Speak up if you’re behind with your mortgage

Personal finance editor

The number of people who complain about their mortgage is soaring to record levels, but many are leaving it until they get into financial trouble before raising the alarm.

Problems are becoming so bad that lenders have been told today to “get creative” and do more to help struggling borrowers.

The Financial Ombudsman Service’s latest complaints data published today reveals that last year 13,659 people – the highest number recorded – contacted the ombudsman for help with a mortgage or secured loan problem.

Worryingly, a third of these had slipped into arrears before they sought help. And, of the remaining cases, a large number struggling to make ends meet felt unable to say that they were facing significant financial problems.

The chief ombudsman, Tony Boorman, said: “Mortgages are the most significant purchase most of us will make in our lives, so we understand why people might be reluctant to say that they’re struggling to pay for their home.

“Many of the cases where people face losing their home have been heartbreaking to deal with – but could potentially have been avoided. So if money is tight, you should never be afraid to ask for help or guidance. Speak up sooner rather than later; there’s a lot that can be done to help before things get out of hand.”

The ombudsman has been alerting lenders that they’re expected to get creative when helping people get back on track – especially before payments get missed. And though early signs suggest that this is having an impact, there’s still more that they should do to help, Mr Boorman said.

Typical areas of complaint taken to the ombudsman relating to financial difficulties include arrears handling, charges, repossession, post-repossession problems and recovery of shortfalls.

Other problems brought by people in arrears included sales and advice, mortgage administration, upfront fees charged where no mortgage is offered and declined offers.

There have also been disputes over valuations and allegations of misrepresentation, suitability or misleading literature.

“Consumers and lenders all have a responsibility to work together when problems arise,” Mr Boorman said.

There was positive news from the Council of Mortgage Lenders last week, which reported that both the number and the proportion of mortgages in arrears fell during the first quarter of 2014.

CML’s director general, Paul Smee, said: “The downward trend in the number of mortgages in arrears or ending in repossession is welcome. Repossession is absolutely the last resort – the aim is to keep people in their home and get their finances back on track whenever possible.

“Lenders recognise that, behind the numbers, these are real households, with differing circumstances. Lenders try to ensure that all borrowers are treated fairly and sensitively. They continue to improve their practices to try to achieve the best outcomes when payment problems do occur.”

But The Money Charity revealed last week that the average household debt including mortgage was  £54,546 in March, up from £54,434 the previous month.

Alarmingly, it also reported that the UK is currently seeing the biggest increase in loans and overdrafts for individuals since February 2008, suggesting that people may be, once again, taking on too much debt.

Michelle Highman, chief executive of The Money Charity, said: “Borrowing money when it’s done in a carefully thought-out, affordable way, can make things happen that would otherwise seem impossible. However, if you don’t have a plan to pay the money back, things can quickly spiral into more difficult, unmanageable debt.”

Sport
England's women celebrate after their 3rd place play-off win against Germany
Women's World CupFara Williams converts penalty to secure victory and bronze medals
Arts and Entertainment
Ricardo by Edward Sutcliffe, 2014
artPortraits of LA cricketers from notorious suburb go on display
News
newsHillary Clinton comments on viral Humans of New York photo of gay teenager
Arts and Entertainment
The gang rape scene in the Royal Opera’s production of Gioachino Rossini’s Guillaume Tell has caused huge controversy
music
Finacial products from our partners

 

Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Sales Assistant / Buyer

    £15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

    Recruitment Genius: Customer Service Advisor

    £15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

    Recruitment Genius: Compliance Manager

    £40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

    Day In a Page

    Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

    Is this the future of flying?

    Battery-powered planes made of plastic, and without flight decks
    Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

    Isis are barbarians

    but the Caliphate is an ancient Muslim ideal
    The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

    Curse of Brink's Mat strikes again

    Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
    Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

    'The ministers talk to us about miracles'

    Why Greeks are cynical ahead of the bailout referendum
    Call of the wild: How science is learning to decode the way animals communicate

    Call of the wild

    How science is learning to decode the way animals communicate
    Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

    'The economic collapse has happened. What is at risk now is democracy...'

    If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
    The science of swearing: What lies behind the use of four-letter words?

    The science of swearing

    What lies behind the use of four-letter words?
    The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

    The Real Stories of Migrant Britain

    Clive fled from Zimbabwe - now it won’t have him back
    Africa on the menu: Three foodie friends want to popularise dishes from the continent

    Africa on the menu

    Three foodie friends want to popularise dishes from the hot new continent
    Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

    Who will fill Donna Karan's boots?

    The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
    10 best statement lightbulbs

    10 best statement lightbulbs

    Dare to bare with some out-of-the-ordinary illumination
    Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

    Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

    Briton pumped up for dream meeting with world No 1
    Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

    Nick Bollettieri's Wimbledon Files

    It's time for big John Isner to produce the goods to go with his thumping serve
    Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

    Dustin Brown

    Who is the German player that knocked Nadal out of Wimbeldon 2015?
    Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

    Damien Martyn: 'England are fired up again, just like in 2005...'

    Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test