Concerns over levels of repossession have forced an industry body to act.
The Council of Mortgage Lenders has published new industry guidance on mortgage arrears and repossessions to balance the needs of consumers and lenders while ensuring that repossession remains a last resort where repayments are not being met.
Its move follows concern over the number of repossessions being carried out by Northern Rock. The charity Credit Action claimed the lender was twice as likely to repossess the homes of borrowers who have defaulted on their repayments as other institutions. The bank has strongly denied the claims.
CML director-general Michael Coogan said he recognises that there is "significant public concern" over the issue of repossession during the difficult economic climate. "The new guidance should help to reassure consumers that lenders are genuinely committed to seeing repossession as a last resort and that the checks and balances that protect consumers are in place," he remarked.
The guidance gathers together and builds on existing rules set out by the Financial Services Authority in relation to the handling of mortgage arrears, as well as its treating customers fairly principles, to create an industry-wide guide for best practice.
Citizens Advice has welcomed the CML's move, claiming it will encourage those experiencing repayment problems to seek advice and provides them with practical information about the kind of treatment they can expect from their mortgage lender.
