: Mortgage arrears and repossessions show little sign of easing, and many families would have lost their homes if building societies and other lenders had not offered emergency deals. Ian MacKinnon talks to people caught up in the crisis

Manager's gentle touch

'THE LAST thing we want to do is repossess a home, for humanitarian as much as for commercial reasons. Going to court can be very traumatic for everybody. It may sound corny, but we do not want to put people out on the street.'

Roger Herbert, district manager at the Woolwich's Croydon branch in south London, tries to stem the tide of misery hidden in the house repossession figures.

Like many building society managers, he is prepared to go to extraordinary lengths to ensure that the situation never reaches that low point.

The strategy appears to be paying off. People are less embarrassed to go to their lender sooner to explain the difficulties. But should borrowers in difficulties be slow to come forward, warning signals will begin flashing in the Croydon branch when households are two months in arrears. Mr Herbert will contact the homeowners when they fall three months behind.

The approach is a 'softly-softly' one. 'I will go along and find out the family's financial circumstances and personal circumstances, and in particular work out a household budget, electricity bills, food, that kind of thing, and work out how much they can afford to pay,' Mr Herbert said. 'If it's reasonable we accept that and review it in six months. Rather than resent the intrusion most people welcome it.'

Almost no payment within reason is too low. He takes the view that with a mortgage repaid over 25 years, borrowers having difficulties for 12 or even 24 months is not impossible to bear.

Caught in a sales trap

Richard Wilton is trapped. Like many thousands of homeowners, he cannot afford to move, even if he could find a buyer.

His two-bedroom terrace house in Chatham, Kent, cost pounds 55,000 at the height of the 1988 boom. Ever since, he has watched helplessly while its value tumbled. A recent valuation said that it was worth only pounds 42,500. As his mortgage is for pounds 51,000, even if he manages to sell he will have to pay the National Westminster Bank almost pounds 10,000.

Mr Wilton has wanted to move for some time, but has run into a series of brick walls in his attempts to escape the brutal logic of the figures. In his search for a way out of his predicament he sought help from the Citizens' Advice Bureau, which told him that one of his suggestions, simply leaving the keys and walking away from it, would result only in the house being sold at auction and the lender chasing him for the pounds 10,000 difference between the sale price and the value of the mortgage.

He also sought to renegotiate his mortgage based on the current value of the house - even attempting to persuade the bank to split the losses on the property - but without success.

'I did not come into the market to make a quick buck, but the figures show that buying a house was a rip-off. This is a country where we are supposed to be able to move where and when we like. But, at the moment, that's simply not how it is and some have said that the market will not recover its value until the end of the decade. Most can't wait that long.'

Society was sympathetic

IT WAS a severe blow for Mark Stevens when he lost his job as a computer recruitment consultant. His first reaction was to inform his building society, the Abbey National, which immediately agreed that he should pay half the mortgage from his wife's earnings and some savings, and review the situation in three months.

Mr Stevens, 36, and his wife, Amanda, 30, who own a two-bedroom flat in Teddington, Middlesex, felt sure that in that time he could find a new job and manage to pay about pounds 400 a month, about half of the full repayment.

But by December last year, no job was forthcoming and they discovered that Mrs Stevens was pregnant with their first child. Again, the building society reduced their monthly repayments, to about pounds 150 for another three months. Falling interest rates had also helped.

When another job fell through, and Mrs Stevens had to give up her job to have the baby, Mr Stevens again contacted the building society, which agreed to continue the arrangement.

Now just under half of the mortgage repayment is being paid by the Department of Social Security for 16 weeks, after which, if the family's circumstances have not improved, the full mortgage interest payments will be met. But although the DSS is officially contributing pounds 46.59 a week, Mr Stevens has so far received only three cheques, for pounds 11, pounds 94 and pounds 110, which bear little relation to the repayment amount.

He has now set up his own recruitment consultancy, but he said he was pleased with how they had been treated.

Leading article, page 20

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