Homeowners could be at risk of repossession after missing just two monthly mortgage repayments, it has been claimed.
A recent High Court ruling which allowed a mortgage lender to repossess the property of a borrower who had fallen into arrears without seeking a court order has been criticised by debt charities. The Consumer Credit Counselling Service (CCCS) suggested it undermines government efforts to ensure that repossession is a last resort.
Mr Justice Briggs supported the decision of the specialist sub-prime and buy-to-let mortgage lender GMAC-RFC to take control of and sell off the home of a borrower who had missed just two repayments. According to experts, the ruling will have wide-ranging implications for homeowners.
Francis Walker of CCCS told the Times: "This case is shocking and extremely disappointing, particularly in light of the government's new protocols announced last month. The fear is that the practice could become more widespread as the housing crisis worsens."
Last month, the government said new guidance would be given to lenders and courts in a bid to halt the rise in repossessions and ensure all alternative options are considered before a repossession claim is brought to court.
According to figures from the Financial Services Authority, the number of homes being repossessed in the UK rose by 71 percent in the second quarter of this year compared with the same period in 2007.
