CALLS FOR NEW MEASURES TO PREVENT REPOSSESSIONS

The UK Government has announced measures to help people struggling to pay their mortgage avoid losing their home, prompting calls for the Scottish Government to follow suit after it emerged borrowers in Scotland will not be covered.

The Scottish Government said the toughened regulations did not apply to Scotland because it has a different legal system and Cabinet Secretary for Health and Wellbeing claimed on BBC Radio Scotland today that Scots are “better protected” against mortgage repossession than homeowners in England and Wales.

However, the Govan Law Centre has warned that immediate reforms are needed protect households from repossession.

GLC's principal solicitor, Mike Dailly has written to Nicola Sturgeon to invite her to see 'coal face' evidence of the problem in her own constituency.

Mr Dailly said: "The Cabinet Secretary's belief that Scottish homeowners are better protected than in England is dangerously wrong and will leave Scottish households exposed to repossession and homelessness during the credit crisis and recession.

“The Scottish Government needs to act immediately to protect Scottish households and we have invited Ms Sturgeon to meet with us so we can show her evidence from the 'coal face' and discuss the lifeline reforms that could be introduced quickly and easily".

"GLC's defended mortgage repossession casework - across Glasgow, East Renfrewshire and East Dunbartonshire - provides irrefutable evidence that the Scottish system has major deficiencies which place Scottish households at risk of repossession and homelessness during the credit crunch.

“These deficiencies cannot be cured by publicity campaigns or press releases, as proposed by the Scottish Government."

Scottish Ministers stressed that they would consider the move to see if it could be replicated in Scotland, but pointed out that they had already set out other measures to tackle the economic crisis.

A spokeswoman said: "Gordon Brown has made this announcement. It does not apply in Scotland but it is something that we are looking at to see if there is something we can do here."

The Prime Minister Gordon Brown said new guidance was being given to the courts to halt actions to repossess properties unless all alternatives had been "fully examined".

Under the new proposals, new court protocols will help make repossessions a last resort, and the Government is proposing that companies engaged in sale and rent back schemes, which may target vulnerable home owners, should be brought under FSA regulation.

The Civil Justice Council's new protocol sets out clear guidance on the steps that lenders are expected to take before bringing a claim in the courts to ensure that repossessions are a last resort.

Lenders will now be expected to demonstrate that they have tried to discuss and agree alternatives to repossession when borrowers get into trouble with their mortgage repayments. If a case reaches court, lenders will be required to tell the court precisely what they have done to comply with the protocol.

The new protocol, which will come into force on November 19, recommends that lenders and borrowers discuss the cause of arrears, and whether the problem is likely to be temporary or long term.

They must also explore options to help people stay in their home, such as extending their mortgage term, changing the type of mortgage they have, such as switching people to an interest only one, deferring the payment of interest and adding arrears to the overall loan.

Back to Top