Mortgage repossession orders surge by 24%

| August 15, 2008 | 0 Comments
Mortgage repossession orders surge by 24%

Figures from the Ministry of Justice have revealed that the number of mortgage repossession orders made by courts in England and Wales in the second quarter of 2008, rose by 24% to 28,658, compared with the same period last year.

The figures are 4% higher than the first quarter of this year and are equal to the number of orders made in 1993 (at the back-end of the last UK recession).

Repossession orders come early in the process and do not necessarily mean somebody losing their home, it is when a court grants an order for the possession of a home.

The Ministry of Justice urges homeowners not to ignore the order and recommends talking to their mortgage lender to see if a repayment deal can be agreed.

The news comes just one week after the Council of Mortgage Lenders (CML) revealed that actual repossessions across the UK had soared 48% during the first 6 months of 2008.

However, according to housing charity, Shelter, repossessions could be 20% higher than official figures from the CML show, due to actions taken by ‘second charge‘ lenders.

Figures show that tens of thousands of people have taken out a second charge home loan on their property and are could face repossession if they default on their mortgage payments. The second charge market is worth over £11 billion.

The figures from CML do not include any actions taken by second charge lenders, say Shelter.

According to the CML, last year there were 27,100 repossessions. However, the housing charity said the figure could be nearer the 32,000 mark, once second-charge actions were taken into account.

The CML recently warned that repossessions would increase by 50% to 45,000 during 2008 but Shelter believes the increase could be much higher, predicting that an additional 9,000 borrowers will be repossessed due to second-charge lenders.

A spokesperson for the Citizens Advice Bureau also urges homeowners to talk to their lender and not to bury their head in the sand, as the majority of people could come to a ‘workable agreement‘ with their mortgage lender and ultimately, prevent them from losing their home.

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