CML provides uniform response to borrowers in arrears

The Council of Mortgage Lenders (CML) has written to the Chancellor of the Exchequer, Alistair Darling, outlining the ways in which lenders are acting to minimise the financial problems of borrowers, particularly those coming off low-rate deals.

The Council expects the number of mortgage arrears cases and repossessions to remain low during 2008 and points out that all lenders already have arrears management policies.

However, each takes a different approach and CML members have therefore committed themselves to four specific measures, in a move to create uniformity.

They will analyse their existing arrears management policies and implement any changes identified as a result of the industry guidance that the CML is preparing and provide information for consumers on their own arrears management process to help borrowers understand what to expect.

In addition CML members will support the principle of a pre-action protocol for mortgage cases for use before court proceedings, providing an additional assurance that only appropriate cases go to court.

Finally, mortgage lenders will inform borrowers in good time when they are coming out of initial deals onto higher rates and encourage them to make contact if a financial problem is likely to arise.

The letter also mentions that the CML is looking forward to hearing the Government’s views on the potential reform of the state safety net for borrowers who suffer a severe change in their financial circumstances.

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