas on a couple of points, don't need exact numbers just your inside view

- Whats the typical number of months people can go behind on mortgage payments before institutions are getting to the point of reposession now? I had heard 3 months was generally a good guide.
- If your regularly paying something but less than you should are lenders being more tolerant. Eg say someone should be paying £500pcm but are in fact paying £300pcm, so slowly falling further and further behind. Whats the lenders views in this case, will they be more tolerant or will they just revert back to their accepted number of months to be behind before starting action
 
That's outside what I usually deal with Rob, so this is to the best of my knowledge.

- Repossession usually starts at 3 months, but it's a long road.
- Lenders will look to agree something, repossessing a property is the very last step and lenders will try to make some kind of arrangement to help rather than take the property on and sell it.

I know someone who works independently for many mortgage providers and essentially he knocks on people's doors and offers to sit down with them and work out a plan to try and get things back in order. He's paid reasonably well by mortgage providers because they just don't want to repossess.

When a human looks at the decision to repossess or not and they see some willingness to pay then they're less likely to pull the plug.

I've also heard that many lenders have a lot of bad mortgage debt on their books and government pressure is not to turn the properties over, and there's also a bit of self preservation, because if lots of repossession happen there will be another price correction.

As to the specific example.. normally the lender would look to draw a line after an agreement was made to find a solution, so if they were paying 300 per month rather than 500 per month, the lender may decide to come to an agreement where 300 per month was ok, and add the arrears on to the loan. At that point the slate would be clean. When any lender looks at arrears, it's looked at how long the mortgage has been in arrears before action starts more than how much it's in arrears. I have no idea at all if then going against the agreement would put them back at the start of the process, or if it'd be picked up from where it left off - it'd be different for every lender too.

If it's someone you know Rob, then please get them to CAB or similar and work out how much is affordable, and then approach the lender with this information and see if it is possible to continue with the mortgage at that amount. Paying what you can afford and not trying to reach an agreement isn't a good way.

I don't deal with mortgages in arrears, ever, so all the information above is picked up on the side of what I normally deal with.
 
The Halk said:
That's outside what I usually deal with Rob, so this is to the best of my knowledge.

- Repossession usually starts at 3 months, but it's a long road.
- Lenders will look to agree something, repossessing a property is the very last step and lenders will try to make some kind of arrangement to help rather than take the property on and sell it.

I know someone who works independently for many mortgage providers and essentially he knocks on people's doors and offers to sit down with them and work out a plan to try and get things back in order. He's paid reasonably well by mortgage providers because they just don't want to repossess.

When a human looks at the decision to repossess or not and they see some willingness to pay then they're less likely to pull the plug.

I've also heard that many lenders have a lot of bad mortgage debt on their books and government pressure is not to turn the properties over, and there's also a bit of self preservation, because if lots of repossession happen there will be another price correction.

As to the specific example.. normally the lender would look to draw a line after an agreement was made to find a solution, so if they were paying 300 per month rather than 500 per month, the lender may decide to come to an agreement where 300 per month was ok, and add the arrears on to the loan. At that point the slate would be clean. When any lender looks at arrears, it's looked at how long the mortgage has been in arrears before action starts more than how much it's in arrears. I have no idea at all if then going against the agreement would put them back at the start of the process, or if it'd be picked up from where it left off - it'd be different for every lender too.

If it's someone you know Rob, then please get them to CAB or similar and work out how much is affordable, and then approach the lender with this information and see if it is possible to continue with the mortgage at that amount. Paying what you can afford and not trying to reach an agreement isn't a good way.

I don't deal with mortgages in arrears, ever, so all the information above is picked up on the side of what I normally deal with.
Click to expand...

No reason other than curiosity, was trying to see if it was as I had heard, obviously lenders vary. Thanks :)

Yes the government applied a LOT of pressure to not repossess like happened in the 90s. Typical Labour kick the can down the road approach to everything. A larger faster correction may have placed us more like the US (where it was allowed to happen) and seen us move to a recovery a lot faster. We are just stuck now in a domestic economy with still overpriced assets (make up your own mind how much) with the eurozone meltdown on our doorstep.
 
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