CML denies playing down repossession situation
Figures from the Department of Constitutional Affairs (DCA) revealed mortgage repossession orders in England and Wales in the third quarter of 2005 were up 66 per cent on 2004 to 19,687. They also showed the number of homeowners taken to court over mortgage debt rose to 29,991 – a 55 per cent increase.
The CML said the DCA figures are higher than the actual number of repossessions, giving the first half of last year – when there were 54,344 actions entered, 32,366 orders made but only 4,640 actual repossessions – as an example. But suggestions have been made that it is downplaying the situation.
Sue Anderson, head of external affairs at the CML, said: “We’re certainly not trying to play it down. By any objective measure current repossessions are very low by historical standards. But when people see figures presented in terms of a large percentage increase, they can become scared, forgetting a large increase on a small number is itself still a small number.
“ It’s important to ensure people understand the current context of rising repossessions still means low numbers in absolute terms compared to the 75,540 peak in 1991.”
Anderson explained a number of reasons why DCA figures would be higher. She said: “Lenders sometimes use court action as a way of creating the disciplined payment structure necessary to get a household in arrears back on track. Lenders will also happily abandon possession proceedings up to the last minute if satisfactory payment arrangements can be reached.”
“ They will sometimes return to court for a new order even if they already have a previous order where time has elapsed between the granting of the original order and the current problems,” she added.