Rising repossessions a result of FSA regulation?
Reeh contacted Mortgage Introducer with his concerns after recent Council of Mortgage Lender (CML) and Department for Constitutional Affairs (DPA) figures highlighted increasing repossession numbers.
He said: “There’s a lot of activity that simply isn’t happening in the industry any more. We estimate that more than a million outbound mortgage lead calls were made in the UK each week pre-regulation. Of course this has been banned by the FSA but how many consumers proactively review their financial commitments? If everybody did there would be nobody sitting on any bank’s SVR. Clearly the major banks lobbied hard to have outbound calling banned; certainly this was a direct approach but these figures prove there are large numbers of consumers out there in need of help.”
The CML’s Repossession Risk Review figures reported arrears of more than six months increased by nearly 21 per cent in the second half of 2005 and arrears of more than 12 months grew 23 per cent in the same period. DCA figures found fourth quarter repossessions for 2005 were up by 50 per cent from those in quarter four 2004.
Michael Coogan, director-general at the CML, said: “Now would be a good time for borrowers to review their financial commitments. Cutting unnecessary spending, ensuring you have a suitable mortgage deal and taking out suitable insurance such as mortgage payment protection could make the difference between coping and falling into trouble.”
Tammy Richardson, man-aging director, UK & Ireland of Genworth Financial, commented: “Although the figures are positioned as alarming, both borrowers and lenders shouldn’t overreact. Many lenders learnt valuable lessons from the last downturn and the mortgage industry has since begun to adopt a number of ways to ensure the same situation that had fuelled the downturn ten years ago is not repeated.”