Gordon Brown promised that repossessions would be a last resort yesterday as new guidelines for settling mortgage arrears ahead of court action were issued by lenders and the judiciary.
The guidelines will make no changes to the rights of most mortgage lenders or borrowers but they will provide guidance on a wide range of mortgage products and suggest repayment options.
In a step welcomed by opposition parties, the government also proposed that companies engaged in 'sale and rent back' schemes, 'which target vulnerable homeowners', should be brought under Financial Services Authority regulation.
The legal protocol, which comes into force on November 19, is designed to encourage sharing of information and early settlement of disputes. Lenders taking a defaulting borrower to court will now be 'expected' by judges to be able to show they have sought alternatives to repossession and acted fairly.
Financial Times
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