Strategies being implemented by lenders include analysing existing arrears management policies, implementing any changes identified as a result of guidance that the CML is drawing up and providing information for borrowers on managing their arrears.
The CML says lenders support the principle of a pre-action protocol for use before court proceedings and informing borrowers when they are coming out of initial deals on to higher rates with increased monthly repayments. It says borrowers can help themselves by contacting their lender as soon as they realise they may face financial difficulties.
Director general Michael Coogan says: “We continue to expect the absolute level of mortgage arrears and poss-essions to remain low, as we forecast in October. With a worsening economic environment and an incomplete safety net for borrowers, we cannot be complacent about prospects and challenges facing borrowers, lenders and policymakers.”
LibDem Shadow Chancellor Vincent Cable says: “This CML statement is welcome but we must wait to see if these declarations of intent are implemented. What will the penalty be for CML members who ignore the guidelines? There are many subprime lenders and other creditors which do not have the scruples of the main mortgage lenders.
“Unless these guidelines are enshrined in law, it is difficult to see what impact they will have on the spiralling number of repossessions.”