Citizens Advice Bureau's district manager David Gooding on...simple steps for mortgage troubles

CAB district manager David Gooding writes for the Observer

05 March 2009

NATIONALLY over half a million people will fall behind with their mortgage payments this year and the worst thing they could do is ignore their problems and hope for the best.

Rugby CAB is calling on borrowers in trouble to take early action to help themselves and the bureau has some simple advice to help borrowers get out of trouble and stay out of trouble.

If you are in trouble:

1 Don’t ignore your debt problems, this will only make them bigger.
2 Don’t stop paying your mortgage altogether. Continuing to pay what you can on a regular basis will help you reach an agreement with your lender. This is also an entry requirement for some of the government support schemes.
3 Don’t send the keys back and walk away, you are still responsible for the debt on the property.
4 Don’t enter a sale and leaseback scheme without advice, if it seems too good to be true it probably is. These schemes can be misleading and are not yet regulated.

How to get out of trouble:

1 Contact your lender, the earlier the better. Your lender will work with you to try and find a repayment solution. Your lender may be able to lengthen the mortgage term, add your arrears to the outstanding debt, switch to an interest only basis, temporarily reduce your payments or change the method and date of payment.
2. Get free, independent and impartial debt advice from the Citizens Advice Bureau, which can help you manage your debts, talk to your lender, and offer advice on the new government assistance schemes.
3 Check if you are eligible for assistance. Are your payments covered by an insurance policy? Are you eligible for help towards the mortgage through the benefits system? You may be eligible for one of the government assistance schemes.
4 Attend court. Borrowers who attend possession proceedings are more likely to reach an agreement to stay in their homes. Remember, the court is independent to make sure a fair decision is reached.

We have seen a significant rise in the number of people approaching us for help with mortgage arrears and we encourage people to seek help at an early stage to prevent the situation from worsening. However, at a later stage it is not too late to seek advice and we can help the majority of people to come to a workable agreement with their mortgage lender.

Sadly 50 per cent of those facing a mortgage possession court hearing in the County Court do not attend court and it is clear that with help many of these people would be able to remain in their homes.

Rugby CAB hold drop in face to face advice sessions (no appointment necessary) from their offices at Chestnut House, North Street, Rugby on Mondays, Tuesdays, Wednesdays and Fridays between 10am and 2pm. Residents from Brownsover can call 01788 555300 to make an appointment to see a CAB adviser locally and telephone advice is available Monday to Friday between 10am and 4pm on 0844 8552322.

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