Three years ago my job description was amended, from dealing with cases of private landlord harassment and illegal eviction, to include defending mortgage borrower’s in financial difficulty from repossession by their lenders.
As is so often the case in public sector advice work you don’t get any training in this. In my case a blue ring-binder folder was thrust into my hands with the instruction that I was now the point of contact for mortgage rescue scheme applications.
Then you are active. Day 1: For six months I used the folder as my bible, it was a government hand-out after all but I found I was getting nowhere fast and in no better a position than the clients who were coming to me for help. When a powerful corporate law team reject your offer you tend to believe it can’t be challenged. Headed note-paper can be intimidating.
I would ask the lender for one concession or another, and just get a refusal and didn’t know what to do next. I was also appearing in court without really knowing what I was doing and relying on sympathetic district judges to help me out, which they did.
One day I threw all my files up in the air, called some people in a neighbouring borough who had more experience than me in this field and dumped myself in their office for a few hours saying: ‘Tell me all.’ It was a master class and I quickly realised that I was being railroaded and hoodwinked along with my clients.
I found there are around ten or 11 separate things that a mortgage lender can offer their client as an alternative to repossession. Such methods are known as ‘Forbearance’, and that these forbearance methods, often known as ‘Lender Hardship tools’, aren’t usually offered up without a fight. I also learned how to use law and logic to challenge refusals and save the client’s home.
Not long after this I met a man who used to be the head of mortgage repossessions for a major high street lender. I asked him what happened the other side of the wall that me and my kind were blindly firing arrows over. He told me: ‘Ben, we know what you guys do. All this case law and legal stuff but it isn’t that complicated. The name of the game is – get the money or get the house.’
In the bin
I asked him to clear up for me a common gripe of all mortgage repossession advice workers, what happened to the signed third party authorisation letters we stapled to the letters that went missing, with every single bank we communicated with. He looked a little embarrassed and replied: ‘We just rip them off and throw them in the bin.’ So the lender won’t negotiate with you because they don’t have their client’s authority.
Everyday of the week I see clients on tranquilisers, even suicidal. Worn down by endless letters that they don’t understand and persistent phone calls that wears down their resistance. And yet, armed with three years of experience now, I sort through their piles of unopened letters and find they are a long way from dead in the water. They have loads that they can do but the lenders rarely tell them and they don’t know how to ask, or challenge a refusal.
In the past few years the Financial Services Authority have levied a number of fines on the worst offenders, which has had the strange effect of making them the easiest to negotiate with, because although the fines are paltry in finance terms, they no longer want the bad publicity.
This doesn’t mean that bad offenders aren’t still operating. They have just so far evaded FSA action so are intractable and resistant to negotiations.
Mortgage cases often drag on for a year. Court applications to suspend or adjourn are usually met with fierce and yet legally pointless defences. I have so many cases where a previously unemployed mortgagor, facing possession who, at the last minute finds full time permanent employment, applies to court to hold action, only to find an embarrassed lawyer instructed to turn up and oppose the application get balled out by the DJ. They often apologise to my client for even being there, because they see the complete unreasonableness of the mortgage lender’s position.
The Council for Mortgage Lenders estimates that there will be 45,000 repossessions in 2012, more when the lenders who are raising the SVR in May start to kick in. That means maybe (a conservative guess-timate) 200,000 people under threat of repossession? How many of those people need to lose their home? How many of them become part of the 45,000 when they don’t need to be, simply because they don’t know what to ask for or how to negotiate an alternative to repossession?
I firmly believe that if all advice workers knew about mortgage borrower’s rights, those 45,000 would be down in 4 figures. 90% of the people who turn up for advice, facing mortgage repossession don’t need to be in that position.