Mortgage arrears: follow up - Treasury Contents

Written evidence submitted by Andrew and Julie Peffer


  We, Andrew and Julie Peffer are submitting this Formal Submission following on from our first Formal Submission printed on Tuesday 21 July 2009 and published by the Treasury Select Committee on Saturday 8 August 2009.

  Since the Formal Submission published by the Treasury Select Committee in August 2009 our three properties have sold, two of which went at auction. The Lenders and all those they employ have created a huge shortfall leaving us with a continuing mounting debt, although many people are under the impression, repossession is the end of the Borrower(s) liability. We have been advised to go bankrupt, why should we, we have done nothing wrong, illegal or fraudulent. By doing so, other creditors owed will lose their money; this cannot be right when the situation could have been avoided by the Lenders in the first place.

  In the conclusion it was mentioned previously, there were no Government bodies to help during these trying times and that is why we had to turn to the press. This became steadily worse, the Government bodies set up are supposed to be fair to the Lender and the Borrower(s), in reality, they are only there for the Lender.

  As human beings we need a financial infrastructure as it is our every day existence, Lenders and Government bodies are aware of this. If Government bodies set up to investigate issues concerning repossession find Lenders at fault it would end up costing them not millions, but billions, what better way to solve the issues than convince the Borrower(s) Lenders are whiter than white, this is an easy way out and cannot be right.

  Unless a person has been through a repossession one will never understand what actually does go on "After the Court Stages of Repossession", this though we would not impose upon our worst enemy. We feel by keeping the Treasury Select Committee informed via these submissions they have an insight into the problems the repossessed face, after the Courts grant lenders a Possession Order, then radical changes can be imposed.

  We now carry on from our previous submission with a further list of issues and the new protocol rules which are not adhered to.

  1. Certain Financial Institutions will state, they have not taken Government funding; in effect they all have in one way or another. Considering what has been ploughed into the system to keep the Institutions going it would have been a lot harder for them to survive, this was to benefit everyone but in reality has only helped the Financial Institutions. One example of this, not all Lenders passed on interest rate cuts.

  2. Lenders should never expect the Borrower(s) to subside their profits via the Variable Interest Rate, especially when the Government have set interest rates at an historical low of 0.50% and are urging Lenders to be more responsible. Yes we are all aware when signing the Terms and Conditions Variable Interest Rates can change; if this condition was taken out nobody would be advanced a mortgage as this does not suit Lenders. The Variable Interest Rate should never be a license for Lenders to print money. Comments from Lenders are, they are not connected to the Bank of England Base Rate (or the LIBOR rate), yet every time the Bank of England Base Rate goes up, the Lenders increase their rates as well. In August 2009 to November 2009 a mortgage payment increased by £278.00 per month.

  3. Financial Institutions are quick enough to quote Terms and Conditions if a payment is late, yet when they shut their branches early due to snow there is no leeway. The Borrower(s) is/are informed, you should have got the payment in sooner and a charge is levied. The self employed have to carry on regardless, it is not being clever, they have to feed themselves and pay bills.

  4. If the Borrower(s) is/are self employed Lenders should never make statements, it was your decision to become self employed and that is not our problem. Lenders have no qualms in taking self employed on in the first place and they would have had to have passed the correct criteria.

  5. Lenders, Solicitors and Debt Agencies never suggest the Business Debt Line to self employed people, other organisations do not deal with the Small Business Man. Trying to get through to the Business Debt Line at times is impossible, on the odd occasion when it is possible a message states they are busy, try calling back later. Self employed are forgotten people where repossession is concerned but on occasions they need advice as well.

  6. When self employed people query Income and Expenditure Forms sent to them which never takes into account a Small Business Persons situation Lenders or their Solicitors never respond. It is frowned upon by all concerned when the self employed attempt to submit their own Income and Expenditure Form.

  7. Lenders use standard letters, although they may issue their final decision in say August 2009 they still state at the end of November 2009 there are still ways in which they can help. If the Borrower(s) write back and ask what they can do; they refer the Borrower(s) to their letter in August 2009 when their final decision was given. Why state this when they do not mean it. Standard letters should be adapted and certain paragraphs taken out instead of misleading people.

  8. Due to Lenders having selective memory they only want to communicate over the telephone, this way they can say to any Judge, the Borrower(s) said this and the Borrower(s) said that. If the Borrower(s) issue instructions for communication in writing only this must be adhered to, when this happens the Lender should from that point on never write to the Borrower(s) stating, they have not indicated their personal circumstances when in fact the comment is untrue and the Borrower(s) had kept the Lender fully informed by letter, maybe once or twice a month.

  9. Lenders should read up about a Borrower(s) before putting in writing incorrect facts. For example, stating the Borrower(s) was/were transferred to interest only type payments when in fact an account had only ever been interest only type payments.

  10. With the amount of charges imposed upon the Borrower(s) Lenders should be made to send important documents by Recorded/Special Delivery when there is a time limit to respond in connection to contents within the letter(s) sent, for example in 7 days. Postal Strikes are not an excuse.

  11. Repossession can happen to any person in any walk of life and can be for a multitude of reasons. Local Authorities and organisations set up by the Government should always understand the repossessed are still Tax Payers and be treated accordingly.

  12. Although there are Government Schemes, if your Lender does not participate in for example the Homeowners Mortgage Support Scheme you are left out in the cold. No matter what schemes are put in place there will always be repossessions.

  13. Under new Government directive Lender's/Solicitor's must inform the Local Authorities proceedings for possession of a property has started. When the Local Authorities refer you to an organisation they should never make statements to the Borrower(s) to the effect, what do you want us to do about it, it is obvious the repossessed are about to be homeless and as sated, although they may be homeless, they are still Tax Payers.

  14. The Borrower(s) should be able to inform the Council they may become homeless, even if they have not been to Court. Just because there are Government Schemes to help keep the Borrower(s) in their home in many cases this is delaying the inevitable. Under present rules you cannot submit a Homeless Application until 28 days before the Borrower(s) has/have to vacate the premises. If the Local Authorities have an application before it goes to Court this would be on the understanding the Borrower(s) may not become homeless, at least they would be aware of the situation. We fully understand this would cause more work but 28 days is not enough time.

  15. Lenders should have explored all avenues whether it is over the telephone or in writing before contacting their Solicitor. If an option has never been suggested it should never be through the Solicitor in the first instance, this gives the impression the Lenders want to wash their hands of protocol.

  16. Lenders should never have the right to send a full and final response then ignore the Borrower(s) on new issues that arise. The agreement is a two way affair the Borrower(s) should not ignore Lenders, likewise Lenders should never ignore the Borrower(s).

  17. When a Solicitor is appointed by a Lender they should never in their first correspondence be adopting psychological violence towards the Borrower(s) (who at that point is becoming distressed with the whole situation) by stating, any losses their client suffers due to a shortfall they will be liable for and Solicitors or Debt Agencies will be used to recover the monies, after all the Borrower(s) has/have not even been repossessed at this point and no valuations have been conducted. Solicitors are quick enough to mention about shortfalls but quite conveniently it slips their mind to inform the Borrower(s) their client are duty bound to obtain the best possible price for the property.

  18. If the unfortunate happens and repossession takes place the wording on an Order of Possession is as follows:

    The court orders that

      "1.  The defendant give the claimant possession of (address) on or before (date).

    Then at the bottom of the Order of Possession there is a paragraph headed:

      To the defendant. The court has ordered you to leave the property by the date stated in paragraph 1 above. If you do not do so, the claimant can ask the court, without a further hearing, to authorise a bailiff or High Court Enforcement Officer to evict you (In that case, you can apply to the court to stay the eviction; a judge will decide if there are grounds for doing so.)

  19. It does not help when Government bodies/Lenders contradict each other on the true meaning of Voluntary Possession. In light of Note 18 a person would have been to Court and given a date to vacate the property. Therefore attending a Court Hearing is not deemed as Voluntary Possession if you send back the keys on the date set by the Judge. People assume you have to wait for a Bailiff to evict you and until that time, sending the keys back on the date set by the Judge is Voluntary Possession, this is totally wrong. Voluntary Possession is deemed to be making yourself "intentionally homeless".

  20. Voluntary possession and what is deemed to be making yourself "intentionally homeless" requires clarification.

  21. Should the Borrower(s) try and go down other avenues to secure a place by renting privately it must be pointed out an Agent will do a Credit Check, if you are not honest in the first place it will come out later. Once an Agent knows your situation in full and then promises to get back to you that call never materialises.

  22. With the present system in this country Lenders are allowed to wash their hands of the situation once they have a Possession Order by handing it over to a Managing Agent and selling as quickly as possible at whatever cost, this cannot be right. Changes should be implemented to protect the Borrower(s). Lenders will state, if the Borrower(s) does/do not pay any shortfall they will lose, not true, they are happy to sell at a loss as they will use Insurance Companies, Debt Agencies and even wait for the Borrower(s) to get back on their feet by waiting in the hope they acquire something in life, ie inheritance then swoop like wolves.

  23. Agents should always have the right software when advertising properties. For example, if they are only set up for residential properties, they should not be allowed to advertise commercial properties resulting in a commercial building being advertised in a residential section.

  24. Agents should never be allowed to describe a terraced shop as a detached house, apartment or studio flat also a detached warehouse/production unit as a 1 bedroom detached house, this goes against the Property Misdescriptions Act 1991.

  25. When an Estate Agent is reported to Trading Standards that a property is mis-described, they should never find any excuse not to prosecute the Agent when there is compelling evidence.

  This has been highlighted on occasions due to a property being advertised in the same manner in December 2009. This was reported to Trading Standards around five to six weeks after it was first advertised in the residential section as a one bedroom detached house. The Agent is now unable to market the property on their own web site due to not having the right software.

  26. Trading Standards are meant to be there to protect the consumer. If the Borrower(s) reports an Agent under Property Misdescriptions Act 1991 and subsequently the Agent informs Trading Standards the Lender would not consider an offer this does not give Trading Standards an excuse to inform the Borrower(s), the Agent would be able to convince a Judge the Lender would not consider an offer. In effect Trading Standards are implying an Agent has the right to do just as they please if the Lender does not consider an offer. An offer not being considered has nothing to do with the Property Misdescriptions Act 1991.

  27. When Agents place an advert in the local paper as repossessed in the corner with the company name visible, they are suggesting the business has ceased trading, when in fact it could be completely the opposite where the property has been repossessed and the company is still trading. In effect, Agents doing this are destroying that business and yet there is no Law to say or so we are advised they cannot do this.

  28. It is a conflict of interest when Managing Agents use their own subsidiary companies to do valuations and taking the property to their own Auction House.

  29. If a property is to be marketed properly it should remain on the net and not be taken on and off for no apparent reason, it should be imperative this happens when the Managing Agent's subsidiary company takes it to Auction as at this time it is only advertised for a very short time before the Auction day.

  30. Estate Agents are supposed to do weekly checks for insurance purposes, anyone can say they have been to a property and checked it, but do they have hard evidence.

  31. Why do some properties stay on the net for months on end once they have been sold ie seven months after sale?

  32. If the Borrower(s) reports the Lender to the Financial Ombudsman Service the Borrower should not be strung along for months on end only to be informed, they cannot fine or punish Lenders without any explanation, what good are the Financial Ombudsman Service if they are unable to fine or punish Lenders, we feel they are only there for the Lender. When a case gets too complicated to handle it is just pushed to one side due to time constraints, which is not the Borrower(s) problem.

  33. The Financial Ombudsman Service should be given more powers to protect the Borrower(s) against Lenders "After the Court Stages of Repossession" when there is compelling evidence, after all what repossessed can afford to seek Independent Legal Advice and eventual Court Action which is the nonsense that is thrown at them by Lenders and any organisations set up by the Government.

  34. The Government have policies in place to help people stay in their homes but more should be done to protect the Borrower(s) from psychological violence that is adopted by Lenders, Solicitors, Managing Agents, Estate Agents and Debt Agencies "After the Court Stages of Repossession". We are not for one moment accusing every one of them using psychological violence towards the Borrower(s) but when Lenders will do nothing to those they employ in the sale of the property and subsequently hold the Borrower(s) responsible for all costs even when those they employ are clearly at fault this leaves it open to corruption.

  35. When contacting Lenders under the Subject Access Request they should provide all requested documents.

  36. On asking for full break down of charges of Repossession Package/Estate Agents Fees/Solicitors Costs etc these should be itemised, not just on the statement as a lump sum which is never forthcoming from the Lenders.

  37. On the issue of monthly charges, for example £100.00 per month arrears fee, we feel is extortionate. Lenders are now getting round the charges issue by issuing leaflets stating many of them are variable; therefore they appear to be able charge what they like.

  38. The repossession process should be more open by Land Registry publishing all properties sold on the net and not excluding repossessed ones.


  We are not implying the Borrower(s) should be able to walk away from their responsibilities but this issue of selling repossessed properties needs a complete overhaul, if the Lenders want to sell the property cheap why should the Borrower(s) take the blame. The agreement was signed by the Lender as well as the Borrower(s).

  We are aware the contents of our Submissions will not go down well with Lenders and certain organisations set up by the Government. When you have been Tax Payers for 35 years and feel as though you have been dragged through the gutter and other repossessed are saying the same, the Authorities have to be aware. Unfortunately there will always be repossessions; the only way to protect those in the future is to act now.

  As Tax Payers the repossessed deserve better representation, "After the Court Stages of Repossession".

  We would like to thank the Committee for allowing us to submit a further submission.

March 2010

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