Northern Rock twice as likely to repossess

| October 17, 2008 | 0 Comments
Northern Rock twice as likely to repossess

Credit Action is claiming that Northern Rock’s level of repossessions is twice that of its rivals.

The debt charity is calling on the Treasury to intervene and insist that the nationalised lender responds more sympathetically to borrowers who fall behind with their mortgage repayments.

It would like the bank to introduce mortgage payment holidays to help struggling homeowners and to act less aggressively towards customers in difficulties.

According to Credit Action, over 19,000 homes were repossessed in the six months to the end of June.

Of this number 4,000 were seized by Northern Rock and Chris Tapp, a director at Credit Action, believes the bank is acting harshly because it is keen to repay its Bank of England loan.

This week, the bank revealed that it was ahead of schedule in its repayments, having repaid £15.4 billion in the nine months to the end of September.

Another factor influencing repossession rates dates back to pre credit crisis days, when the lender’s “Together” mortgages offered borrowers up to 125% of a property’s value.

Taking the form of part mortgage, part personal loan, “Together” was particularly attractive to first-time buyers.

However, these borrowers now make up three quarters of Northern Rock’s repossession cases.

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