Mortgage News
BSA calls for industry co-operation over repossession strategy
The Building Societies Association (BSA) has published a report urging government, the industry and consumer groups to work together to help prevent home repossessions.
The report, A joined-up approach to helping mortgage borrowers, is designed to provoke discussion and sets out a number of recommendations on insurance, flexible tenure, lender forbearance and government schemes.
It is being launched to coincide with the political party conferences and the BSA will be debating this issue at fringe events jointly run with the Money Advice Trust.
The report recommends that the government should actively encourage the take-up of insurance, which would help pay a consumer’s mortgage if they become unable to do so, and look at whether its support for the mortgage interest scheme (SMI) could be extended to more consumers.
The trade body also said that while forbearance has worked well to prevent repossessions, the separate regulatory structures for first-charge, second-charge and unsecured lending is confusing for consumers and leads to varying requirements on forbearance.
It argued that these structures should be made consistent in order to provide clarity for both consumers and lenders.
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In addition, the report said that further investigation is needed into how homeowners with shared equity schemes could ‘staircase’ the amount of equity in their property up or down depending on their circumstances.
The BSA said that the government has an important role to play in preventing repossessions, but so do other parties such as lenders, insurers and advice agencies.
Paul Broadhead, BSA head of mortgage policy, said: “It’s clear that there is no silver bullet to eliminate repossessions. Instead we need a framework of solutions, which together can help as many mortgage borrowers as possible to remain in their homes.
“Consumers get into difficulty meeting their mortgage repayments for a variety of reasons, in many cases it is caused by an unexpected life event, such as job loss or relationship breakdown.
“It’s easy when reading statistics on repossessions to lose sight of the fact that each one represents a family who have lost their home. This is why the BSA is urging the industry, the government, and other stakeholders to work together to help those at risk.”