SPECIAL FEATURE: The repossession factor
Over the past two years my firm has helped over 1000 people stay in their homes when faced with repossession proceedings. Along the way we have dealt with virtually every UK lender and I’m afraid to say that in recent months we have seen nothing but a deterioration in the way they treat their customers.Two key areas are particularly problematic – forbearance and legal conflicts of interest.
Firm on forbearance
Much has been said and written about forbearance in recent years, often referring to lenders using it at all costs to avoid instigating repossessions. There is now an increasing trend for arrears repayment proposals to be rejected by lenders. The lenders aren’t wrong every time and in some cases we see the borrower has negative equity, is out of work, and is completely unable to demonstrate affordability. But many are now simply not prepared to consider all the remedies available under the Pre Action Protocol.
Rejecting borrower proposals who have historic arrears but can demonstrate a current ability to pay is, in my opinion, a systematic abuse of process. It is the non-lending firms who are the worst culprits, which is ironic as a number are state owned. Evicting these kinds of borrowers will put even more pressure on social housing and will cost the government and local authorities a significant amount of money.
Conflicted in the courtroom
As most readers will be aware, a solicitor can’t take on a case if they are conflicted due to being involved with another party in a case. We are seeing increasing instances of conflict whereby a solicitor isn’t able to act for a borrower due to some form of legal or commercial conflict in respect of the lender.
The issue of conflict and the way in which lenders distribute their cases means that panel solicitors increasingly cannot afford to turn lender business away. This effectively blocks them from taking a defendant’s case, and consequently there is very rarely representation available in court for a borrower.
This means that the lenders control the specialist advocacy network, because the biggest firms and most experienced advocates in repossession law all work for them. We think that this is an unfair monopoly as they have a stranglehold on the court system.
Borrowers left battered and bruised
The “double whammy” effect of reduced forbearance and controlling the network of advocates gives lenders far too much power and it is no surprise to learn that over 50% of people do not attend their repossession hearing because they are terrified and feel the lender and court process are against them.
This situation can only lead to an increase in repossessions, a continuing deterioration of public trust, and bad feeling towards the lenders.
We hear a lot of talk about financial institutions putting the customer at the heart of everything they do, but when will they stop talking the talk and start walking the walk?