The mortgage madness is clearly catching up with more than a few of us…
It is reported that over 300,000 of us with mortgages are behind with our repayments in the first quarter of this year and unsurprisingly, we are are finding it harder to pay our debts off.
New figures from the Financial Services Authority (FSA) show that 54,000 of us fell behind on repayments during the quarter, bring the total number of mortgages in arrears to 302,000.
The number of new cases has stayed the same but the number of mortgages in arrears is 15% higher than the first quarter of last year. This seems to imply that those of you who get into difficulties are finding it harder to catch up with your repayments.
- Repossessions on the rise
More worryingly, the number of repossessions rose significantly in the last quarter of 2007 and the first quarter of 2008. It had risen by 40% year-on-year to reach 9,152 new cases in the first three months of 2008.
The FSA said there was evidence that some mortgage lenders were handling arrears and repossessions badly, particularly for those of you with poor credit history.
Need help with your poor credit history? Talk to a specialist adviser who can help.
In a review of 13 lenders offering standard mortgages, self certified mortgages and buy-to-let mortgages, the FSA found some specialist lenders were focusing too strongly on recovering your arrears and had not taken your personal circumstances into consideration.
Some were too ready to take court action against those who had fallen behind on repayments, and had not trained their staff to deal with arrears cases as well as mainstream lenders had.
Across the board, the FSA found lenders imposed charges that could be unfair to borrowers, and that they could have done more to consider customers' individual circumstances and offer more options to resolve their problems.
Rising costs for mortgages, utilities and food, and the state of our economy have led some analysts to predict an increase in the number of borrowers struggling to repay their mortgage debt.
Earlier today, Northern Rock said the number of its customers who had fallen into mortgage arrears was up 0.38% since the same time last year.
The FSA said lenders needed to ensure that they would treat customers fairly if they did fall behind on the loan, as Lesley Titcomb, the FSA director responsible for the mortgage sector explained:
"As our data shows, in these current market conditions more people are struggling to meet their mortgage payments and it is vital that firms treat them fairly. This means paying attention to their individual circumstances and not repossessing their homes when there may be an alternative solution. Repossession has to be the last resort."
A separate piece of research by the FSA found some lenders were not checking your incomes when they should have had reason to doubt their accuracy, and that some lenders were vague about how they assessed your ability to repay a loan.
Worried about repossession? Read our 10 steps to lower your risk of repossession
If you are struggling with your finances then do not panic. You can seek advice and support from these organisations:
You should also speak free of charge to a debt adviser who can provide you with advice and solutions to help you resolve your debt and credit problems.