The Council of Mortgage Lenders (CML) has published a new guide on mortgage arrears and repossession following growing public concern.
It outlines procedures that lenders should ideally follow in order to ensure they turn to repossession as a last resort.
While it is not designed to be a definitive set of rules to be applied in each individual case, it is hoped that the guide will promote good practice for banks and building societies.
It builds on the principles of the Financial Services Authority, which states that lenders should strive to treat customers fairly.
The CML consulted a number of debt advice organisations while developing the publication.
Citizens Advice director of policy Teresa Perchard commented: “We welcome this guidance, which acts as a good yardstick for borrowers about the kind of practical treatment they might expect to see from responsible lenders.”
Under new protocols set out by the Civil Justice Council, lenders must now demonstrate that they have discussed alternatives to repossession with borrowers that are struggling.
By Jamie Price