Mortgage Arrears - A lenders Perspective

catherine66

This is very interesting, thankyou for sharing with us guys here, you are a mine field of information and we.... all ears!

midge61

Hi
Very interesting posts. I don't suppose you have info on some of the sub prime lenders for those of us who thought we were paying a mortgage lender but are actually paying a company that collects only.

It is very hard to get help and support for these mortgages.
Would be interested in your views.

feisty1

midge 61 Which company are you referring to & what help and support do u you require that yr not rcvg?

midge61

Hi

SPML, they have suddenly concocted unpaid dd's from 2 years ago! I have complained but they have still gone ahead and added them to the mortgage and started charging arrears management fees and interest despite me sending proof of payment and finding that they have been charging me failed dd fees even though they never called the dd!

My payments have been on time for the last year and I had hoped to re-mortgage to get away from them........can't now!

feisty1

You must have a mortgage statement from 2 years ago, did arrears appear on there? Have you ever been late in paying, no funds in bank and SPML had to reapply for mortgage payments? Or are you saying all the time u've been with SPML you have conducted yr mortgage account 100% satisfactorily (in the eyes of a lender)

midge61

yes I have statements and NO arrears. They say it only came to light end of Oct 08. I have had some late payments and all these are fully documented. The issue I have is some fees have been charged where there weren't late payments BUT they had not called the dd and payments were made asap by card so not my fault funds available but not called.
I have not paid by dd for the last year but have paid by standing order and all payments have been on time.

feisty1

If they are not co-operating with yr reqests then you must write a letter stating you're making a complaint and wish this to be investigated (post it whereby they have to sign for it) Their are procedures & time frames that they must adhere to, so keep track of everything as you may have to take yr case to the FSA

midge61

Have done. They say they will reply by 31st Dec but that has not stopped them adding arrears to the mort etc.

thanks though

feisty1

well if they're wrong they have to undo everything and even if they think they're right and u think they're not, once u have exhausted the internal complaints procedure you have 6 months to refer it to the fsa

enomad

Hi all, Apologies for the late posting of this which was due over the weekend but somehow i got dragged into xmas shopping etc.. As promised i will now answer the following questions as fully as i can & hopefully add some more "meat on the bone"...

do all lenders use asset companies? In addition to my last post, basically what is happening now is that many lenders are training their existing sales teams to become "field agents" / asset managers whatever you choose to call them! These agents then take the place of the asset companies in choosing which agent to use & how much the property is sold for. Now, here is a very important point. These "agents" are probably your best chance of keeping your property. Why? Because they are (ex) salespeople & still have a heart! The internal arrears teams are hardened by all the stories etc etc however these field agents are not. As a general rule of thumb they are also more intelligent/ common sense than most internal teams. Let me give you an example; I visited a lady who was in arrears with her mortgage. no job etc but still paid her £120 mortgage each month. Now, because she did not pay via direct debit we penalised her £50pm, then for each letter (max 2 per month) she was charged £25each. Then there was the admin charge of £25pm. i was sent to her to find out why she was not keeping up with her mortgage & within 10 mins i was walking out shaking my head in disbelief as to how this obvious error had not been picked up. so i basically capitalised the arrears, removed lettersa from system & told her to start paying by DD & problem solved.

The point being here is that had i not visited her she would probably be facing repossesion right now. If you are offered a visit by a company representative do not turn it down. These people are sent to help you & actually want to help you.
It is also importnant that you ask if the person coming actually works for that lender or is an outside company. This is a really important distinction because if they work for an outside company they are literally there to record what they see & hear. It is only company employees that want to help you.



how do lender's comply with "treating customers fairly" if they do not ensure they are made aware of every offer?
good old TCF. I think we can safely assume that with lenders back against the walls for survival, fluffy things like TCF get completly put on the back burner! Basically TCF is not a "one cap fits all" approach. Lender A can suggest that one thing is fair for them, & lender B can suggest they opposite is fair for them. both opposite but both completly satisfying FSA guidelines. So how do they get around people in arrears etc.. simple, just conduct a telephone questionaire of a random selection of arrear customers & voila! they have just demonstrated TCF which would satisfy the FSA.
As ewe speak the fsa is rapidly trying to put something into place regarding repossesions but after re reading my old executive summery, i could not find any reference to arrears clients at all. Work in progress!




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, This will depend on the lender, how cooperative you have been with them, have you tried to make some form of payment, are you staying in contact with them? Lenders will want to help people who want to help themselves. If you are in postion of your property being sold then it is still in your interest to be involved, BTL's especially!

If you are in arrears with a homeloan;
1.Make it clear to the lender that you want to resolve the situation.
2.Ensure you record time, dates & who spoken to of any telephone conversation. All lenders will now be recording these calls. Where possible back up the phone call with a letter sent recorded delivery asap.
3. Stick to one arrears advisor & stick to them like glue. They will know your case intimatly.
4. Do not fear or turn down a visit from a company representative. It is not emabarrasing & trust me, they will probably have already felt the credit crunch just as much as you!
5. Get the field agents number/ business card. These people will have access to the internal system outside of hours & their calls are not recorded so you are able to have many "off the record" conversations with them.
6. find out what the minimum payment that the company is expecting. This is very important as it will give you a good benchmark. This figure is not cast in stone!
7. your field agent will complete a financial assesment, not to different from one you would have completed with a mortgage broker. You can also find various other budget planners on websites like this this one or you can ask your lender for one. They all do the same job. what you are trying to establish is how much disposable income you have left to pay the mortgage.
Your lender will be paying very close attention to this figure.

Think about this- if a lender tries to reposses you & you can show the court, that you have met with the field agent, discussed what you can afford, made an offer of monthly payment based on this do you think they would let the repo go ahead? in my experience they would not because you have displayed a willingness to work with the lender throug hwhat should be a short term issue.


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 & refer to above

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.

Ok, a very good topic. A lot of i have covered in the previous questions but lets open up the proverbial can of worms here!
Yes it will feel unpleasant speaking to your lender about your arrears & yes most of them will not be interested in you, your case or your situation. They will also appear cold & moody sometimes. This is why i suggest that you find one nice one & stick to them! But why are they like this?

Redundancy is everywhere- this includes lenders. So if there are low/no mortgage approvals there is no requirement for a sales/ completions/ underwriting/ case management teams so when you go through a redundancy process a lender will need to maintain a balance of these core roles for when they do resume lending. so basically most lenders will now have an arrears team made up of people who actually don't want to be there!

Arrears officers are paid bonuses/ commission. yes,you read that correct, these teams are incentivised to keep as many account under the 3 month arrrears threshold as possible, hence why many people in arrears will get lots of phone calls towards the end of the month asking even for a minimal payment of £10! this then keeps it under 3 months & the figure doesn't get reported to the CML, which then makes the lender look good!
So why do they want to look good. Easy, when lending returns, investors will look for quality & if you have a low arrears book then thats good!

Check out what the minimum payment is before a lender will post a bad credit mark. This one should save your credit file from being shot to bits but do check this out first. Some lenders will not inform the credit agencies if you make as little as £10 per month payment. This is because technically, you have made a payment. Not what the lender wanted but to register as a missed payment you should have paid nothing. small potential loophole this one i know but well worth checking out. As an example, i was asked to visit a guy who had purchased 4 x new build flats in Feb 08 & had only paid £10 per flat per month until around Sept 08. Unfortunaly for him, they were BTL which meant we could instruct receivership of rent without the need for a court order. He had no bad debt registered against him & would be free to apply for other credit including mortgages!

So, hopefully some good advice there, as a general rule of thumb lenders will help those that want to be helped. & remember, arrears officers do not make decisions, only arrears supervisors & field managers.

Another thing before i forget, if money is tight then pay your mortgage first. Credit card companies etc will shout the loudest & threaten the most but that is because they know, if you go under, they won't get their money back. A lender will. It is better to have a CCJ than a reposession - at least you will still have your roof over you head.

Some other topics i can cover off later;

BTL Arrears - How this differs from "normal" repo
How solicitor fraud has cost lenders £m's
Self Cert Fraud - Lenders with fine toothcombs & time on their hands & why dodgy brokers should be worried!!

Best Wishes & Merry Xmas!