Rock makes Damascene conversion on repossessions

Northern Rock has undergone a Damascene conversion over its treatment of mortgage customers in arrears, a debt charity has said.

The lender, which has been roundly criticised for keeping its mortgage rates punishingly high and repossessing a disproportionately large number of homes, is overhauling the way it approaches bad debts.

"We are seeing big changes at the Rock," said Malcolm Hurlston, chairman of the Consumer Credit Counselling Service (CCCS). "Before, they took a tough approach with borrowers in arrears but now there is a road to Damascus scenario – they are being more sympathetic."

In a summit last week with leading debt and housing charities, including the CCCS, Credit Action, Shelter and the Money Advice Trust, Northern Rock set out its plans for stepping up help to those facing repossession.

"We are looking to work through problems with our customers on a case-by-case basis. Where appropriate, we will offer payment holidays, reduced monthly repayments and conversion to interest-only mortgages," said Jemma Rundle, a spokeswoman for Northern Rock.

In addition, Rock debt advisers will call people who are in arrears to see what extra help can be offered, rather than simply writing letters to them. This follows the spirit of a new mortgage-industry protocol which comes into force on Wednesday, setting better standards for how homeowners facing repossession should be treated by lenders.

It is believed that the Rock management could be feeling the political heat after a barrage of negative headlines over its attitude to people facing repossession. Despite Treasury ministers insisting that the Government only has an "arm's length" relationship with the Rock, the bank's new chief executive, Gary Hoffman, may be keen to stop the negative publicity and so please his new political masters.

Northern Rock may also be concerned by the latest disturbing signs from the property market, starkly reminiscent of the early 1990s recession. The Rock and four of its biggest mortgage rivals have admitted that they have seen a dramatic rise in the numbers of people voluntarily giving up their properties because they are unable to meet their mortgage repayments.

Beccy Boden Wilks from the debt charity National Debtline said a surge in voluntary repossession was a suresign of mounting desperation: "Perhaps they think by handing over their keys they will at least ensure that the property is sold at auction by the lender and that it gets the best possible price. They figure that if they leave it, then the price will fall further and they could be left still owing part of the mortgage."

But entering voluntary repossession is no solution, said Ms Wilks: "It can take months to sell the property and it could be at a knockdown price, so there could be a shortfall to pay. The lender can come back years later and ask for its cash."

And it's not just over repossession that the Rock – led by chairman Ron Sandler – seems to be having a change of heart: "They have told us that they will re-examine the individual voluntary arrangements they have previously rejected," Mr Hurlston said.

In an IV, the debtor agrees to repay a set amount a month over, say, five years. The debtor writes off up to 75 per cent of what they, but the lender, who must agree to lower monthly payments, gets the remainder..

Ms Rundle confirmed that the Rock would look at IVA requests on a "case-by-case basis" but denied that it had dismissed previous applications from distressed borrowers out of hand: "We have always tried to work with customers who find themselvesin difficulty."

Life and Style
Customers can get their caffeine fix on the move
food + drink
Life and Style
techCould new invention save millions in healthcare bills?
Sport
David Moyes gets soaked
sport Moyes becomes latest manager to take part in the ALS challenge
Voices
Mosul dam was retaken with the help of the US
voicesRobert Fisk: Barack Obama is following the jihadists’ script
PROMOTED VIDEO
Arts and Entertainment
Flat out: Michael Flatley will return to the stage in his show Lord Of The Dance
Michael Flatley hits West End for last time alongside Team GB World champion Alice Upcott
News
Members and supporters of the lesbian, gay, bisexual, transgender (LGBT) community walk with a rainbow flag during a rally in July
i100
Life and Style
Black Ivory Coffee is made using beans plucked from elephants' waste after ingested by the animals
food + drinkFirm says it has created the "rarest" coffee in the world
Arts and Entertainment
Loaded weapon: drugs have surprise side effects for Scarlett Johansson in Luc Besson’s ‘Lucy’
filmReview: Lucy, Luc Besson's complex thriller
Arts and Entertainment
Jamie T plays live in 2007 before going on hiatus from 2010
arts + entsSinger-songwriter will perform on the Festival Republic Stage
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Life and Style
food + drinkThese simple recipes will have you refreshed within minutes
News
Jermain Defoe got loads of custard
i100
News
peoplePamela Anderson rejects ice bucket challenge because of ALS experiments on animals
Arts and Entertainment
tvExecutive says content is not 'without any purpose'
News
A cleaner prepares the red carpet for the opening night during the 59th International Cannes Film Festival May 17, 2006 in Cannes, France.
newsPowerful vacuum cleaners to be banned under EU regulations
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.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - IT

£20000 - £25000 per annum + OTE £40,000: SThree: Computer Futures has been est...

Generalist HR Administrator, Tunbridge Wells, Kent - £28,000.

£25000 - £28000 per annum: Ashdown Group: Generalist HR Administrator - Tunbri...

Application Support - Enterprise Java, SQL, Oracle, SQL Server

£45000 - £55000 per annum: Harrington Starr: A well-established financial soft...

Service Desk Analyst (Graduate, Helpdesk, Desktop, Surrey)

Negotiable: Harrington Starr: Service Desk Analyst (Graduate, Helpdesk, Deskto...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?

Waxing lyrical

Madame Tussauds has shown off its Beyoncé waxwork in Regent's Park - but why is the tourist attraction still pulling in the crowds?
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
From slow-roasted to sugar-cured: how to make the most of the British tomato season

Make the most of British tomatoes

The British crop is at its tastiest and most abundant. Sudi Pigott shares her favourite recipes
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Malky Mackay allegations: Malky Mackay, Iain Moody and another grim day for English football

Mackay, Moody and another grim day for English football

The latest shocking claims do nothing to dispel the image that some in the game on these shores exist in a time warp, laments Sam Wallace
La Liga analysis: Will Barcelona's hopes go out of the window?

Will Barcelona's hopes go out of the window?

Pete Jenson starts his preview of the Spanish season, which begins on Saturday, by explaining how Fifa’s transfer ban will affect the Catalans
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape