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Mortgage suspensions at record high

September 10, 2015 | Financial Saviour

It’s no surprise that many people struggle with their mortgage payments, but, according to a study published at the end of this summer, a record proportion of these people are now being allowed to cut or suspend these payments.

Accountancy firm Moore Stephens studied data from the Bank of England as part of their investigation into the number of people with mortgage repayments who had been granted payment holidays, essentially extra time to pay the required amount.

Also investigated were situations of reduced fees where mortgage repayments had been significantly knocked down following a thumbs up from the bank.

Overall, the study revealed that banks and mortgage lenders are becoming so increasingly tolerant with those struggling with mortgage repayments, that 44% of mortgages in payment arrears have now been granted formal forbearance arrangements – the highest level since the Bank of England began tracking forbearance levels at the start of 2007.

The recession and its subsequent knock-on effects for homeowners had previously seen forbearance arrangements peak at 43% in the first quarter of 2012, but this time it is the increasing pressure on mortgage lenders from the Financial Conduct Authority (FCA) that is cited as the reason for this latest peak.

This pressure involves the banks and mortgage lenders to change their attitude when dealing with those in financial difficulty and struggling to make mortgage repayments, and to take into account borrower’s unique personal and financial circumstances when assessing how best to deal with the situation.

Other findings from the study revealed that the total number of home loans in mortgage arrears is at its lowest level since before the recession, down almost 7,000 cases at the end of 2015’s first quarter to 28,749.

If you feel as though you’re not getting the support you need with your mortgage repayments, get in touch with Financial Saviour today. Our team of experts are qualified to provide the best help and advice that concerns all financial matters.

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