guide for borrowers with payment difficulties

If you are having difficulty in keeping up with your monthly mortgage payments, we will handle your financial difficulties sympathetically and positively to ensure that you are treated fairly at all times. You should tell us as soon as you get into financial difficulties. This explains how we can help and what steps you also need to take.
 
We will
 
·          try and contact you as soon as possible by letter, phone or by visiting you at home,
·          if you ask us to, work with debt counselling organisations (such as: Citizens Advice),
·          give you a reasonable time to clear the arrears,
·         only start legal proceedings for possession of your home, if you continue to miss repayments and we are not able to develop a payment plan with you.
 
Ways of helping you
 
·          if you want to make your payments on a different day during the month, then please ask us,
·          we may arrange a payment plan where you make increased payments until your account is up to date,
·          if you have a repayment loan, we may extend the term of your mortgage (which may reduce your monthly repayments, but not in all cases),
·          change from a repayment mortgage to an interest-only mortgage, or interest-only with a long term investment to a repayment mortgage (which may reduce your monthly outgoings),
·          we may agree to you making reduced payments to your mortgage for a short period of time. When you are able to, we will ask you to make extra payments to pay back the increased amount you owe on your mortgage.
 
We will normally be able to let you do the above and if we can’t for any reason, we will write to you to explain why. If we can develop a plan with you, we will explain how it works and give you time to consider it. If we are not able to offer you any of the options above and selling your property is in your and our best interests, we will consider letting you stay in the property depending on your circumstances.
 
What you can do for us
 
·          tell us as soon as you get into financial difficulties or think that you might experience problems shortly,
·          contact a debt counselling organisation who can give you help and advice,
·          contact us quickly, if we try to contact you,
·          if any other people are paying your mortgage or anybody is guaranteeing the mortgage, keep them up to date with what is happening,
·          if we agree a payment plan, keep this up to date and if there is are changes in your circumstances which make affect the arrangement, let us know immediately. We will reconsider the situation with you and seek another solution which is acceptable to both you and us,
·          check with the Department of Works and Pensions – you may be able to claim benefits such as Income Support, which may help with your mortgage interest payments,
·          if you have mortgage payment protection insurance, check with the company to find out if you are eligible to make a claim for help with your payments,
·          tell us if you move to a new address.
 
We strongly advise that you seek independent debt advice before you change your mortgage arrangements.
 
 
If we cannot agree on a solution
 
·          we will send you a letter telling you that we may take legal action to collect the arrears or take possession of your home and this will give you fifteen working days to contact us,
·          if no response is received, we will ask our solicitors to send you a letter giving you a further 7 days to get in touch to discuss future payments to your account,
·          if you do not get in touch or we can’t agree on what payments you need to make, an application for a court hearing will be made,
·          when you are informed of a hearing date, we strongly recommend that you attend the court in person and that you seek independent debt advice,
·          starting court action does not necessarily mean that we will take possession of your home. We will continue to try and resolve the problem with you. Taking possession of your property is as a last resort,
·          Before we take possession of your home, we will give you advice about getting in touch with your local authority to see if they can find you somewhere else to live.
 
If we take possession of your home
 
·          we will give you reasonable time to remove your belongings,
·          we will put it up for sale as soon as possible,
·          we have a duty to get the best price for your property that we can,
·          when we receive the money from selling your property, we will use it to settle any outstanding debts such as legal costs, outstanding mortgage, including any costs, interest and possession administration fee. If we are aware of anyone else who has lent you money and has a mortgage on your property, they will receive any money that may be left over after our loan has been repaid. If having done this, there is anything left; it will be paid to you.
 
If selling your home does not raise enough money to pay off the mortgage
 
·          if there is not enough money from the sale to pay the whole mortgage, you will still owe us the amount that is left (a shortfall debt). We will tell you what this is as soon as possible,
·          if you bought your home with other borrowers, each of you is responsible for all the money borrowed. This is true even if you normally only pay part of the mortgage,
·          we will contact you within six years of selling your property (five years in Scotland) to arrange for you to pay back what you still owe,
·          we will take into account your income and outgoings when we arrange a payment plan for this shortfall debt with you. But if we cannot arrange a suitable plan, we may go to court to get our money back. You might have to pay additional court costs,
·          If a shortfall debt is not paid, it could affect whether you are able to get credit in the future.
 
Charges we make to accounts in arrears
 
When you first fall into arrears we will let you know about our charging policy and the standard fees we charge. A list of all our administration fees can be found on this website. If there are any fees to be paid to solicitors or other firms which provide a service, we will write and tell you the amount before we add them to your account.
 
Complaints
 
If you do not think we have treated you fairly, you can complain to our Director and Chief Executive.
 
If your complaint is not dealt with to your satisfaction, you may take it to the Financial Ombudsman. The Financial Ombudsman Service provides a free and independent service for consumers, and can be contacted at:
 
The Financial Ombudsman Services
South Quay Plaza
183 Marsh Wall
London
E14 9SR
 
Phone Number: 0845 080 1800
 
Other Issues
 
Some companies may offer you new loans or even invite you to sell your property to them and then lease it back as a way of resolving your short term financial difficulty. Please be careful as such actions may not be in your long term best interests. We would advise you to seek independent advice before entering into any arrangements of this type.
 
You may be thinking about handing your keys over to us. If you do this, you will still owe us any outstanding debt, and we would advise you to discuss this option with us before taking such action.