Societies 'punishing defaulters': The repossession trap

John Arlidge
Thursday 20 August 1992 23:02

A BUSINESSMAN evicted from his pounds 350,000 home accused building societies yesterday of undermining the property market and punishing home owners who had tried to keep up mortgage repayments during the recession, writes John Arlidge.

Stephen Ensor, 46, said that societies were too keen to repossess the properties of owners who had financial problems. Societies were selling repossessed homes at prices lower than those their former owners could have raised, leaving the former occupants liable for the balance between their debt and the sale price.

Bailiffs took possession this week of Portland House at Bembridge, Isle of Wight, where Mr Ensor, his wife Felga, 44, sons James, 19 and Richard, 15, and daughters Fiona, 17, and Felicity, 12, had lived for six years. The family are now in a council-owned, bed-and-breakfast hostel in Shanklin.

Mr Ensor remortgaged his home at a lower interest rate with the Cheltenham & Gloucester two and a half years ago. But he fell behind on the monthly repayments of more than pounds 3,000 when the recession 'ruined' his business, running up arrears of pounds 50,000. Last year he refused to pay the extra pounds 500 a month the society had demanded.

After the Cheltenham & Gloucester obtained a possession order, a county court judge ruled in April that Mr Ensor could retain the home provided he repaid pounds 3,280 a month. The building society had the ruling overturned on appeal. On Thursday of last week, Mr Ensor was refused leave to appeal against that judgment.

Mr Ensor said: 'We tried to keep up the repayments so that we could stay put and sell the house to pay off the mortgage and the arrears. But the market is in a slump. The building society's policy is to allow people to stay in their homes provided they make repayments. We were paying but they were desperate to repossess.

'If we had given up and stopped making the repayments two years ago, the property would have fetched more money. Now, because potential buyers will know the building society wants to get rid of it quickly, it will fetch less and technically we will be liable for any difference between our debt and the sale price.

'All the money we've paid back over the last two years has gone down the drain. We are being punished for trying. Anybody else who's got a mortgage with the Cheltenham & Gloucester should give it up as soon as they get a possession order. Don't try to keep up payments. It's a complete waste of effort and money.'

Mr Ensor added that the societies were cutting their own throats. 'If you are a building society whose whole business depends on the value of property, would you undermine the value of property by repossessing it? Their attitude seems to be repossess at all costs. It's a daft situation.'

A spokeswoman for the Cheltenham & Gloucester said that several unsuccessful attempts were made to negotiate with Mr Ensor. 'The society gave him every opportunity to bring the terms of the court order up to date before eviction. We don't advise borrowers to stop making repayments. They should contact the society as soon as they know they are in difficulties.'

(Photograph omitted)

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