Mortgage Arrears - A lenders Perspective

enomad

Hi all, i'm new to this forum so apologies if i'm posting in the wrong area but thought i would share some of my "wisdom" with anyone that is looking for some guidance on mortgage arrears.

I have recently been made redundant by a mortgage lender & can give you some indication as to what is occuring from the lenders perspective.

If you are in an arrears situation or are potentially facing this then i would not advise you to hand back your keys or bury your head in the sand, obvious i know, but here's why;

Lenders DO NOT want to repossess you for a number of reasons
1. It costs more to manage the account in repossesion than it does if you are making some contribution.
2. With many properties now in negative equity lenders will lose money once your property sells (if it sells!) - This is a situation lenders cannot afford to be in at this point in time!
3. All lenders have a "bad debt provision" per property. Even if you are up to date with your mortgage, your property will still have it. This is the part lenders are worried about because they can usually forecast how much bad debt provision they need to put aside. currently they cannot which is causing them major problems.
4. Bizarre twist! This one you really should know about! When a lender instructs a property to be sold it is given to an asset company to liase with the estate agent for its sale. Now, we all would believe that the lender & estate agent want to sell this property asap. Yes, but what about the asset company, the "middle man" if you like? Well they actually charge lenders per hour for dealing with that property, so, they are in no actual hurry to get that property sold. I have personally experienced visiting agents who have had valid offers on the table, that was refused by the asset company & we (the lender) did not even hear about the offer! Many of these offers would be accepted as they would be within the bad debt provision.

I have many more "insider" secrets that i can share with, one of which will actually shock you beyond belief! If you would like me to continue posting then please leave some favourable comments & i will update daily.

I'm now off to our farewell leaving party, ironic i know, however its free booze all night & a free hotel room!

Speak soon!

feisty1

Quote: I have many more "insider" secrets that i can share with, one of which will actually shock you beyond belief!

I presume your contract allows you to divulge all!

sarkin

As a broker this is not news to me, so give us something juicy

silvercar

Hi enomad and welcome to the forum.

It is very interesting to hear your views, I don't think we've had anyone posting from a lender's repo team before.

A couple of questions,

do all lenders use asset companies?

how do lender's comply with "treating customers fairly" if they do not ensure they are made aware of every offer?

if there is a bad debt provision, is there ever a chance a lender will accpet the borrower selling the home themselves when the sale price what completely clear the mortgage? We here tales of people being in arrears and not able to sell because they can't clear the mortgage, so have no option but to wait to be repossessed.

Do you think the latest government announcements will mean that lenders will allow arrears to build up and be capatilised?

One of the reasons people stick their head in the sand is they are unsure of the lender's reaction. There is a fear that asking the lender for help will flag themselves up as in trouble and hasten the likelihood of a quick repossession.

Good luck with the job hunt. Someone with experience of repo's should be in great demand!

enomad

Sorry , forgot to mention - This information is ideally intended for people outside of the industry, i am aware that some of this information may be common knowledge to industry workers ie brokers, bankers etc so apologies but you may pick up some things you didn't know...

enomad

Hi Silvercar & thanks for your kind comments! I can briefly answer these but will go into more detail over the weekend;

do all lenders use asset companies? to my knowledge, most do. There are also at least two major high st lenders that im aware of that will instruct the property to go into auction if the property has not sold within a set (very short) time. There are major developments going on behind the scenes which i will detail later.

how do lender's comply with "treating customers fairly" if they do not ensure they are made aware of every offer? They can't! I was a commitee member of the TCF board so can answer this in more detail later, but basically, TCF is different from lender to lender & lenders can pretty much make it up as they go along! Also the major focus for TCF originally was when there was widespread lending, even the FSA have had to have a major rethink on this - more on this later..

if there is a bad debt provision, is there ever a chance a lender will accpet the borrower selling the home themselves when the sale price what completely clear the mortgage? We here tales of people being in arrears and not able to sell because they can't clear the mortgage, so have no option but to wait to be repossessed. Yes & No, Depends on the circumstances, again i will answer more fully over the weekend but there are methods of keeping your house & not wait to be repossessed.

Do you think the latest government announcements will mean that lenders will allow arrears to build up and be capatilised? This has already been happening for the last 6 months

One of the reasons people stick their head in the sand is they are unsure of the lender's reaction. There is a fear that asking the lender for help will flag themselves up as in trouble and hasten the likelihood of a quick repossession.
Very, very good question! Again, i will answer this more fully over the weekend as this is the area that will make many peoples jaw drop! In a nutshell, you must inform your lender, however it does not hasten any repo, & there are a few tips & tricks that people should know, to work with the lender.

Apologies these are brief but i will respond in full over the weekend.

Best Wishes

ajaney

Hi enomad

I find your comments interesting & would like to hear more about your experiences/knowledge in this area.

Hope you enjoy the party!

caracal_77

enomad, you're a gem for this forum and people in repo situation.

Very interesting hearing this from the lender side of things.

Thanks for sharing. Waiting for your next posts...

RainMaker_2

Fascinating stuff enomad.

Q. Is it possible for the general public to approach these "asset companies" directly, or are they obliged to sell through EA / auctions ?

gettingsorted

Hi enomad
Thanks for sharing your wisdom with us, I am currently 1 month in arrears which is about to become 2 and have to be honest am really worried can you please share some more of your very gratefully received wisdom.
Thanks x:D

drrobert

This is fascinating and really useful information! Thanks for posting, keep it up, and best wishes the New Year and your own job seeking.