Pressure on secured loans holders 'benefits no-one - Loans - News - Moneyfacts

News News brings you the latest financial & economic news & reviews of the best products in the UK by our team of money experts.

Pressure on secured loans holders 'benefits no-one

Pressure on secured loans holders 'benefits no-one

Category: Loans

Updated: 14/11/2008
First Published: 14/11/2008

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Repossessing a home in the current economic climate is in nobody's interest, it has been suggested.

According to the Homeowners Advice Centre, mortgage providers should not be seeking to take back properties from secured loans holders because this will not benefit them.

Advisor at the body Al Elliot explained that the lender may have difficulty recovering the home's value.

Lenders still 'own' the asset - the house - which everyone knows, in the long term, will recover its value so the last thing lenders want to do is to try to sell in today's market," he said.

Mr Elliot suggested that lenders instead offer to reduce payments in return for receiving a larger equity stake.

These payments can then be increased when the borrower is able, or alternatively the house can be sold when the market has recovered.

Recently the Council of Mortgage Lenders predicted that 45,000 homes would be repossessed in the UK by the end of 2008.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Blue Monday hits nation’s finances

Today has been dubbed Blue Monday – the most depressing day of the year – and considering how many people could be battling with their finances this month, it’s little wonder.

Calls to make the loans market clearer

At first glance the personal loans market may seem simple enough, but get into the nitty gritty and it can be anything but. As a result, some are calling for action to make the market clearer and fairer for all.

Get the cheapest ever personal loan!

Have you woken up with a financial hangover after the festivities? Perhaps you’ve got big plans for the year ahead, or maybe you need a new car? Well, whatever your reasons for needing a loan, you can now snap one up for the cheapest ever rate!