Action on repossessions has been promised by Northern Rock.
The new chief executive of Northern Rock has promised to help mortgage borrowers who are struggling to keep up with their repayments during the economic downturn. His comments come after the nationalised bank was criticised over the number of homes it has repossessed compared to other lenders.
Speaking to MPs on the treasury select committee, Gary Hoffman insisted that repossession must be a last resort and said he wants Northern Rock to lead the way in terms of introducing new mortgage rescue products that will help to minimise the impacts of the recession on the housing market.
"Above all we want to make sure customers remain in their homes," he remarked. "We make sure there are payment holidays and customers can reduce payments to stay in their home," he added, insisting he will be looking at ways to transform the attitudes of people working within Northern Rock's debt management department.
Mr Hoffman suggested the reason why Northern Rock had repossessed a larger proportion of homes than its rivals was because of defaults on its 125 percent mortgages, which he said accounted for three-quarters of all repossessions carried out by the bank.
Northern Rock recently launched a new fixed-rate mortgage range with rates starting at 3.99 percent for those borrowing 65 percent of the value of their property.
