Government anti-repossession moves welcomed

Date:Thursday 23rd October 2008

Action by the government to reduce the number of home repossessions has been welcomed by various organisations.

In news to interest people with mortgages, mortgage lenders wanting a repossession court order will now have to prove that they tried to help homeowners in difficulty and to find alternative options first.

Yvette Cooper, chief secretary to the Treasury, said it was important to ensure that repossession "is the last resort, not the first", Reuters reports.

In addition, the government wants the Financial Services Authority (FSA) to monitor sale-and-rent-back firms.

These buy property at low prices from struggling mortgage holders to lease it back to them.

The Trades Union Congress welcomed the government's moves and called on banks and building societies to act responsibly "to stop more families being at risk of losing their homes".

Finance website said that the action is "really nothing new" but praised the government for reinforcing the "spirit" of the FSA's guidelines concerning repossession of property.

It said that some lenders "could perhaps be accused of having taken poetic license with the guidelines over the past year".